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Conagra Brands (CAG) Readies for Q3 Earnings: Is a Beat Likely?
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Conagra Brands, Inc. (CAG - Free Report) is likely to register a top-and-bottom-line decline when it reports third-quarter fiscal 2024 earnings on Apr 4. The Zacks Consensus Estimate for revenues is pegged at $3.01 billion, which suggests a decrease of 2.4% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 63 cents per share. This indicates a decline of 17.1% from the year-ago quarter’s reported figure. CAG has a trailing four-quarter earnings surprise of 9.5%, on average.
Factors to Note
Conagra continues to be driven by innovation and brand-building, witnessing considerable market share gains in the frozen category. On its second-quarter fiscal 2024 earnings call, management stated that fiscal 2024 represents Conagra’s biggest innovation slate till now. The targeted investments made during the second quarter, focusing on re-engaging consumers with existing products and introducing them to new innovations, give the company confidence in driving momentum through multifaceted brand-building investments in the second half of the year.
The strength of the frozen category reflects the forte of CAG’s brands and the effective execution of the Conagra Way playbook. Though volumes in the frozen business continued to be hit by changing consumer behavior in the second quarter, the trend has been improving. Conagra made several investments in the key brands of the frozen business during the second quarter, which yielded a favorable response. These trends bode well for the quarter under review.
However, volumes have been sluggish due to an industry-wide slowdown in consumption. Also, the company has been battling cost inflation, which is impacting its margins. Management expects the net cost of goods sold inflation of nearly 3% in fiscal 2024. Conagra is focused on ramping up brand-building investments in the second half of fiscal 2024. It expects A&P spending in the second half to increase about 20% compared with the first half.
Anticipations of slow volume recovery and increased brand investments prompted management to cut its fiscal 2024 view for organic sales, operating profit and earnings in its second-quarter earnings release, which raises concerns for the third quarter as well. Our model suggests a volume decline of 1.6% for the third quarter.
Additionally, we expect the price/mix to be down 0.7% in the quarter under review. The current industry dynamics, together with the planned second-half investments, are likely to lead the second-half price/mix to be lower from the year-ago period level.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Conagra this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Conagra has an Earnings ESP of +0.58% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies worth considering as our model shows that these also have the correct combination to beat on earnings this time:
The Hershey Company (HSY - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. The company is likely to witness top-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for Hershey’s quarterly revenues is pegged at $3.12 billion, which suggests a rise of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hershey’s quarterly EPS has declined by 2 cents in the past 30 days to $2.72, which suggests a decrease of 8.1% from the year-ago quarter’s level. HSY has a trailing four-quarter earnings surprise of 6.5%, on average.
Newell Brands (NWL - Free Report) currently has an Earnings ESP of +10.71% and a Zacks Rank #3. The company is likely to register a top-and-bottom-line decline when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Newell’s quarterly revenues is pegged at $1.64 billion, which calls for a drop of 8.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Newell’s bottom line stands at a loss of 7 cents, which suggests a decrease of 16.7% from the year-ago quarter’s loss of 6 cents. HSY has a trailing four-quarter earnings surprise of 33.4%, on average.
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Image: Bigstock
Conagra Brands (CAG) Readies for Q3 Earnings: Is a Beat Likely?
Conagra Brands, Inc. (CAG - Free Report) is likely to register a top-and-bottom-line decline when it reports third-quarter fiscal 2024 earnings on Apr 4. The Zacks Consensus Estimate for revenues is pegged at $3.01 billion, which suggests a decrease of 2.4% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 63 cents per share. This indicates a decline of 17.1% from the year-ago quarter’s reported figure. CAG has a trailing four-quarter earnings surprise of 9.5%, on average.
Factors to Note
Conagra continues to be driven by innovation and brand-building, witnessing considerable market share gains in the frozen category. On its second-quarter fiscal 2024 earnings call, management stated that fiscal 2024 represents Conagra’s biggest innovation slate till now. The targeted investments made during the second quarter, focusing on re-engaging consumers with existing products and introducing them to new innovations, give the company confidence in driving momentum through multifaceted brand-building investments in the second half of the year.
Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote
The strength of the frozen category reflects the forte of CAG’s brands and the effective execution of the Conagra Way playbook. Though volumes in the frozen business continued to be hit by changing consumer behavior in the second quarter, the trend has been improving. Conagra made several investments in the key brands of the frozen business during the second quarter, which yielded a favorable response. These trends bode well for the quarter under review.
However, volumes have been sluggish due to an industry-wide slowdown in consumption. Also, the company has been battling cost inflation, which is impacting its margins. Management expects the net cost of goods sold inflation of nearly 3% in fiscal 2024. Conagra is focused on ramping up brand-building investments in the second half of fiscal 2024. It expects A&P spending in the second half to increase about 20% compared with the first half.
Anticipations of slow volume recovery and increased brand investments prompted management to cut its fiscal 2024 view for organic sales, operating profit and earnings in its second-quarter earnings release, which raises concerns for the third quarter as well. Our model suggests a volume decline of 1.6% for the third quarter.
Additionally, we expect the price/mix to be down 0.7% in the quarter under review. The current industry dynamics, together with the planned second-half investments, are likely to lead the second-half price/mix to be lower from the year-ago period level.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Conagra this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Conagra has an Earnings ESP of +0.58% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies worth considering as our model shows that these also have the correct combination to beat on earnings this time:
The Hershey Company (HSY - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #3. The company is likely to witness top-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for Hershey’s quarterly revenues is pegged at $3.12 billion, which suggests a rise of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hershey’s quarterly EPS has declined by 2 cents in the past 30 days to $2.72, which suggests a decrease of 8.1% from the year-ago quarter’s level. HSY has a trailing four-quarter earnings surprise of 6.5%, on average.
Newell Brands (NWL - Free Report) currently has an Earnings ESP of +10.71% and a Zacks Rank #3. The company is likely to register a top-and-bottom-line decline when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Newell’s quarterly revenues is pegged at $1.64 billion, which calls for a drop of 8.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Newell’s bottom line stands at a loss of 7 cents, which suggests a decrease of 16.7% from the year-ago quarter’s loss of 6 cents. HSY has a trailing four-quarter earnings surprise of 33.4%, on average.
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 3. The company is likely to register top-line and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, which implies growth of 4.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.