Conagra Brands Reports Decline in Q3 Fiscal 2025 Financial Performance

Conagra Brands, Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with net sales totaling $2.84 billion, a decrease of 6.3% compared to $3.03 billion in the same period last year. The company's net income also fell to $145.1 million, down from $308.8 million in the prior year, resulting in diluted earnings per share of $0.30, compared to $0.64 in the third quarter of fiscal 2024. For the first three quarters of fiscal 2025, net sales were $8.83 billion, down from $9.15 billion, while net income decreased to $896.5 million from $914.9 million.

The decline in revenue was attributed to lower sales across all segments, with the Grocery & Snacks segment experiencing a 3.2% decrease in net sales, and the Refrigerated & Frozen segment seeing a 7.2% drop. The International segment's sales fell by 17.6%, primarily due to unfavorable foreign exchange rates, while the Foodservice segment reported a 6.1% decline. The company noted that input cost inflation, unfavorable operating leverage, and strategic trade investments contributed to the overall decrease in gross profit.

In terms of strategic developments, Conagra completed two acquisitions in fiscal 2025, acquiring the manufacturing operations of a co-manufacturer for $51.2 million and Sweetwood Smoke & Co. for $179.4 million. These acquisitions are expected to enhance the company's product offerings in the Grocery & Snacks segment. Additionally, Conagra divested its 51.8% stake in Agro Tech Foods Limited, resulting in a loss of $2.3 million, and recognized impairment charges related to certain intangible assets and businesses held for sale.

Operationally, Conagra's total employee headcount remained stable, and the company continues to focus on optimizing its supply chain and improving operational efficiencies. The company reported a significant increase in selling, general, and administrative expenses, totaling $443.7 million for the third quarter, up from $387.4 million in the prior year, largely due to legal matters and restructuring charges. The company anticipates ongoing challenges from inflation and supply chain disruptions, which may impact future performance.

Looking ahead, Conagra Brands expects to navigate a challenging economic environment characterized by fluctuating commodity prices, labor cost inflation, and evolving consumer preferences. The company remains committed to its growth strategy, focusing on innovation and operational improvements to enhance profitability. Management indicated that they will continue to monitor market conditions and adjust their strategies accordingly to mitigate risks and capitalize on opportunities in the food industry.