Duncan Hines Owner Conagra Brands Stock Sinks as Consumers Pull Back on Spending

Key Takeaways

• Shares of Conagra Brands tumbled roughly 10% Wednesday morning after the food maker missed first-quarter earnings and revenue estimates in what its CEO called a continuing "challenging environment."
• The company's organic net sales and gross profit declined.
• Conagra's costs soared more than 150% as it paid higher compensation.

Shares of Conagra Brands (CAG) tumbled roughly 10% Wednesday morning after the food maker posted worse-than-expected results as consumers pulled back on spending.

The maker of Slim Jim snacks and Duncan Hines cake mixes reported fiscal 2025 first-quarter adjusted earnings per share (EPS) of $0.53, down nearly 20% year-over-year, with revenue falling 3.8% to $2.79 billion. Both were below consensus forecasts of analysts polled by Visible Alpha.

Organic net sales dropped 3.5%, which Conagra attributed to a 1.9% negative impact from price/mix and a 1.6% decrease in volume. In addition, it said temporary manufacturing disruptions at its Hebrew National operations during the peak grilling season impacted results by about $27 million.

Gross profit declined 10% to $739 million on "lower organic net sales, cost of goods sold inflation, and unfavorable operating leverage."

CEO Notes Continuing 'Challenging Environment'

Chief Executive Officer (CEO) Sean Connolly said the company faced "what continued to be a challenging environment."

Along with the slide in sales and adjusted profit, expenses soared more than 150% to $92 million, primarily because of increased wages. 

The company affirmed its fiscal 2025 organic net sales outlook in a range of a 1.5% decrease to flat, and adjusted EPS of $2.60 to $2.65.

Even with today's slide, Conagra Brands shares remain slightly higher year-to-date.

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