Conagra Brands issued fiscal 2027 guidance on Wednesday projecting adjusted earnings of $1.40 to $1.50 per share, below the $1.59 per share analysts were estimating on average, according to Reuters.
The company also cut its annualized dividend in half, to $0.70 from $1.40, freeing up resources to invest in the business. Chief Executive Officer John Brase, who took over from Sean Connolly in June, said the move "proactively realigns our capital allocation, accelerates progress toward our leverage target, supports critical investments, and strengthens our financial flexibility, including the ability to shape the portfolio over time," in a statement.
Conagra reported a quarterly net loss of $1.6 billion, driven by a $2 billion impairment charge that the company attributed to a prolonged drop in its stock price and overall market value. On an adjusted basis, earnings came in at 47 cents per share. Analysts had expected 46 cents per share on average, according to Reuters.
Net sales for the quarter ending May 31 came in at $2.88 billion, just under the $2.89 billion consensus estimate, according to Reuters.
For fiscal 2027, Conagra guided for organic net sales to fall somewhere in a 1% to 3% range, steeper than the 0.4% decline the company recorded in fiscal 2026. The company is also contending with rising beef costs and tariffs applied to the steel and aluminum that go into its packaging, both of which are squeezing margins, according to Reuters. Consumers facing ongoing inflation, especially at the gas pump, have increasingly turned to store-brand products as a way to manage their budgets, the company said.
Conagra shares were down roughly 4% before Wednesday's open and have lost about 18% of their value since the start of the year, according to Reuters.