Company Reports

On April 13, Conagra announced that John Brase will replace Sean Connolly as president and CEO effective June 1. There was no previous mention of a process to replace Connolly even as recently as the company's first-quarter earnings release on April 1.

Conagra's fiscal third-quarter organic net sales grew 2.4% year over year, with gains in both price/mix and volume. However, cost inflation and negative operating leverage drove adjusted operating margin to contract 213 basis points to 10.6%.

We will discontinue analyst coverage of Conagra Brands on or about April 20.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands. However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view. In fiscal 2026, Conagra has shifted its focus to volume growth at the cost of lower profit margins. However, we think its lack of brands will lead to a few years before it can return to 13.5% adjusted operating margins (as defined by the company).

Conagra's fiscal second-quarter organic net sales declined 3% year over year, driven entirely by lower volumes. Negative operating leverage and cost inflation weighed on profitability as the adjusted operating margin contracted 4 percentage points to 11.3%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands. However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view. In fiscal 2026, Conagra has shifted its focus to volume growth at the cost of lower profit margins. However, we think its lack of brands will lead to a few years before it can return to 14% adjusted operating margins (as defined by the company).

Conagra's fiscal first-quarter organic net sales declined 0.6% year over year, with a 1.2% decrease in volume partially offset by higher price/mix. Negative operating leverage and cost inflation weighed on profitability as the adjusted operating margin contracted 244 basis points to 11.8%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands. However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view. In fiscal 2026, Conagra has shifted its focus to volume growth at the cost of lower profit margins. However, we think its lack of brands will lead to a few years before it can restore margins.

Conagra's fiscal fourth-quarter results continued to suffer from the challenging consumer environment. Organic net sales declined 3.5% over the prior year from both lower price/mix and lower volume. Adjusted operating margin contracted 100 basis points to 13.8%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.

Conagra's fiscal third quarter reflected the ongoing difficult consumer environment and the previously announced service interruptions in frozen meals. Organic net sales declined 5% year over year, while adjusted operating margin contracted 369 basis points to 12.7%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.

Citing supply constraints, Conagra Brands announced service interruptions in frozen meals containing chicken and frozen vegetables. It revised its fiscal 2025 guidance for organic net sales growth to down 2%, from down 1.5% to flat, as well as adjusted operating margin down 40 basis points to 14.4%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of enough leading brands or entrenched retailer relationships to drive pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.

Conagra's price investments paid off in its fiscal second quarter of 2025—a 0.4% increase in volume drove 0.3% organic net sales growth. But input cost inflation is no longer expected to ease in the second half, with adjusted operating margin of 15.3% down 57 basis points over the year-ago quarter.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of leading brands and entrenched retailer relationships to warrant pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.

The consumer environment continues to be challenging as Conagra reported fiscal first-quarter organic net sales decreased 3.5% year over year, including a 90-basis-point headwind from manufacturing disruptions at Hebrew National. Adjusted operating margin also suffered, declining to 14.2%.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on growing through building brands (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of leading brands and entrenched retailer relationships to warrant pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, and we're skeptical better efficiency closes the gap. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.

Although we saw signs that macroeconomic headwinds on no-moat Conagra might be easing last quarter, that proved to be a mirage. The firm reported organic fiscal-fourth-quarter net sales down 2.4%, mostly from lower volume, although price/mix was also down. Consequently, full-year organic net sales declined 2.1%, worse than prior guidance of down 1%-2% and our estimate before the earnings call of down 1.5%. For fiscal 2025, management has guided to organic growth of down 1.5%-flat, whereas our estimate before the earnings call called for a low-single-digit percentage recovery. We expect to cut our $33 fair value estimate by a dollar or two as we incorporate a more gradual recovery to the top line than we previously forecast.

Conagra’s business has evolved over the years, from a conglomerate, reinforced by its 2012 acquisition of Ralcorp that bolstered its private-label exposure (later divested at half the purchase price), to its present focus on brands and driving growth through increased value (rather than just boosting volume). However, food is competitive, and we don’t think it has a portfolio of leading brands and entrenched retailer relationships to warrant pricing power, a handicap relative to branded peers. In addition, it spends notably less in product development and marketing, claiming more efficient spending closes the gap. But we remain skeptical and don’t believe it will capitalize on consumer trends more effectively than competitors. A subscale portfolio lacking strong brands combined with continued underspending is likely to leave it an industry laggard, in our view.