The news: Conagra topped Q1 earnings and sales estimates, but like its consumer-packaged goods (CPG) peers, it’s still grappling with tariffs, inflation, and cost-conscious shoppers shifting to cheaper store brands.

• Net sales fell 5.8% YoY to $2.63 billion, just ahead of analysts’ estimates, in the quarter ended August 24.
• Organic net sales decreased 0.6% YoY, as a 0.6% boost from higher prices and a better product mix were more than offset by a 1.6% drop in sales volumes.
• Adjusted earnings per share came to 39 cents, down 26.4% YoY, but ahead of the 33 cents analysts expected.
• The company maintained its guidance of net sales growth of -1% to 1% and adjusted EPS of $1.70 to $1.85.

Zooming in on snacks: Conagra’s snack volumes fell 2.3% YoY, but protein snacks—led by Slim Jim and Big Mama meat sticks—rose 4% and seeds—led by David sunflower seeds—were up 2%.

• Those gains were offset by sharp declines at two key brands: Angie’s Boomchickapop dropped 19% because major promotions shifted into Q2, while Duncan Hines fell 8% as higher cocoa costs forced price hikes, leading consumers to buy less.
• Even so, Conagra’s snack sales still outperformed the broader category, with dollar sales up 2.2% versus 0.5% for the broader market.

Looking ahead: Tariffs and supply shortages remain headwinds. Conagra plans targeted price hikes—especially on canned goods and cocoa products—to absorb rising costs.

Our take: With consumers growing more cost-conscious, sustaining momentum will be an uphill battle for Conagra and all CPG brands. Maintaining growth will require more than price increases; it will demand a value proposition that keeps core customers loyal.

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