Conagra Brands expects weak annual profit on rising costs (updated)

Conagra Brands

01/04/2026 12:42

Annual net sales expected at midpoint of prior forecast range, company says

Conagra anticipates 7% cost inflation in fiscal 2026, including tariffs

Quarterly revenue narrowly beats estimates

Updates headline, paragraph 1, 6 and adds CFO comment and details in paragraph 7 on Ardent Mills

By Neil J Kanatt, Sanskriti  Shekhar and Alexander Marrow

April 1 (Reuters) - Conagra Brands CAG.N on Wednesday lowered its annual profit forecast to the bottom of its projected range, noting that geopolitical turmoil had increased volatility in certain commodity markets.

The company now expects annual adjusted profit to be at the low end of its previously forecast range of $1.70 to $1.85 per share. Its shares were down 1.1% in afternoon trading.

Rising costs linked to the Iran war have piled pressure on food companies that were already grappling with higher input expenses and shifting dietary preferences of customers using weight-loss drugs.

Conagra increased prices last year to offset higher ingredient costs and tariffs on tin-plate steel used in packaging. Its prices rose 1.9% in the third quarter.

"For the last year, you've seen more companies try to hold the line on pricing and just eat some of that inflation because they're trying to be sensitive to consumers who are challenged and looking for good value," CEO Sean Connolly told Reuters.

"It's fairly volatile out there right now. The country is at war," Connolly said, adding that oil price swings were also impacting packaging, though with inconclusive consequences so far.

CFO Dave Marberger said lower wheat prices continued to pressure Ardent Mills - a flour-milling joint venture with Conagra, Cargill and CHS as stakeholders. Ardent Mills' performance led Conagra to lower its guidance, the company said.

The company continues to expect elevated costs in fiscal 2026, with cost-of-goods inflation of about 7%, including 3% from tariffs on tin-plate steel and 4% from ingredients, particularly animal proteins. Beef is leading a rise in prices of meat including chicken and pork.

Conagra sees annual net sales at the midpoint of its prior forecast of a 1% decline to a 1% rise.

Peer General Mills GIS.N recently reaffirmed its annual targets, while Campbell CPB.O cut its annual forecasts.

Conagra's quarterly revenue declined 1.9% to $2.79 billion, narrowly beating analysts' estimates of $2.76 billion, according to data compiled by LSEG.

Organic sales rose 2.4% after several muted quarters, which analysts attributed to a recovery from last year’s supply-chain disruption and retailer inventory adjustments.

"Given the challenging industry backdrop, the return to organic growth is a notable win," CFRA analyst Arun Sundaram said, adding that sustaining momentum may require reinvestment that could hit margins.

Conagra Brands' quarterly organic sales growth swings to positive https://www.reuters.com/graphics/CONAGRA%20BRANDS-RESULTS/CONAGRA%20BRANDS-RESULTS/jnpwrjyxavw/chart.png

 (Reporting by Sanskriti Shekhar and Neil J Kanatt in Bengaluru and Alexander Marrow in London; Editing by Devika Syamnath and Shreya Biswas)

 ((Sanskriti.Shekhar@thomsonreuters.com))