Conagra Brands swung to a $1,916.2M net loss (-$4.00 diluted EPS) in FY2026 primarily due to $2.93 billion in non-cash goodwill and brand intangible impairment charges (notably Birds Eye and Refrigerated & Frozen), even as revenue declined 2.9% and operating cash flow remained solidly positive at $1,402.1M.
$2.93 Billion Goodwill and Brand Impairment Drove the Net Loss
Fiscal 2026 results were dominated by charges totaling $2.93 billion ($2.73 billion after-tax) related to impairments of goodwill and certain brand intangible assets, primarily tied to the Birds Eye brand and the Refrigerated & Frozen reporting unit. This was the key item impacting comparability, alongside smaller items like a $45.7M restructuring charge and an $8.1M CEO separation charge.
Net sales for FY2026: Grocery & Snacks $4,610.1M (-5.9%), Refrigerated & Frozen $4,641.8M (-0.4%), International $913.9M (-4.4%), and Foodservice $1,115.8M (+1.9%). All segments included a benefit from the 53rd week in fiscal 2026, but organic volume declines (e.g., -2.4% in Grocery & Snacks, -4.2% in International) were the primary drag.
Source: 10-K Item 7 MD&A - Net Sales table
$42.2$20.6$648.9M
Divestitures of Chef Boyardee and Frozen Fish Businesses
Conagra sold its Chef Boyardee and frozen fish businesses in the first quarter of fiscal 2026, generating a net gain of $42.2 million ($20.6 million after-tax loss) and $648.9M in divestiture proceeds used to fund debt repayment and offset investing outflows. These businesses contributed only $7.0M and $4.9M to FY2026 net sales respectively, versus $385.9M and $76.8M in FY2025.
The company recorded $2.93 billion in impairment charges in FY2026 related to goodwill and brand intangibles, primarily the Birds Eye brand and the Refrigerated & Frozen reporting unit, based on discounted cash flow and market multiple assumptions. Changes in terminal growth rates, discount rates, or forecasted margins could trigger further impairments given remaining goodwill of $8.12 billion and indefinite-lived intangibles of $1.25 billion.
Yes, Conagra reported a net loss of $1,916.2M in FY2026, or a diluted loss per share of $4.00, compared to net income of $1,152.4M ($2.40 diluted EPS) in fiscal 2025. The loss was primarily driven by $2.93 billion in goodwill and brand intangible asset impairment charges, mainly related to the Birds Eye brand and Refrigerated & Frozen reporting unit.
Why did CAG's revenue decline in FY2026?
Net sales fell 2.9% to $11,281.6M from $11,612.8M, as organic sales declines in Grocery & Snacks, Refrigerated & Frozen, and International segments more than offset growth in Foodservice, despite an extra (53rd) week in fiscal 2026. Grocery & Snacks sales fell 5.9%, Refrigerated & Frozen fell 0.4%, and International fell 4.4%, while Foodservice grew 1.9%.
What caused Conagra's huge operating loss in FY2026?
Operating income swung to a loss of $1,628.4M from income of $1,364.6M a year earlier, primarily due to $2.93 billion of goodwill and brand intangible impairment charges ($2.38B goodwill, $547.2M indefinite-lived intangibles) tied to the Birds Eye brand and the Refrigerated & Frozen reporting unit. Lower net sales, input cost inflation, and unfavorable operating leverage also pressured gross profit, which fell 10.2% to $2,698.4M.
What risks did Conagra Brands highlight in its FY2026 10-K?
Key risks include high leverage with total debt of approximately $7.27 billion (including $762.5 million maturing in October 2026), continued commodity cost inflation (wheat, corn, vegetable oils, dairy, steel), tariff-driven cost increases (e.g., tin-plate steel for canned products), and product liability/labeling litigation risk including claims about ultra-processed foods. Seasonality and weak consumer sentiment amid inflation were also cited as ongoing pressures.
Did Conagra generate positive cash flow in FY2026 despite the net loss?
Yes, despite the net loss, Conagra generated $1,402.1M in operating cash flow (down 17.1% from $1,691.9M) and $262.6M in investing cash flow, aided by $648.9M in proceeds from divesting the Chef Boyardee and frozen fish businesses. Overall cash increased by $150.0M during fiscal 2026, ending with $218.0M in cash and equivalents versus $68.0M a year prior.