Conagra Brands Q3 Sales Down 6.3%, Fiscal 2025 Outlook Reaffirmed
The company records gross profit decline by 17.3% to $710 million, and adjusted gross profit was down 19.1%
Conagra Brands (NYSE: CAG) reported a 6.3% decrease in net sales for the third quarter of fiscal 2025, with organic net sales down 5.2%. The drop was driven by a 2.1% decline in price/mix and a 3.1% decrease in volume. Strategic investments in the domestic retail business and a trade expense estimate adjustment contributed to the price/mix impact.
The company's reported operating margin fell by 712 basis points to 8.4%, while the adjusted operating margin was 12.7%, a decrease of 369 basis points.
Gross profit declined 17.3% to $710 million, and adjusted gross profit was down 19.1% to $704 million. These declines were attributed to lower net sales, inflation in cost of goods sold, and productivity challenges.
Sean Connolly, president and chief executive officer of Conagra Brands, said , “Our third quarter unfolded largely as expected since our update in February at CAGNY, with strong consumption trends and share performance reflecting the continued resilience of our brands."
"While shipments lagged consumption largely due to the discrete supply constraints we announced in February, we are making solid progress in restoring inventory and improving customer service levels."
Conagra reaffirmed its fiscal 2025 guidance, expecting organic net sales to decline approximately 2% compared to fiscal 2024. The company projects an adjusted operating margin of about 14.4%, adjusted EPS of around $2.35, and free cash flow conversion greater than 100%.
"We continue to monitor the dynamic external environment while remaining focused on execution, and our fiscal 2025 guidance remains unchanged at this time," said Connolly.
