Investing.com -- Shares of Conagra Brands, Inc. (NYSE: NYSE: CAG ) declined 3% following the company's updated fiscal 2025 guidance, which highlighted temporary service constraints and the impact of foreign exchange rates. The announcement was made ahead of Conagra's presentation at the annual Consumer Analyst Group of New York (CAGNY) Conference.

The Chicago-based food company noted that its long-term financial targets remain unchanged despite the adjustment in guidance. However, Conagra is now expecting organic net sales growth to be around -2.0% compared to the previous fiscal year, a downward revision from the earlier forecast of near the midpoint of -1.5% to flat. Adjusted operating margin is anticipated to be approximately 14.4%, down from the previous estimate of 14.8%, and adjusted earnings per share (EPS) are projected to be around $2.35, a decrease from the prior guidance of $2.45 to $2.50. The net leverage ratio is also expected to increase slightly to around 3.55x.

Conagra's President and CEO, Sean Connolly, stated, "We are committed to investing behind our brands and innovation, and delivering the high-quality products our customers expect. 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."

The updated guidance reflects difficulties faced in the third quarter, including supply constraints affecting frozen meals containing chicken and frozen vegetables. The company has experienced manufacturing challenges at the primary facility for preparing and cooking chicken, leading to temporary production halts and a slower restart to ensure product quality. Similarly, higher-than-anticipated demand for frozen vegetables resulted in depleted inventories and out-of-stocks, prompting the company to reduce merchandising efforts to rebuild inventories.

Despite these setbacks, Conagra's capital expenditures, free cash flow conversion, interest expense, Ardent Mills' contribution, pension income, adjusted effective tax rate, and inflation expectations remain consistent with the second quarter earnings materials. The company also highlighted that it has not factored any potential impacts from new tariffs into its updated guidance.

Conagra's presentation at the CAGNY Conference is scheduled for February 18 at 9:00 a.m. ET, where further details of the updated fiscal 2025 financial guidance will be discussed. The company's focus on innovation and brand investment is expected to be a key theme, along with its strategic approach to navigating the evolving consumer environment.

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