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Conagra Brands, Inc. CAG posted fourth-quarter fiscal 2025 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.

The company faced tougher-than-expected conditions in fiscal 2025 but noted progress in restoring volume growth, especially in domestic retail. Despite inflation, currency and supply challenges in the second half, the company’s long-term strategy remains solid. For fiscal 2026, Conagra will focus on snacks and frozen foods, supply-chain resilience and cost discipline to drive sustainable growth.

CAG’s Quarterly Performance: Key Metrics and Insights

Conagra’s quarterly adjusted earnings per share (EPS) were 56 cents, which missed the Zacks Consensus Estimate of 59 cents. Additionally, the bottom line declined 8.2% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Conagra Brands Price, Consensus and EPS Surprise

Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote

The company generated net sales of $2,781.8 million, which declined 4.3% year over year, missing the Zacks Consensus Estimate of $2,844 million. The top-line decline resulted from a decrease in organic net sales, adverse currency movements and an unfavorable impact of M&A.

Organic net sales decreased 3.5% year over year due to a 1% negative impact from price/mix and a 2.5% decrease in volume, primarily due to softer consumption trends. Despite this, Conagra gained volume share in key categories such as frozen desserts, microwave popcorn, refrigerated whipped topping and pudding.

The adjusted gross profit declined 10.7% to $717 million, as productivity gains were outweighed by lower sales, cost inflation and unfavorable operating leverage. The adjusted gross margin contracted 184 basis points (bps) to 25.8%. We estimated a 24.8% adjusted gross margin.

Adjusted SG&A expenses, excluding advertising and promotional costs, decreased 10.8% year over year to $333 million due to lower incentive compensation. 

Adjusted EBITDA (including equity method investment earnings, and pension and post-retirement non-service income) was $544 million, down 5.7% year over year.

Decoding CAG’s Segmental Performance

Grocery & Snacks: Quarterly net sales in the segment were $1,150.2 million, which was down 2.1% year over year and missed our estimate of $1,245.4 million. M&A contributed a 1.2% sales boost, while organic sales declined 3.3%, caused by a 1.6% drop in volume and a 1.7% decrease in price/mix. 

Refrigerated & Frozen: Net sales and organic sales decreased 4.4% year over year to $1,121.8 million, slightly beating our estimate of $1,115.6 million. The price/mix fell 2.3%, while volume decreased 2.1%. 

International: Net sales declined 13.8% year over year to $230.1 million, beating our estimate of $223.9 million. Organic net sales increased 0.8%. M&A had a 7.3% negative effect on sales and adverse currency effects impacted the metric by 7.3%. Organic sales included a 4.7% increase in the price/mix and a volume decline of 3.9%. 

Foodservice: Reported sales were $279.7 million, down 4% year over year but up from our estimate of $256.1 million. Organic sales fell 4.3% and M&A positively contributed 0.3% to reported sales. The price/mix improved 3.3%, whereas volumes declined 7.6%.

CAG’s Financial Health Snapshot

The company exited the quarter with cash and cash equivalents of $68 million, senior long-term debt (excluding current installments) of $6,234.1 million and total stockholders’ equity of $8,932.7 million. 

For fiscal 2025, Conagra generated $1,691.9 million in net cash flows from operating activities, with capital expenditures amounting to $389.3 million. The company generated a free cash flow of $1,302.6 million. 

Conagra also declared a quarterly dividend of 35 cents per share, payable on Aug. 28, 2025, to its shareholders of record as of July 30, reflecting an annualized dividend of $1.40.

What to Expect From CAG in FY26?

For fiscal 2026, the company expects negative 1% to positive 1% in organic net sales growth. The adjusted operating margin is anticipated between 11% and 11.5%, while adjusted earnings are forecasted between $1.70 and $1.85 per share, down from $2.30 in fiscal 2025. Capital expenditure is likely to be around $450 million.

Shares of this Zacks Rank #5 (Strong Sell) company have tumbled 23.7% in the past three months compared with the industry’s decline of 2%.

Some Solid Bets

Post Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The consensus estimate for Post Holdings’ current fiscal-year earnings implies growth of 5.7% from the year-ago figures. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.

TreeHouse Foods, Inc. THS manufactures and distributes private brands snacks and beverages in the United States and internationally and presently flaunts a Zacks Rank of 1. THS delivered a trailing four-quarter earnings surprise of 58.8%, on average.

The Zacks Consensus Estimate for TreeHouse Foods’ current financial-year sales indicates growth of 0.4% from the year-ago numbers.

BRF S.A. BRFS raises, produces and slaughters poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank of 2 (Buy). BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.

The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings indicates growth of 11.1% and 8.33%, respectively, from the prior-year levels.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

McCormick & Company, Incorporated MKC reported second-quarter fiscal 2025 results, with the top line increasing year over year but missing the Zacks Consensus Estimate. The bottom line was flat year over year but surpassed the consensus mark.

The adjusted earnings of 69 cents per share were unchanged from the year-ago quarter. The Zacks Consensus Estimate was 65 cents per share. The comparable performance was driven by higher operating income and increased contributions from unconsolidated operations, partially offset by a less favorable tax rate resulting from discrete tax items. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

McCormick & Company, Incorporated Price, Consensus and EPS Surprise

McCormick & Company, Incorporated price-consensus-eps-surprise-chart | McCormick & Company, Incorporated Quote

This global leader in flavor generated net sales of $1,659.5 million, which was down from the Zacks Consensus Estimate of $1,663 million. However, the metric increased 1% from the year-ago period and included a 1% unfavorable currency impact. Organic sales grew 2% on favorable volume and product mix.

MKC’s Quarterly Performance: Key Metrics & Insights

McCormick’s gross profit for the fiscal second quarter rose $3 million, reaching $622.8 million. The gross profit margin contracted 20 basis points (bps) to reach 37.5%, primarily due to increased costs associated with expanding capacity for growth and higher commodity prices. These pressures were partially offset by cost savings driven by the company’s Comprehensive Continuous Improvement (“CCI”) program.

The adjusted operating income increased 10%, totaling $259 million, with a 1% unfavorable impact from currency fluctuations. In constant currency, adjusted operating income increased 11%, largely due to lower selling, general and administrative (SG&A) expenses, driven by the timing shift of stock-based compensation expenses from the second quarter to the first quarter, along with ongoing cost savings from the CCI program, including SG&A streamlining initiatives. These gains were partially offset by lower gross margin, continued investment in brand marketing and higher technology spending.

Decoding MKC’s Segmental Performance

Consumer: Sales were $931 million, up 3% from the year-ago quarter’s level, with minimal impact from currency fluctuations. Organic sales advanced 3%, driven by favorable volume and product mix. Regionally, sales grew 2.4% in the Americas, 4.9% in EMEA and 2.9% in APAC. Our model expected Consumer sales of $918 million for the quarter.

Flavor Solutions: Sales in the segment decreased 1% to $729 million, with a 1% unfavorable currency impact. Organic sales were flat year over year, caused by a 1% increase from price, offset by a 1% decrease in volume and product mix. Flavor Solutions’ sales in the Americas and EMEA inched down 1% and 4.7%, respectively. Its sales in APAC increased 3.1%. We anticipated Flavor Solutions' sales of $747 million for the quarter.

MKC’s Financial Health Snapshot

McCormick exited the quarter with cash and cash equivalents of $124.1 million, long-term debt of $3,099.3 million and total shareholders’ equity of $5,630.4 million. In the six months ended May 31, 2025, net cash provided by operating activities was $161.4 million.

For fiscal 2025, the company anticipates strong cash flow, driven by profitability and working capital initiatives. In addition, it expects to return a significant portion of this cash flow to shareholders through dividends.

What to Expect From MKC in 2025?

McCormick's fiscal 2025 outlook indicates its continued focus on strategic investments in key categories to strengthen volume trends and drive long-term profitable growth amid current uncertainty in the consumer and macroeconomic environment. The company's CCI program remains a key driver of growth investments and operating margin expansion. In addition, McCormick expects foreign currency fluctuations to negatively impact sales and adjusted operating income by 1% each, as well as adjusted earnings per share (EPS) by 2%.

For fiscal 2025, management still expects net sales growth in the range of flat to increasing 2% (up 1-3% at constant currency). Sales are likely to be backed by volume-led growth across both company segments and a gradual improvement in China’s consumers.

It expects adjusted operating income to grow 3-5% and increase 4-6% at constant currency. Management envisions fiscal 2025 adjusted EPS in the band of $3.03-$3.08, which indicates a 3-5% increase from the year-ago period. On a constant currency basis, the adjusted EPS is expected to increase 5-7%. On a GAAP basis, McCormick projects fiscal 2025 earnings in the range of $2.98-$3.03 per share, indicating 2-4% year-over-year growth.

This Zacks Rank #4 (Sell) stock has lost 9.3% in the past three months compared with the industry’s decline of 5.3%.

General Mills, Inc. GIS reported fourth-quarter fiscal 2025 results, wherein the bottom line surpassed the Zacks Consensus Estimate and the top line missed the same. Both earnings and net sales declined year over year, reflecting weaker performance.

The company’s efforts to deliver greater consumer value in late fiscal 2025 paid off, with improved volume and share trends in the quarter. Building on that momentum, the company plans to sharpen its focus on innovation and marketing in fiscal 2026, supported by cost-saving initiatives and a global transformation strategy. A major product expansion is also slated, including Blue Buffalo’s entry into the fresh pet food space later in the year.

General Mills posted adjusted earnings of 74 cents per share, which beat the Zacks Consensus Estimate of 71 cents. The bottom line declined 27% year over year on a constant-currency (cc) basis, attributed to reduced adjusted operating profit. However, the impact was partially offset by reduced net shares outstanding. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

General Mills, Inc. Price, Consensus and EPS Surprise

General Mills, Inc. price-consensus-eps-surprise-chart | General Mills, Inc. Quote

Net sales dropped 3% to $4,556.2 million, impacted by reduced pound volume and unfavorable net price realization and mix. Organic net sales also saw a 3% decline, including a 2-point headwind from unfavorable trade expense timing. Organic pound volume was in line with last year. The top line missed the Zacks Consensus Estimate of $4,604 million.

GIS’ Quarterly Margin Performance

The adjusted gross margin declined 220 basis points (bps), reaching 32.7% of net sales, mainly due to input cost inflation and unfavorable net price realization and mix. Moreover, the timing of trade expenses created a 150-bps headwind during the quarter. We expected a gross margin contraction of 320 bps.

General Mills’ adjusted operating profit dropped 22% in constant currency, impacted by reduced adjusted gross profit dollars and increased adjusted selling, general and administrative (SG&A) expenses. The adjusted operating profit margin was down 330 bps, reaching 13.7%, with unfavorable trade expense timing accounting for a 190 bps headwind during the quarter. We expected an adjusted operating margin of 12.9% for the quarter.

Decoding GIS’ Segmental Performance

North America Retail: Revenues in the segment were $2,559.8 million, down 10% year over year. The decrease was due to reduced pound volume and unfavorable net price realization and mix. The Canada yogurt divestiture contributed to a 3% reduction in net sales. Organic net sales declined 7%. Segment operating profit fell 29% to $473.8 million, mainly owing to unfavorable net price realization and mix, input cost inflation and reduced volume. HMM cost savings offered some respite. However, unfavorable trade expense timing represented a 17-point headwind to operating profit growth in the quarter.

International: Revenues in the segment were $738.9 million, up 11% year over year, including a 4-point boost from the Edgard & Cooper acquisition and a 2-point headwind from unfavorable foreign currency exchange. Organic net sales up 9%, thanks to strong growth in Brazil and distributor markets. Segment operating profit increased 50% to $33.7 million.

North America Pet: Revenues rose 12% year over year to $675.2 million, including a 9-point contribution from the acquisition of North America’s Whitebridge Pet Brands. Organic net sales grew 3%, outperforming all-channel retail sales by roughly 3 points, mainly due to increased retailer inventory ahead of first-quarter activations. Segment operating profit declined 3% to $140.1 million, impacted by higher input costs and a double-digit increase in media investment, partially offset by favorable pricing and mix, as well as increased volume.

North America Foodservice: Revenues were $579.4 million, which decreased 2% with organic net sales down 1%. Decline was due to softness in bakery flour and bread. Segment operating profit grew 5% to $83.1 million, supported by HMM cost savings, though input cost inflation posed challenges.

GIS’ Financial Health Snapshot & Other Developments

General Mills ended the quarter with cash and cash equivalents of $363.9 million, long-term debt of $12,673.2 million and total stockholders’ equity (excluding noncontrolling interests) of $9,199.2 million.

GIS generated $2,918.2 million in cash from operating activities in fiscal 2025. Capital investments amounted to $625.3 million during the same period. The company paid out dividends worth $1.3 billion and bought nearly 19 million shares for $1.2 billion in fiscal 2025.

The company has declared a quarterly dividend of 61 cents per share, payable on Aug. 1, 2025, to its shareholders of record as of July 10. This represents a 2% increase from the prior-quarter dividend of 60 cents per share.

Constant-currency sales from the joint venture of Cereal Partners Worldwide inched down 6% in the fiscal fourth quarter. For Haagen-Dazs Japan, sales jumped 1% year over year at cc.

What to Expect From GIS in Fiscal 2026

General Mills’ top priority for fiscal 2026 is to revive volume-driven organic sales growth amid a challenging consumer environment. The company plans increased investment in value, innovation and brand building, including launching Blue Buffalo in the U.S. fresh pet food segment. Still, these growth efforts, along with input cost inflation and tariffs, are expected to exceed savings initiatives. Additionally, yogurt divestitures and the Whitebridge Pet acquisition are projected to reduce adjusted operating profit growth by about 5 points.

The company has provided its full-year fiscal 2026 outlook. Organic net sales are projected to range from a 1% decline to a 1% increase, while adjusted operating profit and adjusted earnings per share (EPS) are expected to decline 10% to 15% in constant currency. Free cash flow conversion is anticipated to be at least 95% of adjusted after-tax earnings.

This Zacks Rank #4 (Sell) company’s shares have lost 14.2% in the past three months compared with the industry’s decline of 3.4%.