Conagra Brands Issues Weak Profit Forecast, Cuts Dividend Amid Cost Pressures

Conagra Brands Inc. (NYSE: CAG) forecast its annual profit below Wall Street expectations and announced a dividend cut, signaling that elevated commodity costs and hesitant consumer spending are expected to continue weighing on its performance. The news sent shares of the Slim Jim and Hunt's maker down approximately 3% in premarket trading on Wednesday.

Outlook Misses Estimates

For its fiscal year 2027, the company projects adjusted profit in the range of $1.40 to $1.50 per share. This forecast falls short of the analyst consensus of $1.59 per share, according to data compiled by LSEG.

Conagra also anticipates a decline in annual organic net sales of between 1% and 3%. This would mark an acceleration from the 0.4% decline reported for fiscal 2026, suggesting mounting headwinds for the packaged foods company.

Persistent Margin Pressures

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Conagra's guidance reflects ongoing challenges from input cost inflation. The company has been contending with higher beef prices, a key ingredient for its Slim Jim brand, as well as tariffs on steel and aluminum used for its canned goods packaging.

While Conagra increased prices last year in an effort to offset these higher costs, the new forecast indicates that these measures may not be enough to fully protect its profit margins, especially as consumers become more cautious with their spending.

Market Impact

The combination of a weaker-than-expected earnings forecast and a dividend cut is a negative signal for investors, reflecting management's concerns about near-term profitability and cash flow. The premarket stock decline indicates that the market is recalibrating its expectations for Conagra's ability to navigate the current economic environment of high costs and shifting consumer demand.