Conagra Brands, Inc. reported fiscal 2026 second‑quarter results on December 19 2025, showing net sales of $2.98 billion—a 6.8% decline from the $3.195 billion recorded in Q2 FY25. Adjusted earnings per share came in at $0.45, beating the consensus estimate of $0.44 by $0.01 and a 35.7% year‑over‑year drop from the $0.70 EPS reported in the same quarter a year earlier.
The company’s adjusted gross margin fell to 23.4%, a decline of 292 basis points from the 23.7% margin reported in Q2 FY25. Adjusted operating margin contracted to 11.3%, down 244 basis points from 11.7% a year earlier. The compression reflects a combination of protein‑price inflation, tariff‑related cost increases, and deliberate investments in supply‑chain modernization, including the baked‑chicken project slated for completion in Q2 FY26.
Segment‑level data show the Refrigerated & Frozen division’s net sales dropped 6.5% to $1.12 billion, while Grocery & Snacks fell 8.5% to $1.04 billion. International sales also slipped, contributing to the overall decline. Despite these headwinds, volume gains in ready‑to‑eat popcorn, pudding, and frozen breakfast categories helped offset some of the revenue erosion, underscoring the company’s focus on high‑margin, high‑volume product lines.
CEO Sean Connolly emphasized that the company remains confident in its long‑term strategy. “We are well positioned to return to organic net sales growth in the second half, supported by a robust innovation pipeline, increased merchandising and A&P investment, and a resilient supply chain,” he said. Connolly also highlighted the progress on debt reduction, noting a $0.7 billion net‑debt decline in the first half of fiscal 2026.
Conagra reaffirmed its fiscal 2026 guidance, maintaining an adjusted operating margin target of 11% to 11.5% and an adjusted EPS outlook of $1.70 to $1.85 per share. The unchanged guidance signals management’s confidence that, despite short‑term margin pressure, the company’s volume‑growth strategy and cost‑control initiatives will support the projected profitability range.
Investors reacted cautiously to the results, focusing on the revenue miss and margin compression. The EPS beat was modest, and the company’s continued investment in supply‑chain upgrades and product innovation suggests a deliberate short‑term trade‑off for long‑term recovery.
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