Conagra Brands (CAG) Q4 2026 (Q&A) earnings summary

Executive summary

• Leadership is focused on balancing capital allocation between brand and supply chain investment and deleveraging, with a target leverage ratio of 3.0x over time.

• Iconic brands, strong innovation, and advanced technology are highlighted as strengths, but improvement is needed in portfolio complexity, brand investment, and financial flexibility.

• Management is committed to restoring credibility by delivering on commitments and increasing accountability.

• Strategic priorities include margin restoration, increased brand and supply chain investment, portfolio simplification, and rebalancing capital allocation.

• CEO transition occurred, with John Brase stepping in and announcing new strategic priorities.

Financial highlights

• Q4 FY26 organic net sales were $2,665M, flat year-over-year; full year organic net sales were $11,024M, down 0.4%.

• Q4 FY26 adjusted gross margin was 24.5% (down 130 bps YoY); full year 24.0% (down 175 bps YoY).

• Q4 FY26 adjusted operating margin was 11.7%; full year 11.3%.

• Adjusted EPS was $0.47 for Q4 and $1.72 for FY26.

• Free cash flow for FY26 was $979M, down from $1,303M in FY25, with free cash flow conversion at 119%.

Outlook and guidance

• FY27 guidance: organic net sales change of (3)% to (1)% vs. FY26, adjusted operating margin 10.0%-10.5%, adjusted EPS $1.40-$1.50.

• Full year volume expected down mid-single digits, especially in Frozen; price/mix expected to be roughly +3%.

• Productivity savings targeted above 4% to help offset 5%-6% inflation, with pricing actions to support margin stabilization.

• Increased A&P investment to ~3% of sales; capital expenditures planned at $550M.

• Net leverage ratio targeted at ~4.0x by year-end.