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Investing.com -- ConAgra Brands lowered its fiscal 2025 financial outlook due to supply constraints and foreign exchange headwinds, the company announced ahead of its upcoming presentation at the Consumer Analyst Group of New York (CAGNY) Conference.
The stock has declined over 5% in premarket trading following the news.
The packaged foods giant now expects organic net sales to decline by approximately 2%, compared to its previous forecast of a decline between 1.5% and flat growth.
Adjusted operating margin has been revised down to 14.4% from 14.8%, while adjusted earnings per share (EPS) are now projected at $2.35, down from the prior range of $2.45 to $2.50.
CEO Sean Connolly said ConAgra remains committed to long-term growth, despite near-term disruptions.
“We are pleased with the strong and consistently improving demand we have experienced this year as a result of those investments. While we've faced recent challenges servicing that demand, our investments in infrastructure and strategic partnerships position us for long-term success,” Connolly stated.
The company cited manufacturing challenges at a key facility producing chicken for frozen meals as a significant factor behind its revised outlook.
ConAgra temporarily halted production after noticing product quality inconsistencies and has since resumed operations at a slower pace while also working with third-party manufacturers.
Additionally, strong demand for frozen vegetables led to inventory shortages, prompting ConAgra to restrict product allocation through March 2025 to rebuild supply.
Despite the setbacks, ConAgra maintains its long-term financial targets and plans to modernize the affected chicken processing facility by early fiscal 2026.
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