Conagra shares fell 4.9% after earnings, with investors likely reacting to the weaker near-term outlook: management guided to a 2% organic sales decline in Q2 and higher single-digit operating margin, down from Q1’s 11.5%. Higher inflation and SG&A costs moving into Q2 add pressure.
- Q2 organic sales guidance is down 2%; management cited Thanksgiving timing and maintained its planned elasticity assumptions.
- Full-year inflation remains forecast at 5%–6%, toward the higher end, with transportation costs rising faster than planned.
- Q1 operating margin was 11.5%; Q2 is expected to be in the high single digits.
- Q1 SG&A favorability added roughly $0.03 to EPS: half was a one-time benefit and half reflects timing, with that spending expected in Q2.
- Management said pricing was accepted by customers as expected and is embedded in the fiscal-year forecast.
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