It has been about a month since the last earnings report for Conagra Brands (CAG Quick QuoteCAG - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Conagra Brands due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Conagra Brands before we dive into how investors and analysts have reacted as of late.

Conagra Q1 Earnings & Revenues Beat Estimates on Lower SG&A

Conagra reported first-quarter fiscal 2027 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales decreased, earnings increased from the year-ago period’s actuals.

Conagra Brands’ adjusted earnings per share (EPS) for the quarter were 41 cents, beating the Zacks Consensus Estimate of 31 cents. The bottom line increased 5.1% year over year.

Net sales fell 1.4% to $2,595.9 million, slightly exceeding the Zacks Consensus Estimate of $2,595 million. Reported sales included a 0.2% favorable foreign-exchange impact and a 0.5% drag from M&A. 

Organic net sales declined 1.1%, as a 2.1% volume drop more than offset a 1% price/mix benefit. The company gained dollar share in frozen vegetables, pudding, chili, frozen breakfast, hot dogs and frozen desserts. We anticipated volumes to fall 2.4% while expecting a 1.2% pricing gain. 

Adjusted gross profit decreased 3.9% to $618.6 million, while adjusted gross margin contracted 62 basis points to 23.8%. Higher productivity and about $4 million of tariff refunds were more than offset by cost-of-goods-sold inflation, lower organic sales and unfavorable operating leverage. Our model projected adjusted gross margin contraction of about 100 basis points to 23.4%. 

Adjusted SG&A declined 3.7% to $320.7 million, including a $10 million benefit tied to fiscal 2026 incentive compensation. Advertising and promotional spending increased 15.1% to $60.9 million. Adjusted EBITDA increased 2.4% to $451.4 million.

Decoding CAG’s Segmental Performance

Grocery & Snacks: Net sales declined 2.6% to $1,051.1 million, while organic sales fell 2%. A 3.4% increase in price/mix was outweighed by a 5.4% volume decline. Adjusted operating profit decreased 7.2% to $204.9 million.

Refrigerated & Frozen: Net sales fell 2.1% to $1,053.8 million, with organic sales down 1.6%. Price/mix declined 1.5% and volume slipped 0.1%. Adjusted operating profit dropped 13% to $99.6 million as inflation, operating leverage and higher advertising investment offset productivity gains.

International: Sales increased 2.7% to $218.1 million, helped by foreign exchange, while organic sales rose 0.9%. Price/mix advanced 1.6%, partly offset by a 0.7% volume decline. Adjusted operating profit fell 8.6% to $34.4 million.

Foodservice: Net sales grew 3.2% to $272.9 million, while organic sales increased 3.3%. Volume rose 2.5%, including an approximately 150-basis-point benefit from customer-order timing, and price/mix gained 0.8%. Adjusted operating profit increased 11.4% to $30.9 million.

CAG’s Financial Health

Net cash used in operating activities was $4.2 million. Capital expenditures totaled $123.7 million, resulting in negative free cash flow of $127.9 million.

CAG ended the quarter with net debt of $7,388.5 million, down 2.5% year over year. The net leverage ratio was 3.99. The company also paid $167.5 million in dividends during the quarter.

What to Expect From CAG in FY27?

Management reaffirmed its fiscal 2027 outlook for an organic net sales decline of 1-3%, an adjusted operating margin of 10-10.5% and adjusted earnings of $1.40-$1.50 per share.

The guidance continues to assume equity earnings of about $140 million and free cash flow conversion above 90%.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -12.78% due to these changes.

VGM Scores

Currently, Conagra Brands has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the second quintile 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Conagra Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Conagra Brands is part of the Zacks Food - Miscellaneous industry. Over the past month, General Mills (GIS Quick QuoteGIS - Free Report) , a stock from the same industry, has gained 5.2%. The company reported its results for the quarter ended August 2026 more than a month ago.

General Mills reported revenues of $4.39 billion in the last reported quarter, representing a year-over-year change of -2.8%. EPS of $0.75 for the same period compares with $0.86 a year ago.

General Mills is expected to post earnings of $0.96 per share for the current quarter, representing a year-over-year change of -12.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.

General Mills has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.