Conagra Plunges to $663.6M Loss on Massive Impairment Charges

TL;DR

**Conagra's massive impairment charges and sales slump make it a clear sell, signaling deep trouble in its brand portfolio.**

AI Summary

Conagra Brands Inc. reported a significant net loss of $663.6 million for the thirteen weeks ended November 23, 2025, a stark contrast to the net income of $284.5 million in the prior-year period. This downturn was primarily driven by substantial goodwill impairment charges of $771.3 million and other intangible asset impairment charges of $197.0 million. Net sales decreased by 6.8% to $2,979.1 million from $3,195.1 million in the comparable thirteen-week period. For the twenty-six weeks ended November 23, 2025, the company posted a net loss of $499.1 million, compared to a net income of $751.4 million in the previous year, with net sales falling to $5,611.7 million from $5,990.0 million. Strategic divestitures included the Chef Boyardee business for $607.0 million and the frozen fish business (Van De Kamp's and Mrs. Paul's brands) for $41.9 million, generating a net gain on divestitures of $42.7 million for Chef Boyardee and a loss of $0.5 million for the frozen fish business. The company also acquired manufacturing operations for cooking spray products for $51.2 million and Sweetwood Smoke & Co. for $179.4 million, adding $46.3 million and $130.0 million in goodwill respectively.

Why It Matters

Conagra's substantial net loss, driven by over $968 million in impairment charges, signals significant challenges in its brand portfolio and market valuation, which could erode investor confidence and impact its stock performance. The divestiture of iconic brands like Chef Boyardee and Van De Kamp's/Mrs. Paul's indicates a strategic shift, potentially streamlining operations but also ceding market share in certain categories to competitors. For employees, these shifts could lead to further restructuring and job impacts, while customers might see changes in product availability or brand focus. The broader market will watch how Conagra navigates these impairments and strategic realignments in a competitive consumer packaged goods landscape.

Risk Assessment

Risk Level: high — The risk level is high due to the significant net loss of $663.6 million for the thirteen weeks ended November 23, 2025, primarily driven by $771.3 million in goodwill impairment charges and $197.0 million in other intangible asset impairment charges. This indicates a substantial write-down of asset values and a severe impact on profitability, raising concerns about future earnings stability and asset valuation.

Analyst Insight

Investors should consider reducing their exposure to Conagra Brands (CAG) given the substantial impairment charges and declining net sales. Await further clarity on the company's strategy to stabilize its core brands and improve profitability before considering new positions.

Financial Highlights

revenue

$2,979.1M

net Income

($663.6M)

eps

($1.39)

gross Margin

23.4%

cash Position

$46.6M

revenue Growth

-6.8%

Revenue Breakdown

Key Numbers

• $663.6M — Net loss attributable to Conagra Brands, Inc. (for the thirteen weeks ended November 23, 2025, compared to $284.5 million net income in the prior-year period.)
• $771.3M — Goodwill impairment charges (for the thirteen and twenty-six weeks ended November 23, 2025.)
• $197.0M — Other intangible asset impairment charges (for the thirteen and twenty-six weeks ended November 23, 2025.)
• $2,979.1M — Net sales (for the thirteen weeks ended November 23, 2025, down from $3,195.1 million in the prior-year period.)
• $499.1M — Net loss attributable to Conagra Brands, Inc. (for the twenty-six weeks ended November 23, 2025, compared to $751.3 million net income in the prior-year period.)
• $607.0M — Net proceeds from Chef Boyardee divestiture (completed during the first quarter of fiscal 2026.)
• $41.9M — Net proceeds from frozen fish business divestiture (completed during the first quarter of fiscal 2026.)
• $179.4M — Cash purchase price for Sweetwood Smoke & Co. (acquired in August 2024.)
• $46.6M — Cash and cash equivalents (as of November 23, 2025, down from $68.0 million as of May 25, 2025.)
• $1.39 — Diluted loss per share (for the thirteen weeks ended November 23, 2025, compared to $0.59 diluted earnings per share in the prior-year period.)

Key Players & Entities

• CONAGRA BRANDS INC. (company) — registrant
• Chef Boyardee (company) — divested business
• Van De Kamp's (company) — divested brand
• Mrs. Paul's (company) — divested brand
• Sweetwood Smoke & Co. (company) — acquired company
• Agro Tech Foods Limited (company) — divested equity stake
• New York Stock Exchange (regulator) — exchange where CAG is registered
• FASB (regulator) — accounting standard setter
• SEC (regulator) — filing oversight

FAQ

Risk Factors

• Significant Impairment Charges [high — financial]: The company recorded substantial goodwill impairment charges of $771.3 million and other intangible asset impairment charges of $197.0 million for the thirteen and twenty-six weeks ended November 23, 2025. These charges significantly impacted net income, leading to a net loss of $663.6 million for the thirteen-week period.
• Supply Chain Disruptions [medium — operational]: While not explicitly detailed in the provided excerpt, the decrease in net sales and cost of goods sold suggests potential impacts from supply chain issues, inflation, or shifts in consumer demand that could affect operational efficiency and profitability.
• Changing Consumer Preferences [medium — market]: The divestiture of brands like Chef Boyardee and frozen fish products indicates a strategic shift, possibly in response to evolving consumer preferences for healthier or different types of food products. Failure to adapt to these trends could impact future sales.
• Impact of Divestitures and Acquisitions [medium — financial]: The company completed divestitures generating $648.9 million in proceeds and acquired businesses for $230.6 million. While intended to reshape the portfolio, these transactions introduce integration risks and can temporarily affect financial performance metrics.

Industry Context

Conagra Brands operates in the highly competitive consumer packaged goods industry, facing pressure from both large established players and smaller, agile brands. Trends towards healthier eating, plant-based options, and convenience continue to shape consumer demand. The industry is characterized by significant marketing expenditures, complex supply chains, and sensitivity to input costs and retail shelf space.

Regulatory Implications

As a large food producer, Conagra is subject to extensive regulations from bodies like the FDA concerning food safety, labeling, and manufacturing practices. Changes in food safety standards or increased scrutiny on ingredients could necessitate costly operational adjustments or product reformulations.

What Investors Should Do

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Key Dates

• 2025-11-23: End of thirteen and twenty-six week reporting period — Marks the period for which the significant net loss and impairment charges were reported.
• 2025-05-25: Previous fiscal year end — Represents the prior balance sheet date, showing a higher cash position of $68.0 million compared to $46.6 million.
• 2024-08: Acquisition of Sweetwood Smoke & Co. — Part of strategic acquisitions, adding $130.0 million in goodwill.
• 2026-Q1: Divestiture of Chef Boyardee and frozen fish business — Strategic divestitures that impacted reported sales and generated gains/losses.

Glossary

Goodwill impairment charges

A non-cash charge taken when the carrying value of goodwill on the balance sheet is deemed to be permanently impaired, meaning its fair value is less than its book value. (These charges of $771.3 million were the primary driver of Conagra's net loss in the current period.)

Other intangible asset impairment charges

Similar to goodwill impairment, this is a non-cash charge recognized when the value of other identifiable intangible assets (like brand names or patents) falls below their recorded cost. (These charges of $197.0 million further contributed to the significant net loss.)

Net sales

The total revenue generated from the sale of goods and services after deducting returns, allowances, and discounts. (Reported a decrease of 6.8% to $2,979.1 million, reflecting divestitures and potentially weaker demand.)

Diluted earnings (loss) per share

The net income or loss attributable to each share of common stock, assuming all convertible securities and stock options were exercised. (The company reported a diluted loss per share of ($1.39) for the thirteen weeks ended November 23, 2025, down from earnings of $0.59 in the prior year.)

Divestitures

The sale or disposal of a business unit, product line, or asset. (Conagra divested the Chef Boyardee and frozen fish businesses, impacting its portfolio and financial results.)

Year-Over-Year Comparison

Compared to the prior-year period, Conagra Brands experienced a significant downturn. Net sales for the thirteen weeks ended November 23, 2025, decreased by 6.8% to $2,979.1 million from $3,195.1 million. Most notably, the company swung from a net income of $284.5 million to a net loss of $663.6 million, primarily due to substantial goodwill and intangible asset impairment charges totaling $968.3 million. Diluted earnings per share also shifted from $0.59 to a loss of $1.39.

Key Financial Figures

• $5.00 — nge on which registered Common Stock, $5.00 par value CAG New York Stock Exchan

Filing Documents

• tmb-20251123x10q.htm (10-Q) — 2409KB
• tmb-20251123xex31d1.htm (EX-31.1) — 12KB
• tmb-20251123xex31d2.htm (EX-31.2) — 12KB
• tmb-20251123xex32.htm (EX-32) — 9KB
• 0001104659-25-123200.txt ( ) — 12263KB
• tmb-20251123.xsd (EX-101.SCH) — 55KB
• tmb-20251123_cal.xml (EX-101.CAL) — 77KB
• tmb-20251123_def.xml (EX-101.DEF) — 257KB
• tmb-20251123_lab.xml (EX-101.LAB) — 518KB
• tmb-20251123_pre.xml (EX-101.PRE) — 414KB
• tmb-20251123x10q_htm.xml (XML) — 3176KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1 Item 1

Financial Statements

Financial Statements 1 Unaudited Condensed Consolidated Statements of Operations for the Thirteen and Twenty-Six Weeks Ended November 23, 2025 and November 24, 2024 1 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Thirteen and Twenty-Six Weeks Ended November 23, 2025 and November 24, 2024 2 Unaudited Condensed Consolidated Balance Sheets as of November 23, 2025 and May 25, 2025 3 Unaudited Condensed Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended November 23, 2025 and November 24, 2024 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4

Controls and Procedures

Controls and Procedures 30

OTHER INFORMATION

PART II. OTHER INFORMATION 31 Item 1

Legal Proceedings

Legal Proceedings 31 Item 1A

Risk Factors

Risk Factors 31 Item 5 Other Information 31 Item 6 Exhibits 31

Signatures

Signatures 32 Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Conagra Brands, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in millions except per share amounts) (unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended November 23, 2025 November 24, 2024 November 23, 2025 November 24, 2024 Net sales $ 2,979.1 $ 3,195.1 $ 5,611.7 $ 5,990.0 Cost of goods sold 2,283.1 2,348.4 4,275.1 4,404.0 Gross profit $ 696.0 $ 846.7 $ 1,336.6 $ 1,586.0 Selling, general and administrative expenses 325.1 425.2 660.7 760.6 Goodwill impairment charges 771.3 — 771.3 — Other intangible asset impairment charges 197.0 18.9 197.0 18.9 Loss (gain) on divestitures 0.2 — ( 42.2 ) 2.3 Operating profit (loss) $ ( 597.6 ) $ 402.6 $ ( 250.2 ) $ 804.2 Pension and postretirement non-service income 6.1 3.1 12.2 6.2 Interest expense, net 96.0 108.2 189.8 214.0 Equity method investment earnings 32.2 48.5 61.6 77.6 Income (loss) before income taxes ( 655.3 ) 346.0 ( 366.2 ) 674.0 Income tax expense (benefit) 8.3 61.5 132.9 ( 77.4 ) Net income (loss) $ ( 663.6 ) $ 284.5 $ ( 499.1 ) $ 751.4 Less: Net income attributable to noncontrolling interests — — — 0.1 Net income (loss) attributable to Conagra Brands, Inc. $ ( 663.6 ) $ 284.5 $ ( 499.1 ) $ 751.3 Earnings (loss) per share — basic Net income (loss) attributable to Conagra Brands, Inc. common stockholders $ ( 1.39 ) $ 0.60 $ ( 1.04 ) $ 1.57 Earnings (loss) per share — diluted Net income (loss) attributable to Conagra Brands, Inc. common stockholders $ ( 1.39 ) $ 0.59 $ ( 1.04 ) $ 1.57 See Notes to the Unaudited Condensed Consolidated Financial Statements. 1 Table of Contents Conagra Brands, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Loss) (in millions) (unaudited) Thirteen Weeks Ended November 23, 2025 November 24, 2024