Conagra Brands reported a significant loss in its fiscal fourth quarter and announced a reduction in its dividend as part of a new strategic approach under recently appointed CEO John Brase. The company, known for brands such as Orville Redenbacher’s popcorn and Slim Jim meat sticks, posted a net loss of $1.62 billion, or $3.37 per share, compared with a profit of $256 million, or 53 cents per share, in the same period a year earlier.
Excluding certain one-time items, Conagra’s adjusted earnings per share were 47 cents, narrowly surpassing the 46 cents anticipated by analysts, according to FactSet data. Fourth-quarter revenue increased by 3.6% to $2.88 billion, slightly below the $2.89 billion expected by analysts. Within the quarter, sales in the grocery and snacks segment grew modestly by 0.3%, while revenue from refrigerated and frozen foods climbed 5.3%.
In a notable change to shareholder returns, Conagra lowered its annual dividend to 70 cents per share, or 17.5 cents quarterly. This represents a significant decrease from the 35 cents per quarter, or $1.40 annually, approved in March. CEO Brase, who took the helm last month, characterized the dividend cut as a deliberate move aimed at improving Conagra’s financial position. He emphasized a focus on restoring profit margins, boosting brand investments, and simplifying the company’s operational structure.
“Taking action against these opportunities will improve our competitiveness, build a strong foundation for growth, and help unlock the full potential of our portfolio,” Brase said in a statement.
The quarter’s results were heavily impacted by a $2 billion non-cash goodwill and brand impairment charge, largely driven by a sustained decline in Conagra’s share price and overall market capitalization. The company’s stock experienced a slight drop of less than 1% in Wednesday trading, closing at $14.09, and has fallen 18.6% year to date.
Looking ahead, Conagra projected adjusted earnings per share for the new fiscal year in the range of $1.40 to $1.50, falling short of analyst expectations, which stood at $1.56 per share. The company’s recent financial performance and strategic adjustments reflect an effort to stabilize earnings and position itself for more sustainable long-term growth amid challenging market conditions.