What Will Conagra Brands Divest Next?

After selling off its Chef Boyardee, Van De Camp’s and Mrs. Paul’s businesses earlier this year, Conagra Brands may have more divestitures in store. Sean Connolly, chief executive of the Chicago-based food conglomerate, hinted Thursday that certain other brands in its grocery stable may be on the chopping block.

“We’re certainly not flat footed there, as we’ve done more divestitures than most people in our space over the last decade,” Connolly told analysts during an earnings call.

The company’s portfolio reshaping efforts to date have strategically shifted its mix more towards frozen foods and snacks, which Connolly said now represent roughly 70% of Conagra’s retail sales and continue to present significant growth opportunities. Its grocery business currently comprises Vlasic pickles, Hunt’s canned tomatoes, Pam cooking sprays and Reddi-wip dessert toppings.

In May, Conagra announced it was selling its Chef Boyardee canned pasta business to Brynwood Partners-owned Hometown Food Company for $600 million in cash. About a month later, the company said it was moving its Van de Kamp’s and Mrs. Paul’s frozen seafood brands to co-manufacturer High Liner Foods in a $55 million cash deal.

“Those were businesses that were not part of our strategic growth areas,” Connolly said. “That’s been our strategy for some time. There are probably other candidates that I won’t get into on this call that we can look at as exit candidates in that grocery business over time, but smartly and methodically, because those businesses also do play an important role in the portfolio by throwing off cash, absorbing a lot of overhead and funding a lot of the investments we make in the growth business.”

Inflation and supply chain constraints, compounded by declining consumer demand, challenged the company in its fourth quarter, driving net sales down 4.3% to $2.8 billion, Connolly said. The company said it gained volume share in frozen desserts, microwave popcorn, refrigerated whipped topping and pudding.

Net income in the quarter was $256 million, which compared to a loss of $567.2 million in the prior-year period. For the full year, net sales were down 3.6% to $11.6 billion, and net income advanced 231.4% to $1.15 billion.

Looking ahead, management anticipates the continued impacts of persistent inflation and tempered consumer sentiment, as well as the current tariff environment, which is expected to add approximately 3% to cost of goods sold, or more than $200 million annually.

“Our canned food products make up the largest tariff exposure as steel and aluminum tariffs significantly increase the cost to procure tin plate steel as domestic supply is very limited,” Dave Marberger, CFO of Conagra, said during the earnings call. “In addition, tariffs on our low level of imports from China and other countries impact items such as palm oil, cocoa, and other inputs.”

For fiscal 2026, the company is expecting to deliver organic net sales growth of -1% to 1% compared to fiscal 2025 and adjusted earnings per share between $1.70 and $1.85, a decrease from $2.30 in fiscal 2025.

Shares of Conagra Brands fell 4.4% to close at $19.49 on Thursday.