MW Consumers are still struggling, as inflation is a problem again, this food company says

By Tomi Kilgore

Parent of Duncan Hines, Hunt's and Slim Jim sinks to a 13-year low as volume weakness resumes due to higher-than-expected inflation, economic worries

Inflation has become a problem again for consumers, according to branded-foods company Conagra Brands Inc., which on Thursday reported another quarterly earnings miss and provided a downbeat full-year outlook.

The company, the parent of household-name brands such as Duncan Hines, Reddi Wip, Swiss Miss, Slim Jim and Hunt's, had seen sales volumes start growing again at the end of 2024, but weakness has resumed as consumers struggle with higher-than-expected inflation.

Conagra said it expects consumer prices to remain elevated in its fiscal 2026, which runs through May 2026, with core inflation at about 4%. The latest government reading on consumer inflation showed prices up 2.4% over the past 12 months.

The stock $(CAG)$ dropped 7.8% in premarket trading, enough to pace the S&P 500 index's SPX early decliners. The selloff put the stock on track to open at a 13-year low.

For fiscal 2026, the company expects adjusted earnings per share of between $1.70 and $1.85, which is well below the current average analyst estimate complied by FactSet of $2.18.

For the fiscal fourth quarter to May 25, Conagra swung to net income of $256 million, from a loss of $567.3 million a year ago. Adjusted earnings per share, which excludes nonrecurring items, fell to 56 cents from 61 cents and missed the FactSet consensus of 58 cents.

Net sales declined 4.3% to $2.78 billion, below expectations of $2.83 billion, as prices and mix fell 1% and volume decreased 2.5% amid lower consumption trends.

That marked the third straight quarter the company missed both top- and bottom-line expectations.

Among Conagra's business segments, grocery and snacks sales fell 2.1%, refrigerated and frozen sales declined 4.4%, food-service sales were down 4% and international sales dropped 13.8%.

The stock has tumbled 26.6% in 2025 through Wednesday, while the Consumer Staples Select Sector SPDR exchange-traded fund XLP has gained 2.8% and the S&P 500 index SPX has advanced 6.5%.

-Tomi Kilgore

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July 10, 2025 09:31 ET (13:31 GMT)

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