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Conagra (CAG) Down 1.7% Since Earnings Report: Can It Rebound?
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It has been more than a month since the last earnings report for Conagra Brands Inc. (CAG - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
In the fiscal first quarter, Conagra’s quarterly earnings from continuing operations came in at 46 cents, comfortably surpassing the Zacks Consensus Estimate of 41 cents. The bottom line also came in 17.9% higher than the year-ago tally.
Revenues
Conagra generated net revenues of $1,804.2 million in the reported quarter, handily outpacing the Zacks Consensus Estimate of $1,787 million.
However, the top line came in 4.8% lower than the prior-year figure. Notably, organic sales during the reported quarter dipped 3%. The company noted that increased slotting dues associated with innovation launches hurt revenues during the quarter.
Segmental Details
Grocery & Snacks: The segment’s quarterly sales came in at $745.8 million, down 1.5% year over year.
Refrigerated & Frozen: Quarterly revenues inched up 1.8% year over year to $615.7 million.
International: Sales of the segment came in at $190.9 million, down 2% year over year.
Foodservice: The segment’s quarterly revenues were $251.8 million, down 6.1% year over year.
Commercial: The company did not generate sales from this segment during the quarter. The segment used to include sales generated from the J.W. Swank and Spicetec Flavors & Seasonings businesses. Conagra divested both businesses in July 2016.
Other Financial Fundamentals
Conagra’s cost of goods sold dropped 4.9% year over year to $1,285.2 million. Selling, general and administrative (SG&A) expenses increased 3.2% year over year to $239 million. Interest expenses plummeted 37.5% to $36.4 million due to lower debt levels.
Adjusted gross profit expanded 20 basis points (bps) to 29.2% during the quarter.
Conagra exited the fiscal first quarter with cash and cash equivalents of $251.4 million, flat with the tally recorded at the end of fiscal 2016. Senior long-term debt (excluding current portion) was $2,571.1 million, down from $2,573.3 million as of May 28, 2017.
In the first three months of fiscal 2017, Conagra generated net cash of $136 million from its operating activities, down from $325.9 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $42.6 million, down 26.7% year over year.
During the reported quarter, Conagra repurchased nearly 9 million of common stock against $300 million.
Outlook
Conagra is poised to grow on the back of robust innovation, ongoing volume strategy and increased sales. The company reaffirmed its earnings guidance range within 1.84-$1.89 per share for fiscal 2018. It plans to buyback roughly $1.1 billion worth shares of its common stock in fiscal 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, Conagra's stock has an average Growth Score of C, however its Momentum is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Conagra (CAG) Down 1.7% Since Earnings Report: Can It Rebound?
It has been more than a month since the last earnings report for Conagra Brands Inc. (CAG - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First-Quarter Fiscal 2018 Results
Conagra reported better-than-expected first-quarter fiscal 2018 (ended Aug 27, 2017) results.
Earnings
In the fiscal first quarter, Conagra’s quarterly earnings from continuing operations came in at 46 cents, comfortably surpassing the Zacks Consensus Estimate of 41 cents. The bottom line also came in 17.9% higher than the year-ago tally.
Revenues
Conagra generated net revenues of $1,804.2 million in the reported quarter, handily outpacing the Zacks Consensus Estimate of $1,787 million.
However, the top line came in 4.8% lower than the prior-year figure. Notably, organic sales during the reported quarter dipped 3%. The company noted that increased slotting dues associated with innovation launches hurt revenues during the quarter.
Segmental Details
Grocery & Snacks: The segment’s quarterly sales came in at $745.8 million, down 1.5% year over year.
Refrigerated & Frozen: Quarterly revenues inched up 1.8% year over year to $615.7 million.
International: Sales of the segment came in at $190.9 million, down 2% year over year.
Foodservice: The segment’s quarterly revenues were $251.8 million, down 6.1% year over year.
Commercial: The company did not generate sales from this segment during the quarter. The segment used to include sales generated from the J.W. Swank and Spicetec Flavors & Seasonings businesses. Conagra divested both businesses in July 2016.
Other Financial Fundamentals
Conagra’s cost of goods sold dropped 4.9% year over year to $1,285.2 million. Selling, general and administrative (SG&A) expenses increased 3.2% year over year to $239 million. Interest expenses plummeted 37.5% to $36.4 million due to lower debt levels.
Adjusted gross profit expanded 20 basis points (bps) to 29.2% during the quarter.
Conagra exited the fiscal first quarter with cash and cash equivalents of $251.4 million, flat with the tally recorded at the end of fiscal 2016. Senior long-term debt (excluding current portion) was $2,571.1 million, down from $2,573.3 million as of May 28, 2017.
In the first three months of fiscal 2017, Conagra generated net cash of $136 million from its operating activities, down from $325.9 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $42.6 million, down 26.7% year over year.
During the reported quarter, Conagra repurchased nearly 9 million of common stock against $300 million.
Outlook
Conagra is poised to grow on the back of robust innovation, ongoing volume strategy and increased sales. The company reaffirmed its earnings guidance range within 1.84-$1.89 per share for fiscal 2018. It plans to buyback roughly $1.1 billion worth shares of its common stock in fiscal 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Conagra Brands Inc. Price and Consensus
Conagra Brands Inc. Price and Consensus | Conagra Brands Inc. Quote
VGM Scores
At this time, Conagra's stock has an average Growth Score of C, however its Momentum is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.