Conagra Brands (NYSE:CAG) saw its stock price fall 5.8% on Tuesday after the company reiterated its fiscal 2026 guidance prior to a presentation at the Consumer Analyst Group of New York (CAGNY) conference. The move came against the backdrop of caution in the packaged-food sector following an outlook downgrade from a major peer.
The Chicago-based food maker maintained its prior fiscal 2026 targets, including organic net sales growth of between -1% and 1% versus fiscal 2025, an adjusted operating margin in the region of approximately 11.0% to 11.5%, and adjusted earnings per share projected between $1.70 and $1.85. Conagra did increase its full-year expectation for free cash flow conversion to approximately 100%, up from an earlier forecast of approximately 90%.
Investor confidence in the packaged-food group was eroded earlier on Tuesday when General Mills (NYSE:GIS) lowered its full-year fiscal 2026 outlook. General Mills now anticipates organic net sales to decline between 1.5% and 2%, a pullback from its prior forecast that ranged from a decline of 1% to an increase of 1%. The company attributed the weaker outlook to subdued consumer sentiment and a slower-than-expected recovery in volumes.
In addition to the sales outlook shift, General Mills projected that adjusted operating profit and adjusted diluted earnings per share would decrease between 16% and 20% in constant currency. That projection is deeper than its earlier guidance that called for a decline of 10% to 15%. General Mills shares fell about 3.6% in premarket trading after the announcement.
Both Conagra and General Mills are scheduled to present at the CAGNY conference. Conagra is expected to preview new product innovations that it plans to launch in calendar year 2026.
Summary: Conagra reaffirmed fiscal 2026 guidance while raising its free cash flow conversion target, but its stock fell amid a sector-wide reaction to General Mills' downgraded outlook. The packaged-food sector was pressured by General Mills' indication of weaker organic sales and a larger-than-expected drop in adjusted profits and EPS.
Key developments:
- Conagra reiterated fiscal 2026 ranges for organic net sales, adjusted operating margin, and adjusted EPS, and increased its free cash flow conversion expectation to approximately 100%.
- General Mills cut its fiscal 2026 organic net sales outlook to a decline of 1.5% to 2% and now expects adjusted operating profit and adjusted diluted EPS to fall 16% to 20% in constant currency.
- Market reaction included a roughly 5.8% drop in Conagra shares and about a 3.6% premarket decline in General Mills shares.