NYSE:CAG
CONAGRA BRANDS INC.
A diversified consumer packaged goods leader offering a wide range of trusted food brands across pasta, frozen meals, and snacks in North America.
Key Metrics
Investment Thesis
Bull Case
Investors may favor Conagra Brands for its robust free cash flow generation, which provides ample coverage for dividends ($669.2M) and share repurchases while funding necessary infrastructure investments. The company's diversified brand portfolio offers defensive characteristics during economic downturns, as consumers tend to stick to trusted value brands. Strong operational efficiency, evidenced by a CFO-to-net-income ratio of 1.15, suggests disciplined management capable of navigating inflationary environments.
Bear Case
Concerns regarding the heavy debt load, with long-term debt at $6.23B against current liabilities of $4.32B, could limit financial flexibility and increase interest rate risk. The recent decline in revenue over the past three years may signal weakening demand or competitive erosion that could persist if consumer spending slows further. High capital expenditures relative to cash reserves suggest significant ongoing investment requirements that could pressure cash flow if returns do not meet expectations.
About CONAGRA BRANDS INC.
Conagra Brands Inc. is a leading food manufacturer serving households across North America with its portfolio of consumer packaged goods including pasta, rice, frozen dinners, and snacks. The company leverages an extensive distribution network to deliver over 300 brands that cater to diverse culinary preferences and price points. Its operations span the entire value chain from sourcing raw agricultural commodities to manufacturing and retail distribution.
Analysis
Management Discussion
Despite a slight decline in total revenue from $12.28B in 2023 to $11.61B in 2025, the company demonstrated resilience by achieving a net profit of $1.15B, a substantial recovery from the $347.7M reported in 2024. This performance was supported by strong operating cash flow of $1.69B, indicating effective working capital management and efficient conversion of earnings into cash despite high capital expenditures of $389.3M.
Industry Overview
The U.S. consumer packaged goods industry is highly competitive with low barriers to entry but high loyalty to established brands and distribution channels. Margins are typically pressured by inflationary input costs, forcing companies to focus on operational efficiency and pricing strategies to maintain profitability. Consolidation trends are prevalent as larger players seek economies of scale to outcompete smaller regional manufacturers.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $12.28B | $12.05B | $11.61B |
| Cost of Revenue | $9.01B | $8.72B | $8.61B |
| Gross Profit | $3.26B | $3.33B | $3.00B |
| Operating Expenses | $1.80B | $2.16B | $1.64B |
| Operating Income | $1.46B | $1.18B | $1.36B |
| R&D | $57.7M | $61.4M | $60.8M |
| G&A | $388.9M | $322.2M | $1.54B |
| Stock-Based Comp | $79.2M | $30.8M | $41.5M |
| D&A | $369.9M | $400.9M | $390.2M |
| Depreciation | $313.1M | $347.3M | $336.5M |
| Amortization | $56.8M | $53.6M | $53.7M |
| Other OpEx | $1.35B | $1.77B | $40.8M |
| Non-Operating Income | $-562.3M | $-564.8M | $-208.4M |
| Interest Income | $3.9M | $5.7M | $2.5M |
| Pre-Tax Income | $901.9M | $610.2M | $1.16B |
| Income Tax | $218.7M | $262.5M | $3.7M |
| Continuing Ops | $683.2M | $347.7M | $1.15B |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $683.2M | $347.7M | $1.15B |
| Minority Interest | $-400.0K | $500.0K | $100.0K |
| Net to Common | $683.6M | $347.2M | $1.15B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $3.38B | $3.15B | $3.07B |
| Cash & Equivalents | $93.9M | $77.7M | $68.0M |
| Inventory | $2.23B | $2.08B | $2.05B |
| Prepaid Expenses | $93.7M | $85.0M | $90.6M |
| Other Current Assets | $965.4M | $903.8M | $864.1M |
| Long-Term Assets | $18.67B | $17.71B | $17.86B |
| PP&E (Net) | $2.77B | $2.90B | $2.84B |
| Intangibles | $3.21B | $2.71B | $2.42B |
| Goodwill | $11.18B | $10.58B | $10.50B |
| Operating Leases | — | $176.8M | $209.7M |
| Other LT Assets | $1.51B | $1.35B | $1.89B |
| Total Assets | $22.05B | $20.86B | $20.93B |
| Current Liabilities | $4.44B | $3.24B | $4.32B |
| Accounts Payable | $1.53B | $1.49B | $1.59B |
| Current Debt | $1.52B | $20.3M | $1.03B |
| Current Leases | — | $39.4M | $39.7M |
| Other Current Liab | $1.40B | $1.69B | $1.66B |
| Long-Term Liabilities | $8.80B | $9.11B | $7.68B |
| Long-Term Debt | $7.08B | $7.49B | $6.23B |
| LT Operating Leases | — | $172.2M | $203.3M |
| Other LT Liab | $1.72B | $1.44B | $1.25B |
| Total Liabilities | $13.25B | $12.35B | $12.00B |
| Shareholders' Equity | $8.81B | $8.51B | $8.93B |
| Paid-In Capital | — | $2.36B | $2.35B |
| Retained Earnings | $6.60B | $6.28B | $6.76B |
| AOCI | $-44.4M | $-35.5M | $16.3M |
| Total L&E | $22.05B | $20.86B | $20.93B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $683.2M | $347.7M | $1.15B |
| Non-Cash Adjustments | $226.4M | $1.88B | $673.9M |
| Working Capital Changes | $85.8M | $-212.8M | $-134.5M |
| Cash from Operations | $995.4M | $2.02B | $1.69B |
| Capital Expenditures | $362.2M | $388.1M | $389.3M |
| Cash from Investing | $-354.9M | $-375.0M | $-542.2M |
| Debt Repayments | $712.4M | $1.77B | $281.3M |
| Share Buybacks | $150.0M | — | $64.0M |
| Dividends Paid | $623.8M | $659.3M | $669.2M |
| Cash from Financing | $-631.6M | $-1.66B | $-1.16B |
| FX Effect | $1.7M | $1.2M | $-2.4M |
| Net Change in Cash | $10.6M | $-14.9M | $-11.0M |
| Beginning Cash | $83.3M | $93.3M | $77.7M |
| Ending Cash | $93.9M | $77.7M | $68.0M |
Frequently Asked Questions
How does CONAGRA BRANDS INC. make money?
The company operates primarily through three distinct business segments: Pasta, which is its largest revenue driver featuring brands like Progresso and Barilla; Frozen, encompassing dinner entrees and sides such as Birds Eye and Birds Food Service; and Snacks, including popular brands like Healthy Choice and Oscar Mayer. Additionally, the company generates revenue from its Specialty Foods segment, which includes pantry staples like rice, grains, and beans.
What are the main risks for CAG?
Significant exposure to global agricultural commodity prices, particularly wheat, corn, and soy, which directly impacts cost of revenue and gross margins. Inflationary pressures on input costs and energy expenses could erode profitability if the company cannot pass these costs to consumers. Supply chain disruptions affecting raw material sourcing or logistics could lead to product shortages and inventory valuation issues.
What is CAG's competitive advantage?
Conagra Brands benefits from a highly diversified product portfolio that provides natural hedging against commodity price volatility and single-product failures. The company possesses an unparalleled scale in distribution, granting it significant shelf space leverage with major retailers and efficient logistics networks. Its strong brand equity allows for consistent pricing power and consumer loyalty across multiple categories.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.