Financial Data and Key Metrics Changes - The fiscal first quarter results exceeded expectations, with a net debt reduction of over $400 million compared to the previous year [30] - The company is on track to pay down $700 million in debt for fiscal 2026, supported by divestitures and cash flow from operations [27][30] - Overall inflation guidance remains slightly above 7%, with core inflation pressures primarily from animal proteins [20][96] Business Line Data and Key Metrics Changes - Frozen business is expected to regain momentum after service interruptions, with innovations like Dolly Parton frozen meals performing well [41][42] - The company experienced a shift in promotional events, impacting sales timing, but anticipates a return to growth in frozen and snacks categories [7][14] - The company reported a 3% growth in frozen business in Q2 of the previous year, indicating potential for recovery [39] Market Data and Key Metrics Changes - The company noted a low single-digit decline in consumption trends for the second quarter, attributed to timing shifts in promotional events [5][6] - Retailers are returning to pre-COVID promotional levels, which is expected to support volume growth [81] Company Strategy and Development Direction - The company is focusing on driving volume in frozen and snacks while maximizing cash through inflation-justified pricing [8][68] - There is an emphasis on innovation and marketing to attract value-seeking consumers, particularly in lower-income demographics [76][78] - The company plans to leverage technology, including AI, to enhance core processes and lower costs [57] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the second half of the fiscal year, expecting positive sales growth driven by volume momentum and effective pricing strategies [7][15][68] - The company acknowledges ongoing inflation and value-seeking behavior among consumers but believes it can navigate these challenges effectively [76][70] Other Important Information - The company has achieved service levels of 98%, which is crucial for restoring consumer confidence and merchandising activities [14][67] - The company is about 85% covered for Q2 in terms of commodity pricing, with a focus on managing exposure to animal proteins [23] Q&A Session Summary Question: What is driving the expected inflection in sales growth for the second half? - Management attributes the expected growth to volume momentum in frozen products and successful pricing strategies [7][8] Question: How much did trade expense timing benefit organic sales growth in Q1? - The benefit from trade expense timing was approximately 50 basis points in Q1, which will flip to Q2 [12] Question: What is the outlook for frozen entrees given recent share loss? - Management remains positive about the frozen business outlook, citing strong innovation and recovery from supply interruptions [39][42] Question: How is the company addressing inflation and pricing elasticity? - The company tracks elasticities weekly and has built in historical expectations, indicating confidence in managing pricing without significant volume loss [71][100] Question: What are the expectations for promotional levels and volume share performance? - Promotional levels are returning to pre-COVID norms, and the company is cautiously optimistic about improving volume share performance [81][84]

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Market Overview - U.S. stocks traded lower with the Dow Jones falling approximately 0.1% as the federal government entered a shutdown due to Congress's failure to agree on a spending plan [1] - The Dow traded down 0.08% to 46,360.72, NASDAQ fell 0.36% to 22,577.49, and S&P 500 dropped 0.29% to 6,669.38 [1] Sector Performance - Health care shares increased by 0.9% on Wednesday, while communication services stocks decreased by 1.2% [2] Company Earnings - Conagra Brands Inc reported better-than-expected earnings for Q1, posting earnings of 39 cents per share, surpassing the analyst consensus estimate of 33 cents per share [3] - The company also reported quarterly sales of $2.633 billion, exceeding the analyst consensus estimate of $2.615 billion [3] - Conagra Brands affirmed FY2026 adjusted earnings guidance of $1.70 to $1.85 per share [3] Stock Movements - Chijet Motor Company, Inc. shares surged 173% to $0.4432 after entering an MOU for a private placement offering of up to $1 billion [8] - Ryvyl Inc. shares increased 60% to $0.4708 following a $75 million merger agreement with RTB Digital [8] - Healthcare Triangle, Inc. shares rose 25% to $3.27 after its QuantumNexis EMR platform surpassed $20 million in processed revenue [8] - Cheer Holding, Inc. shares dropped 72% to $0.1876 after announcing an $8.5 million offering [8] - Reitar Logtech Holdings Limited shares fell 35% to $4.60, and Clean Energy Technologies, Inc. shares decreased 29% to $0.2033 after a reverse stock split announcement [8] Economic Indicators - U.S. private businesses cut 32,000 jobs in September, contrasting with market estimates of a 50,000 gain [10] - The volume of mortgage applications in the U.S. declined by 12.7% in the week ending Sept. 26 [10]

Core Insights - Conagra Brands (CAG) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, but down from $0.53 per share a year ago, indicating an earnings surprise of +18.18% [1] - The company generated revenues of $2.63 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.89%, but down from $2.79 billion year-over-year [2] - Conagra Brands has underperformed the market, with shares down approximately 34% year-to-date compared to the S&P 500's gain of 13.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.46 on revenues of $3.01 billion, and for the current fiscal year, it is $1.73 on revenues of $11.25 billion [7] - The estimate revisions trend for Conagra Brands was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Food - Miscellaneous industry, to which Conagra Brands belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Conagra's stock performance [5]

Q1 FY26 Financial Performance - Organic net sales decreased by 0.6% to $2,611 million[58] - Adjusted gross margin decreased by 153 bps to 24.4%[58] - Adjusted operating margin decreased by 244 bps to 11.8%[58] - Adjusted EPS decreased by 26.4% to $0.39[58] Segment Performance - Grocery & Snacks net sales decreased by 1.0% to $1,080 million[61] - Refrigerated & Frozen net sales increased by 0.2% to $1,076 million[61] - International net sales decreased by 3.5% to $212 million[61] - Foodservice net sales increased by 0.2% to $265 million[61] Debt and Cash Flow - Net debt decreased from $8 billion to $7.6 billion[42] - Free cash flow was $(26) million, a decrease from $136 million[70] Outlook - The company reaffirms FY26 guidance for organic net sales growth of -1% to +1%[51] - The company reaffirms FY26 guidance for adjusted operating margin of approximately 11.0% to 11.5%[51] - The company reaffirms FY26 guidance for adjusted EPS of $1.70 to $1.85[51] Other Key Points - Total inflation is now expected in the low 7% range[48] - Capital expenditures are estimated at approximately $450 million for FY26[49]

Core Insights - The company, known for brands like Reddi-Wip and Slim Jim, reported quarterly earnings that exceeded analysts' expectations [1] Financial Performance - The quarterly earnings showcased a strong performance, indicating robust demand for the company's products [1] - Analysts had anticipated lower earnings, making the actual results a positive surprise [1]

Financial Data and Key Metrics Changes - Conagra's organic net sales for Q1 2026 were $2.6 billion, reflecting a 0.6% decline compared to the prior year [18] - Adjusted gross margin was 24.4% and adjusted operating margin was 11.8%, both down from the previous year but slightly better than initial expectations [18] - Adjusted earnings per share (EPS) were $0.39, down $0.14 from the year-ago period [18] Business Line Data and Key Metrics Changes - Grocery and Snacks segment net sales were $1.1 billion, representing a 1% decline in organic net sales [19] - Refrigerated and Frozen segment also delivered $1.1 billion in net sales, with organic net sales up 0.2% [20] - International segment organic net sales declined 3.5%, while Foodservice segment returned to growth with a 0.2% increase [20] Market Data and Key Metrics Changes - 44% of Conagra's portfolio held or gained volume share in Q1, an improvement from Q4 fiscal 2025 [7] - Frozen portfolio volumes improved by 3.2 points compared to Q4 fiscal 2025, with significant share gains in frozen vegetables, meals, and prepared chicken [8] - Snacks business saw strong volume in protein snacks, but faced declines in specific products due to promotional timing shifts [10] Company Strategy and Development Direction - The company is focused on growing its frozen and snacks segments while investing in supply chain resiliency [16] - Conagra is maintaining a disciplined approach to capital allocation, with $450 million planned for capital expenditures [15] - The company successfully completed divestitures of Chef Boyardee and frozen seafood businesses, using proceeds to reduce net debt by over $400 million [13] Management's Comments on Operating Environment and Future Outlook - Management expects inflationary pressures and weak consumer sentiment to persist, reaffirming full-year guidance for fiscal 2026 [5] - Core inflation expectations have increased to the low 7% range, primarily due to rising costs in animal proteins [14] - The company anticipates organic net sales growth for the second half of the year as supply constraints ease [28] Other Important Information - Conagra reduced net debt by nearly $1.1 billion compared to the year-ago period, ending the quarter with net leverage at 3.55 times [25] - The company is on track to complete its supply chain modernization efforts, including the Baked Chicken project [12] - Adjusted SG&A expenses were unfavorable to the prior year due to higher incentive compensation and advertising spend [22] Q&A Session Summary Question: What are the expectations for organic net sales growth? - The company continues to expect organic net sales growth in the range of negative 1% to positive 1% for fiscal 2026 [26] Question: How is the company managing inflation and tariff costs? - The company has been able to mitigate a large portion of tariff costs in Q1 but expects higher net tariff costs in Q2 due to inventory utilization [28] Question: What is the outlook for the second quarter? - The company expects organic net sales to decline in low single digits in Q2, driven by recent consumption trends and trade expense shifts [28]

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Core Viewpoint - Conagra Brands exceeded Wall Street expectations for first-quarter sales, driven by strong demand for its pantry staples like Slim Jim meat snacks and Act II popcorn, despite inflationary pressures [1] Group 1: Financial Performance - Conagra Brands reported first-quarter sales that surpassed analyst estimates, indicating robust consumer demand [1] - The company's performance was bolstered by its popular product lines, particularly in the snack and pantry categories [1] Group 2: Market Conditions - The results reflect resilience in consumer spending on essential food items, even amid ongoing inflation [1] - The demand for pantry staples suggests a shift in consumer behavior towards more affordable and convenient food options during economic uncertainty [1]

[Highlights of First Quarter Fiscal Year 2026](index=1&type=section&id=Highlights%20of%20First%20Quarter%20Fiscal%20Year%202026) The first quarter of fiscal year 2026 saw solid progress with top-line improvement, strategic execution, and net debt reduction, despite a decrease in net sales and EPS [CEO Perspective](index=1&type=section&id=CEO%20Perspective) CEO Sean Connolly expressed satisfaction with solid Q1 FY26 progress, noting top-line improvement, strategic execution, restored supply chain service levels, and net debt reduction, while reaffirming fiscal 2026 guidance despite inflationary pressures - Solid progress in Q1 FY26 with top-line improvement and continued strategic execution across the portfolio[4](index=4&type=chunk) - Successfully delivered on key supply chain objectives and fully restored service levels[4](index=4&type=chunk) - Advanced portfolio reshaping, enabling further reduction in net debt[4](index=4&type=chunk) - Reaffirmed fiscal 2026 guidance despite a dynamic operating environment with inflationary pressure and cautious consumer sentiment[4](index=4&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Conagra Brands reported a 5.8% decrease in net sales and a 0.6% decrease in organic net sales for Q1 FY26, with significant declines in diluted and adjusted EPS, yet reaffirmed its fiscal 2026 guidance Q1 FY26 Key Financial Highlights | Metric | Q1 FY26 Value | YoY Change | | :-------------------------- | :------------ | :--------- | | Net Sales | $2.6 billion | -5.8% | | Organic Net Sales | N/A | -0.6% | | Gross Profit | $641 million | -13.4% | | Adjusted Gross Profit | $644 million | -11.3% | | Reported Operating Margin | 13.2% | -118 bps | | Adjusted Operating Margin | 11.8% | -244 bps | | Reported Diluted EPS | $0.34 | -64.9% | | Adjusted EPS | $0.39 | -26.4% | - The company gained volume share in categories including frozen desserts, refrigerated whipped topping, hot dogs, pudding, canned tomatoes, and frozen multi-serve meals[5](index=5&type=chunk) Fiscal 2026 Guidance Reaffirmed | Metric | Guidance Range | | :---------------------- | :------------- | | Organic Net Sales Growth | (1)% to 1% | | Adjusted Operating Margin | ~11.0% to ~11.5% | | Adjusted EPS | $1.70 to $1.85 | [Total Company First Quarter Results](index=1&type=section&id=Total%20Company%20First%20Quarter%20Results) The company's Q1 FY26 results show a decline in net sales and profitability metrics, with adjusted EBITDA also decreasing, while expenses saw mixed changes [Net Sales Performance](index=1&type=section&id=Net%20Sales%20Performance) Total net sales for Q1 FY26 decreased by 5.8% to $2.6 billion, with organic net sales down 0.6% due to volume decline, partially offset by positive price/mix Q1 FY26 Net Sales Breakdown | Metric | Value | Impact on Net Sales | | :-------------------------------- | :------------ | :------------------ | | Total Net Sales | $2.6 billion | -5.8% YoY | | Organic Net Sales | N/A | -0.6% YoY | | Price/Mix (Organic) | N/A | +0.6% | | Volume (Organic) | N/A | -1.2% | | Unfavorable M&A Impact | N/A | -5.1% | | Unfavorable Foreign Exchange Impact | N/A | -0.1% | - The **0.6% decrease in organic net sales** was driven by a **0.6% positive impact from price/mix**, inclusive of favorable trade expense timing and product mix, and a **1.2% decrease in volume**[5](index=5&type=chunk) [Profitability Metrics](index=1&type=section&id=Profitability%20Metrics) Gross profit and operating margins declined in Q1 FY26 due to lower sales and inflation, leading to a significant decrease in reported and adjusted net income and EPS Q1 FY26 Profitability Overview | Metric | Q1 FY26 Value | YoY Change | | :-------------------------- | :------------ | :--------- | | Gross Profit | $640.6 million | -13.4% | | Adjusted Gross Profit | $643.5 million | -11.3% | | Gross Margin | 24.3% | -212 bps | | Adjusted Gross Margin | 24.4% | -153 bps | | Reported Operating Margin | 13.2% | -118 bps | | Adjusted Operating Margin | 11.8% | -244 bps | | Net Income Attributable to Conagra Brands | $164.5 million | -64.8% | | Adjusted Net Income Attributable to Conagra Brands | $189.2 million | -25.1% | | Reported Diluted EPS | $0.34 | -64.9% | | Adjusted Diluted EPS | $0.39 | -26.4% | - Productivity gains were more than offset by lower net sales, negative impact of cost of goods sold inflation, and lost profit from divested businesses[6](index=6&type=chunk)[8](index=8&type=chunk) - Reported EPS for Q1 FY26 included a net expense of approximately **$0.04 per diluted share** related to the loss on sale of businesses and **$0.01 per diluted share** for restructuring plans[33](index=33&type=chunk)[38](index=38&type=chunk) - Reported EPS for Q1 FY25 included a net benefit of approximately **$0.44 per diluted share** related to a valuation allowance adjustment and **$0.03 per diluted share** from fire-related insurance recoveries[34](index=34&type=chunk)[38](index=38&type=chunk) [Expenses](index=2&type=section&id=Expenses) SG&A and A&P expenses increased in Q1 FY26, primarily due to higher incentive compensation, while net interest expense decreased due to reduced net debt Q1 FY26 Expense Overview | Metric | Q1 FY26 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | SG&A | $335.6 million | +0.1% | | Adjusted SG&A | $332.8 million | +1.5% | | A&P Expense | $52.9 million | +5.0% | | Net Interest Expense | $93.8 million | -11.4% | - Higher incentive compensation was the primary driver for the increase in adjusted SG&A[9](index=9&type=chunk) - The decrease in net interest expense was driven by a reduction in net debt[10](index=10&type=chunk) [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q1 FY26 decreased by 16.4% to $441 million, primarily driven by the decline in adjusted gross profit Q1 FY26 Adjusted EBITDA | Metric | Q1 FY26 Value | YoY Change | | :------------- | :------------ | :--------- | | Adjusted EBITDA | $441 million | -16.4% | - The decrease in adjusted EBITDA was primarily driven by the decrease in adjusted gross profit[12](index=12&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Most segments experienced net sales declines in Q1 FY26, with varying impacts on organic net sales and adjusted operating profit due to inflation and divestitures [Grocery & Snacks Segment](index=2&type=section&id=Grocery%20%26%20Snacks%20Segment) The Grocery & Snacks segment saw an 8.7% net sales decrease and a 12.9% adjusted operating profit decline in Q1 FY26, impacted by lower organic sales, inflation, and divestitures Grocery & Snacks Segment Q1 FY26 Performance | Metric | Q1 FY26 Value | YoY Change | | :---------------------- | :------------ | :--------- | | Net Sales | $1.1 billion | -8.7% | | Organic Net Sales | N/A | -0.6% | | Price/Mix (Organic) | N/A | +0.6% | | Volume (Organic) | N/A | -1.6% | | Adjusted Operating Profit | $220.8 million | -12.9% | - Adjusted operating profit was negatively impacted by lower organic net sales, cost of goods sold inflation, higher SG&A (inclusive of A&P), and lost profit from divested businesses[14](index=14&type=chunk) [Refrigerated & Frozen Segment](index=2&type=section&id=Refrigerated%20%26%20Frozen%20Segment) The Refrigerated & Frozen segment's net sales decreased by 0.9% in Q1 FY26, despite a 0.2% organic net sales increase, with adjusted operating profit down 28.1% due to inflation and operating leverage Refrigerated & Frozen Segment Q1 FY26 Performance | Metric | Q1 FY26 Value | YoY Change | | :---------------------- | :------------ | :--------- | | Net Sales | $1.1 billion | -0.9% | | Organic Net Sales | N/A | +0.2% | | Price/Mix (Organic) | N/A | -0.3% | | Volume (Organic) | N/A | +0.5% | | Adjusted Operating Profit | $114.4 million | -28.1% | - Volume was favorably impacted from lapping last year's supply constraints on Hebrew National[15](index=15&type=chunk) - Adjusted operating profit was negatively impacted by cost of goods sold inflation, unfavorable operating leverage, and lost profit from divested businesses, despite higher organic net sales and productivity[16](index=16&type=chunk) [International Segment](index=2&type=section&id=International%20Segment) The International segment's net sales significantly decreased by 18.0% in Q1 FY26 due to M&A impacts and organic decline, though adjusted operating profit increased by 5.3% International Segment Q1 FY26 Performance | Metric | Q1 FY26 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Net Sales | $212.3 million | -18.0% | | Organic Net Sales | N/A | -3.5% | | Price/Mix (Organic) | N/A | +1.7% | | Volume (Organic) | N/A | -5.2% | | Unfavorable M&A Impact | N/A | -13.2% | | Unfavorable Foreign Exchange Impact | N/A | -1.3% | | Adjusted Operating Profit | $37.7 million | +5.3% | - Productivity and favorable foreign exchange rates helped offset negative impacts on adjusted operating profit[20](index=20&type=chunk) [Foodservice Segment](index=4&type=section&id=Foodservice%20Segment) The Foodservice segment experienced a 0.8% net sales decrease in Q1 FY26, with adjusted operating profit down 21.1%, as inflation and operating leverage offset organic net sales growth Foodservice Segment Q1 FY26 Performance | Metric | Q1 FY26 Value | YoY Change | | :---------------------- | :------------ | :--------- | | Net Sales | $264.5 million | -0.8% | | Organic Net Sales | N/A | +0.2% | | Price/Mix (Organic) | N/A | +3.8% | | Volume (Organic) | N/A | -3.6% | | Adjusted Operating Profit | $27.7 million | -21.1% | - Higher organic net sales and productivity were more than offset by cost of goods sold inflation, unfavorable operating leverage, and lost profit from divested businesses[22](index=22&type=chunk) [Other Financial Items](index=4&type=section&id=Other%20Financial%20Items) Corporate expenses increased due to incentive compensation, while tax rates saw significant changes, and other income streams remained stable in Q1 FY26 [Corporate Expenses](index=4&type=section&id=Corporate%20Expenses) Corporate expenses and adjusted corporate expenses increased slightly in Q1 FY26, primarily driven by higher incentive compensation expense Q1 FY26 Corporate Expenses | Metric | Q1 FY26 Value | YoY Change | | :-------------------- | :------------ | :--------- | | Corporate Expenses | $92 million | +0.1% | | Adjusted Corporate Expenses | $90 million | +5.2% | - The increase in corporate expenses was driven primarily by higher incentive compensation expense[23](index=23&type=chunk) [Tax Rate and Other Income](index=4&type=section&id=Tax%20Rate%20and%20Other%20Income) The effective tax rate for Q1 FY26 significantly increased to 43.1%, impacted by divestitures, while adjusted effective tax rate rose to 25.0% due to reduced stock compensation benefits Q1 FY26 Tax Rate and Other Income | Metric | Q1 FY26 Value | Q1 FY25 Value | | :-------------------------------- | :------------ | :------------ | | Effective Tax Rate | 43.1% | (42.4)% | | Adjusted Effective Tax Rate | 25.0% | 22.1% | | Pension and Post-retirement Non-service Income | $6 million | $3 million | | Equity Method Investment Earnings | $29 million | $29.1 million | - The effective tax rate was negatively impacted by tax expense connected to the Chef Boyardee and frozen seafood divestitures[24](index=24&type=chunk) - The adjusted effective tax rate increased due to reduced benefits from stock compensation vesting[24](index=24&type=chunk) [Dividends](index=4&type=section&id=Dividends) The company paid a dividend of $0.35 per share in Q1 FY26, totaling $167 million, which remained flat compared to the prior year Q1 FY26 Dividends Paid | Metric | Q1 FY26 Value | Q1 FY25 Value | | :---------------- | :------------ | :------------ | | Dividend per Share | $0.35 | N/A | | Total Dividends Paid | $167 million | $167 million | [Cash Flow and Debt Update](index=4&type=section&id=Cash%20Flow%20and%20Debt%20Update) Net cash flow from operations decreased significantly, leading to negative free cash flow, despite a reduction in net debt and a stable leverage ratio [Cash Flow from Operations](index=4&type=section&id=Cash%20Flow%20from%20Operations) Net cash flows from operating activities decreased by 55.1% to $121 million in Q1 FY26, primarily due to lower operating profit and increased inventory levels Q1 FY26 Net Cash Flows from Operating Activities | Metric | Q1 FY26 Value | YoY Change | | :-------------------------------- | :------------ | :--------- | | Net Cash Flows from Operating Activities | $120.6 million | -55.1% | - The decrease was driven primarily by lower operating profit and increased levels of inventory reflecting inflationary cost increases in addition to rebuilding some inventory due to previous supply chain constraints[26](index=26&type=chunk) [Free Cash Flow](index=4&type=section&id=Free%20Cash%20Flow) Capital expenditures increased by 10.4% in Q1 FY26, resulting in a negative free cash flow of $(26) million, a $162 million decrease from the prior year Q1 FY26 Free Cash Flow | Metric | Q1 FY26 Value | YoY Change | | :-------------------------- | :------------ | :--------- | | Capital Expenditures | $146.8 million | +10.4% | | Free Cash Flow | $(26.2) million | N/A | [Net Debt and Leverage Ratio](index=4&type=section&id=Net%20Debt%20and%20Leverage%20Ratio) The company ended Q1 FY26 with net debt of $7.6 billion, a 12.3% reduction year-over-year, resulting in a net leverage ratio of 3.55x Q1 FY26 Net Debt and Leverage Ratio | Metric | Q1 FY26 Value | YoY Change | | :---------------- | :------------ | :--------- | | Net Debt | $7.6 billion | -12.3% | | Net Leverage Ratio | 3.55x | N/A | [Fiscal Year 2026 Outlook](index=4&type=section&id=Fiscal%20Year%202026%20Outlook) Conagra Brands reaffirmed its fiscal 2026 guidance for key financial metrics, while updating expectations for interest expense and adjusted effective tax rate, and anticipating elevated cost of goods sold inflation [Reaffirmed Guidance](index=4&type=section&id=Reaffirmed%20Guidance) Conagra Brands reaffirmed its fiscal 2026 guidance for organic net sales, adjusted operating margin, and adjusted EPS, while updating interest expense and adjusted effective tax rate expectations Fiscal 2026 Reaffirmed Guidance | Metric | Guidance Range | | :---------------------- | :------------- | | Organic Net Sales Growth | (1)% to 1% | | Adjusted Operating Margin | ~11.0% to ~11.5% | | Adjusted EPS | $1.70 to $1.85 | Updated Fiscal 2026 Guidance | Metric | Updated Expectation | | :-------------------------- | :------------------ | | Interest Expense | ~$390 million | | Adjusted Effective Tax Rate | ~24% | - All other guidance metrics, including equity earnings contribution, pension income, capital expenditures, free cash flow conversion, net leverage ratio, and the adjusted EPS benefit of the 53rd week, remain unchanged[30](index=30&type=chunk) [Cost of Goods Sold Inflation and Tariffs](index=6&type=section&id=Cost%20of%20Goods%20Sold%20Inflation%20and%20Tariffs) The company expects core cost of goods sold inflation to be slightly higher than 4% in fiscal 2026, with anticipated U.S. tariffs adding approximately 3%, resulting in a total inflation in the low 7% range - Cost of goods sold inflation is expected to continue at an elevated level in fiscal 2026, with core inflation slightly higher than **4%**[31](index=31&type=chunk) - Anticipated U.S. tariffs are expected to increase cost of goods sold by approximately **3% annually**, prior to mitigating actions[31](index=31&type=chunk) - Total cost of goods sold inflation is now expected in the **low 7% range**[31](index=31&type=chunk) [Note on Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains various non-GAAP financial measures used by Conagra Brands to provide supplemental information for year-over-year comparisons [Definitions and Explanations](index=8&type=section&id=Definitions%20and%20Explanations) This section defines and explains various non-GAAP financial measures, such as adjusted EPS and organic net sales, used by Conagra Brands to provide useful supplemental information for year-over-year comparisons - Non-GAAP financial measures provide useful supplemental information to investors to facilitate year-over-year comparisons by removing non-recurring items and other items impacting comparability[42](index=42&type=chunk)[43](index=43&type=chunk) - Organic net sales excludes impacts of foreign exchange, divested businesses, acquisitions, and any 53rd week to provide a more transparent view of year-over-year comparability[44](index=44&type=chunk) - Free cash flow is net cash from operating activities less additions to property, plant and equipment, used to assess cash available for debt repayment, dividends, acquisitions, and share repurchases[45](index=45&type=chunk) - Adjusted items exclude income or expenses that management believes have a significant impact on earnings and are not indicative of core operating results, such as restructuring plans, acquisitions/divestitures, hedging gains/losses, impairment charges, and unusual tax items[46](index=46&type=chunk)[50](index=50&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's Consolidated Statements of Earnings, Balance Sheets, and Cash Flows for the first quarter of fiscal years 2026 and 2025 [Consolidated Statements of Earnings](index=12&type=section&id=Consolidated%20Statements%20of%20Earnings) The Consolidated Statements of Earnings detail the company's financial performance for Q1 FY26 and FY25, including net sales, gross profit, operating expenses, and net income Consolidated Statements of Earnings (in millions) | | FIRST QUARTER | | | | | | | --- | --- | --- | --- | --- | --- | | | Thirteen Weeks | | Thirteen Weeks | | | | | Ended | | Ended | | | | | August 24, 2025 | | August 25, 2024 | Percent Change | | Net sales | $ 2,632.6 | $ 2,794.9 | (5.8)% | | Cost of goods sold | 1,992.0 | 2,055.6 | (3.1)% | | Gross profit | $ 640.6 | $ 739.3 | (13.4)% | | Selling, general and administrative expenses | 335.6 | 335.4 | 0.1% | | Loss (gain) on divestitures | (42.4) | 2.3 | N/A | | Operating profit | $ 347.4 | $ 401.6 | (13.5)% | | Pension and postretirement non-service income | 6.1 | 3.1 | 95.4% | | Interest expense, net | 93.8 | 105.8 | (11.4)% | | Equity method investment earnings | 29.4 | 29.1 | 1.0% | | Income before income taxes | $ 289.1 | $ 328.0 | (11.9)% | | Income tax expense (benefit) | 124.6 | (138.9) | N/A | | Net income | $ 164.5 | $ 466.9 | (64.8)% | | Less: Net income attributable to noncontrolling interests | — | 0.1 | (100.0)% | | Net income attributable to Conagra Brands, Inc. | $ 164.5 | $ 466.8 | (64.8)% | | Earnings per share - basic | | | | | Net income attributable to Conagra Brands, Inc. | $ 0.34 | $ 0.97 | (64.9)% | | Basic weighted average shares outstanding | 478.7 | 478.8 | (0.0)% | | Earnings per share - diluted | | | | | Net income attributable to Conagra Brands, Inc. | $ 0.34 | $ 0.97 | (64.9)% | | Diluted weighted average shares outstanding | 479.6 | 480.3 | (0.1)% | [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of the company's assets, liabilities, and stockholders' equity as of August 24, 2025, and May 25, 2025 Consolidated Balance Sheets (in millions) | | August 24, 2025 | May 25, 2025 | | :-------------------------------------------------- | :-------------- | :----------- | | ASSETS | | | | Current assets | | | | Cash and cash equivalents | $ 698.1 | $ 68.0 | | Receivables, less allowance for doubtful accounts of $4.2 and $3.6 | 756.5 | 770.0 | | Inventories | 2,258.2 | 2,048.3 | | Prepaid expenses and other current assets | 127.3 | 90.6 | | Current assets held for sale | — | 94.1 | | Total current assets | 3,840.1 | 3,071.0 | | Property, plant and equipment, net | 2,815.8 | 2,835.9 | | Goodwill | 10,501.6 | 10,501.9 | | Brands, trademarks and other intangibles, net | 2,410.2 | 2,421.1 | | Other assets | 1,579.5 | 1,571.0 | | Noncurrent assets held for sale | 25.6 | 533.0 | | | $ 21,172.8 | $ 20,933.9 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current liabilities | | | | Notes payable | $ 41.5 | $ 804.7 | | Current installments of long-term debt | 1,015.7 | 1,028.8 | | Accounts and other payables | 1,532.5 | 1,590.1 | | Accrued payroll | 113.5 | 146.0 | | Other accrued liabilities | 926.4 | 744.7 | | Current liabilities held for sale | — | 2.7 | | Total current liabilities | 3,629.6 | 4,317.0 | | Senior long-term debt, excluding current installments | 7,222.6 | 6,234.1 | | Deferred income taxes | 810.6 | 810.3 | | Other noncurrent liabilities | 594.2 | 639.6 | | Noncurrent liabilities held for sale | — | 0.2 | | Total stockholders' equity | 8,915.8 | 8,932.7 | | | $ 21,172.8 | $ 20,933.9 | [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows detail cash generated from operating, investing, and financing activities for Q1 FY26 and FY25, showing a significant increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in millions) | | Thirteen Weeks Ended | | | --- | --- | --- | | | August 24, 2025 | August 25, 2024 | | Cash flows from operating activities: | | | | Net income | $ 164.5 | $ 466.9 | | Adjustments to reconcile net income to net cash flows from operating activities: | | | | Depreciation and amortization | 95.3 | 99.1 | | Asset impairment charges | 1.2 | 0.1 | | Loss (gain) on divestitures | (42.4) | 2.3 | | Equity method investment earnings in excess of distributions | (0.2) | (5.2) | | Stock-settled share-based payments expense | 19.6 | 20.6 | | Contributions to pension plans | (2.7) | (2.9) | | Pension benefit | (4.0) | (0.8) | | Other items | (3.6) | 6.7 | | Change in operating assets and liabilities excluding effects of business acquisitions | | | | and dispositions: | | | | Receivables | (51.3) | (62.5) | | Inventories | (207.4) | (112.5) | | Deferred income taxes and income taxes payable, net | 99.3 | (165.9) | | Prepaid expenses and other current assets | (41.8) | (43.0) | | Accounts and other payables | 20.3 | 67.7 | | Accrued payroll | (29.9) | (83.7) | | Other accrued liabilities | 91.7 | 84.4 | | Litigation receivables, net of recoveries | 65.1 | 5.0 | | Litigation accruals, net of payments | (53.1) | (7.7) | | Net cash flows from operating activities | 120.6 | 268.6 | | Cash flows from investing activities: | | | | Additions to property, plant and equipment | (146.8) | (133.0) | | Sale of property, plant and equipment | 6.2 | 0.3 | | Purchase of businesses, net of cash acquired | — | (230.4) | | Proceeds from divestitures, net of cash divested | 643.6 | 76.8 | | Other items | (1.0) | — | | Net cash flows from investing activities | 502.0 | (286.3) | | Cash flows from financing activities: | | | | Issuance of short-term borrowings, maturities greater than 90 days | 31.9 | 35.1 | | Repayment of short-term borrowings, maturities greater than 90 days | (536.3) | (35.3) | | Net issuance (repayment) of other short-term borrowings, maturities less than or equal | | | | to 90 days | (258.8) | 336.4 | | Issuance of long-term debt | 1,000.0 | — | | Repayment of long-term debt | (18.0) | (14.9) | | Debt issuance costs | (10.6) | — | | Repurchase of Conagra Brands, Inc. common shares | (15.0) | (64.0) | | Cash dividends paid | (167.1) | (167.3) | | Exercise of stock options and issuance of other stock awards, including tax | | | | withholdings | (18.8) | (19.8) | | Other items | (0.1) | (0.1) | | Net cash flows from financing activities | 7.2 | 70.1 | | Effect of exchange rate changes on cash and cash equivalents | 0.3 | (2.7) | | Net change in cash and cash equivalents, including cash balances classified as assets | | | | held for sale | 630.1 | 49.7 | | Less: Net change in cash balances classified as assets held for sale | — | (1.3) | | Net change in cash and cash equivalents | 630.1 | 51.0 | | Cash and cash equivalents at beginning of period | 68.0 | 77.7 | | Cash and cash equivalents at end of period | $ 698.1 | $ 128.7 | [Reconciliations of Non-GAAP Financial Measures](index=17&type=section&id=Reconciliations%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of reported to adjusted financial measures, including organic net sales, operating profit, gross margin, net income, EPS, free cash flow, net debt, and EBITDA [Reconciliation of Q1 FY26 QTD Organic Net Sales by Segment - YOY Change](index=17&type=section&id=Organic%20Net%20Sales%20by%20Segment%20Reconciliation) This section reconciles reported net sales to organic net sales for each segment and total Conagra Brands, detailing impacts from foreign exchange, acquisitions, and divestitures Q1 FY26 QTD Organic Net Sales by Segment - YOY Change (in millions) | | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Total Conagra Brands | | :-------------------------------- | :--------------- | :-------------------- | :------------ | :---------- | :------------------- | | Q1 FY26 Net Sales | $ 1,079.6 | $ 1,076.2 | $ 212.3 | $ 264.5 | $ 2,632.6 | | Impact of foreign exchange | — | — | 3.0 | — | 3.0 | | Net sales from acquired businesses | (10.6) | — | — | (0.7) | (11.3) | | Net sales from divested businesses | (7.0) | (4.9) | (1.1) | (0.2) | (13.2) | | Organic Net Sales | $ 1,062.0 | $ 1,071.3 | $ 214.2 | $ 263.6 | $ 2,611.1 | | Year-over-year change - Net Sales | (8.7)% | (0.9)% | (18.0)% | (0.8)% | (5.8)% | | Impact of foreign exchange (pp) | — | — | 1.3 | — | 0.1 | | Net sales from acquired businesses (pp) | (1.0) | — | — | (0.3) | (0.4) | | Net sales from divested businesses (pp) | 8.7 | 1.1 | 13.2 | 1.3 | 5.5 | | Organic Net Sales | (1.0)% | 0.2% | (3.5)% | 0.2% | (0.6)% | | Volume (Organic) | (1.6)% | 0.5% | (5.2)% | (3.6)% | (1.2)% | | Price/Mix | 0.6% | (0.3)% | 1.7% | 3.8% | 0.6% | [Reconciliation of Q1 FY26 Adj. Operating Profit by Segment - YOY Change](index=18&type=section&id=Adjusted%20Operating%20Profit%20by%20Segment%20Reconciliation) This reconciliation details adjustments from reported to adjusted operating profit for each segment and total Conagra Brands, including impacts from restructuring, divestitures, and hedging derivatives Q1 FY26 Adj. Operating Profit by Segment - YOY Change (in millions) | | Grocery & Snacks | Refrigerated & Frozen | International | Foodservice | Corporate Expense | Total Conagra Brands | | :-------------------------------- | :--------------- | :-------------------- | :------------ | :---------- | :---------------- | :------------------- | | Operating Profit | $ 261.6 | $ 113.0 | $ 37.4 | $ 27.7 | $ (92.3) | $ 347.4 | | Restructuring plans | 2.0 | 1.0 | 0.3 | — | 1.1 | 4.4 | | Acquisitions and divestitures | — | — | — | — | 1.5 | 1.5 | | Loss (gain) on sale of businesses | (42.8) | 0.4 | — | — | — | (42.4) | | Legal matter recoveries | — | — | — | — | (2.4) | (2.4) | | Corporate hedging derivative losses (gains) | — | — | — | — | 2.2 | 2.2 | | Adjusted Operating Profit | $ 220.8 | $ 114.4 | $ 37.7 | $ 27.7 | $ (89.9) | $ 310.7 | | Operating Profit Margin | 24.2% | 10.5% | 17.6% | 10.5% | | 13.2% | | Adjusted Operating Profit Margin | 20.5% | 10.6% | 17.7% | 10.5% | | 11.8% | | Year-over-year % change - Operating Profit | 5.0% | (35.8)% | 11.2% | (21.1)% | 0.1% | (13.5)% | | Year-over year % change - Adjusted Operating Profit | (12.9)% | (28.1)% | 5.3% | (21.1)% | 5.2% | (21.9)% | | Year-over-year bps change - Operating Profit | 317 bps | (571) bps | 463 bps | (269) bps | | (118) bps | | Year-over-year bps change - Adjusted Operating Profit | (97) bps | (402) bps | 394 bps | (269) bps | | (244) bps | [Reconciliation of Q1 FY26 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, and Adj. EPS - YOY Change](index=20&type=section&id=Adjusted%20Gross%20Margin%2C%20Gross%20Profit%2C%20SG%26A%2C%20Net%20Income%2C%20and%20EPS%20Reconciliation) This reconciliation provides a comprehensive breakdown of adjustments from reported to adjusted gross profit, SG&A, operating profit, net income, and diluted EPS for Q1 FY26 and FY25 Q1 FY26 Adj. Gross Margin, Gross Profit, SG&A, Net Income, and EPS - YOY Change (in millions) | | Gross profit | Selling, general and administrative expenses 1 | Operating profit | Income before income taxes | Income tax expense | Income tax rate | Net income attributable to Conagra Brands, Inc. | Diluted EPS from income attributable to Conagra Brands, Inc common stockholders | | :-------------------------------- | :----------- | :--------------------------------------------- | :--------------- | :------------------------- | :----------------- | :-------------- | :-------------------------------------------- | :----------------------------------------------------------------------------- | | Q1 FY26 Reported | $ 640.6 | $ 335.6 | $ 347.4 | $ 289.1 | $ 124.6 | 43.1% | $ 164.5 | $ 0.34 | | % of Net Sales | 24.3% | 12.7% | 13.2% | | | | | | | Restructuring plans | 0.7 | 3.7 | 4.4 | 4.4 | 1.1 | | 3.3 | 0.01 | | Acquisitions and divestitures | — | 1.5 | 1.5 | 1.5 | 0.4 | | 1.1 | — | | Loss (gain) on sale of businesses | — | — | (42.4) | (42.4) | (62.8) | | 20.4 | 0.04 | | Legal matter recoveries | — | (2.4) | (2.4) | (2.4) | (0.6) | | (1.8) | — | | Corporate hedging derivative losses (gains) | 2.2 | — | 2.2 | 2.2 | 0.5 | | 1.7 | — | | Adjusted | $ 643.5 | $ 332.8 | $ 310.7 | $ 252.4 | $ 63.2 | 25.0% | $ 189.2 | $ 0.39 | | % of Net Sales | 24.4% | 12.6% | 11.8% | | | | | | | Year-over-year % of net sales change - reported | (212) bps | 75 bps | (118) bps | | | | | | | Year-over-year % of net sales change - adjusted | (153) bps | 91 bps | (244) bps | | | | | | | Year-over-year change - reported | (13.4)% | 0.1% | (13.5)% | (11.9)% | N/A | | (64.8)% | (64.9)% | | Year-over-year change - adjusted | (11.3)% | 1.5% | (21.9)% | (22.2)% | (11.9)% | | (25.1)% | (26.4)% | [Reconciliation of YTD Free Cash Flow, Net Debt, and Net Leverage Ratio](index=22&type=section&id=Free%20Cash%20Flow%2C%20Net%20Debt%2C%20and%20Net%20Leverage%20Ratio%20Reconciliation) This reconciliation provides the calculation of free cash flow, net debt, and the net debt to adjusted EBITDA ratio for Q1 FY26, along with comparative data for Q1 FY25 and FY25 YTD Free Cash Flow, Net Debt, and Net Leverage Ratio (in millions) | | Q1 FY26 | Q1 FY25 | % Change | | :------------------------------------------ | :-------- | :-------- | :--------- | | Net cash flows from operating activities | $ 120.6 | $ 268.6 | (55.1)% | | Additions to property, plant and equipment | (146.8) | (133.0) | 10.4% | | Free cash flow | $ (26.2) | $ 135.6 | N/A | | | August 24, 2025 | August 25, 2024 | | | Notes payable | $ 41.5 | $ 1,266.4 | | | Current installments of long-term debt | 1,015.7 | 20.2 | | | Senior long-term debt, excluding current installments | 7,222.6 | 7,485.6 | | | Total Debt | $ 8,279.8 | $ 8,772.2 | | | Less: Cash and cash equivalents | 698.1 | 128.7 | | | Net Debt | $ 7,581.7 | $ 8,643.5 | | | | Q1 FY25 | Q1 FY26 | Q1 FY26 TTM | | Net income attributable to Conagra Brands, Inc. | $ 1,152.4 | $ 466.8 | $ 164.5 | $ 850.1 | | Add Back: Income tax expense (benefit) | 3.7 | (138.9) | 124.6 | 267.2 | | Interest expense, net | 416.7 | 105.8 | 93.8 | 404.7 | | Depreciation | 336.5 | 85.7 | 84.5 | 335.3 | | Amortization | 53.7 | 13.4 | 10.8 | 51.1 | | Earnings before interest, taxes, depreciation, and amortization (EBITDA) | $ 1,963.0 | $ 532.8 | $ 478.2 | $ 1,908.4 | | Restructuring plans | 99.2 | 2.9 | 3.9 | 100.2 | | Acquisitions and divestitures | 1.1 | — | 1.5 | 2.6 | | Corporate hedging derivative losses (gains) | (8.2) | 1.3 | 2.2 | (7.3) | | Fire related insurance recoveries | (17.0) | (17.0) | — | — | | Impairment of business held for sale | 27.2 | — | — | 27.2 | | Goodwill and brand impairment charges | 72.1 | — | — | 72.1 | | Consulting fees on tax matters | 2.0 | 2.0 | — | — | | Loss (gain) on sale of businesses | 2.3 | 2.3 | (42.4) | (42.4) | | Legal matters, net of recoveries | 88.7 | 3.4 | (2.4) | 82.9 | | Pension settlement gain | (13.0) | — | — | (13.0) | | Ardent JV restructuring activities | 7.2 | — | — | 7.2 | | Adjusted EBITDA | $ 2,224.6 | $ 527.7 | $ 441.0 | $ 2,137.9 | | Net Debt to Adjusted EBITDA | | | | 3.55 | [Reconciliation of Q1 FY26 QTD EBITDA - YOY Change](index=23&type=section&id=EBITDA%20Reconciliation) This reconciliation calculates reported and adjusted EBITDA for Q1 FY26 and FY25, detailing add-backs for tax expense, interest, depreciation, amortization, and other adjustments Q1 FY26 QTD EBITDA - YOY Change (in millions) | | Q1 FY26 | Q1 FY25 | % Change | | :-------------------------------------------------- | :-------- | :-------- | :--------- | | Net income attributable to Conagra Brands, Inc. | $ 164.5 | $ 466.8 | (64.8)% | | Add Back: Income tax expense (benefit) | 124.6 | (138.9) | | | Interest expense, net | 93.8 | 105.8 | | | Depreciation | 84.5 | 85.7 | | | Amortization | 10.8 | 13.4 | | | Earnings before interest, taxes, depreciation, and amortization | $ 478.2 | $ 532.8 | (10.2)% | | Restructuring plans 1 | 3.9 | 2.9 | | | Corporate hedging derivative losses (gains) | 2.2 | 1.3 | | | Fire related insurance recoveries | — | (17.0) | | | Consulting fees on tax matters | — | 2.0 | | | Legal matters, net of recoveries | (2.4) | 3.4 | | | Acquisitions and divestitures | 1.5 | — | | | Loss (gain) on sale of businesses | (42.4) | 2.3 | | | Adjusted Earnings before interest, taxes, depreciation, and amortization | $ 441.0 | $ 527.7 | (16.4)% | [Legal and Corporate Information](index=6&type=section&id=Legal%20and%20Corporate%20Information) This section provides details on the upcoming Q&A conference call, an overview of Conagra Brands, and a cautionary note on forward-looking statements [Discussion of Results and Outlook](index=6&type=section&id=Discussion%20of%20Results%20and%20Outlook) Conagra Brands will host a live Q&A conference call and webcast on October 1, 2025, to discuss the company's Q1 FY26 results and future outlook - Conagra Brands will host a live Q&A conference call and webcast at **9:30 a.m. Eastern time on October 1, 2025**, to discuss results and outlook[36](index=36&type=chunk) - Pre-recorded remarks, transcript, and presentation slides will be available on www.conagrabrands.com/investor-relations[36](index=36&type=chunk) [About Conagra Brands](index=6&type=section&id=About%20Conagra%20Brands) Conagra Brands, Inc. is a leading North American branded food company with a 100-year history, headquartered in Chicago, generating nearly $12 billion in net sales in fiscal 2025 - Conagra Brands, Inc. is one of North America's leading branded food companies, combining a **100-year history** with agility, collaboration, and innovation[37](index=37&type=chunk) - The company's portfolio includes well-known brands such as Birds Eye®, Duncan Hines®, Healthy Choice®, Marie Callender's®, Reddi-wip®, Slim Jim®, and Angie's® BOOMCHICKAPOP®[37](index=37&type=chunk) - Headquartered in Chicago, Conagra Brands generated fiscal 2025 net sales of nearly **$12 billion**[37](index=37&type=chunk) [Note on Forward-Looking Statements](index=8&type=section&id=Note%20on%20Forward-Looking%20Statements) This section cautions that forward-looking statements are not guarantees of performance and are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are not guarantees of performance or results and are subject to risks, uncertainties, and factors that could cause actual results to differ materially[39](index=39&type=chunk)[40](index=40&type=chunk) - Key risks include general economic and industry conditions (inflation, reduced consumer confidence), commodity prices, supply chain disruptions, competitive environment, and regulatory actions[40](index=40&type=chunk) - The company undertakes no responsibility to update these statements, except as required by law[40](index=40&type=chunk)