Core Viewpoint - Conagra Brands is presenting its First Quarter Fiscal 2026 Earnings, indicating a focus on financial performance and future outlook [1][2]. Group 1: Earnings Presentation - The earnings call is led by key executives including the CEO and CFO, highlighting the importance of leadership in communicating financial results [2][3]. - A live question-and-answer session will follow the prepared remarks, allowing for direct engagement with investors [1]. Group 2: Forward-Looking Statements - The company will make forward-looking statements based on current information, emphasizing the uncertainty and potential variability in achieving projected results [2]. - Risk factors associated with these forward-looking statements are detailed in the company's SEC filings, indicating a commitment to transparency [2]. Group 3: Financial Measures - The discussion will include non-GAAP financial measures, with reconciliations provided in the earnings release and presentation materials, ensuring clarity in financial reporting [3].

Core Insights - Conagra Brands, Inc. (NYSE:CAG) is experiencing challenges due to commodity inflation, particularly in beef, leading to a downward revision of its FY2026 EPS from $1.82 to $1.79, reflecting a 22% year-over-year decline [1][2] - Evercore ISI has reiterated an In Line rating on Conagra while reducing the price target from $24 to $23, which represents a valuation of 12 times the projected 2027 EPS [1][3] Financial Performance - The FY2026 EPS revision indicates a significant decrease, with the new estimate at $1.79 compared to the previous $1.82 [1] - The price target reduction to $23 suggests a slight discount compared to Conagra's five-year average PE ratio of 13x, which has fluctuated between 10x and 16x [3] Market Position and Strategy - Conagra is navigating a year of change, facing rising expenses, potential tariffs, impacts from divesting brands, and investments in pricing and promotional strategies [2] - The company is expected to focus on regaining organic sales growth, particularly in the Frozen and Snacks segments, which account for approximately two-thirds of total sales [3] Company Overview - Conagra Brands operates in the packaged consumer products sector with four main segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice [4]

Group 1 - Conagra Brands, Inc. is recognized as one of the 10 highest dividend-paying stocks in the S&P 500, appealing to income-focused investors [1] - The company operates in the packaged foods sector, offering products under well-known brands such as Hunt's, Orville Redenbacher's, and Slim Jim [2] - Conagra has faced challenges with declining revenue over the past two fiscal years, leading to analysts reducing their stock targets following disappointing revenue and earnings results [3] Group 2 - Despite recent struggles, Conagra has a strong dividend history, having paid quarterly dividends since January 1976, with a current payout of $0.35 per share [4] - The stock boasts a dividend yield of 7.70% as of September 27, making it attractive for income investors [4] - The company's fiscal 2026 guidance indicates expectations for flat organic sales and profits that may fall short of market expectations, with a projected payout ratio of 79% [3]

Core Insights - Conagra Brands, Inc. reported earnings per share of $0.39, exceeding the estimated $0.33, with revenue of approximately $2.63 billion, surpassing the estimated $2.62 billion [1][3] Financial Performance - The company achieved a 5.8% decrease in net sales but managed to surpass Wall Street's expectations for first-quarter sales due to strong demand for pantry staples [2][4] - Conagra's price-to-earnings (P/E) ratio is 7.60, indicating a relatively low valuation compared to its earnings, while the price-to-sales ratio is 0.75 [4] - The enterprise value to sales ratio is 1.46, and the enterprise value to operating cash flow ratio is 10.05, reflecting the company's valuation relative to its sales and operating cash flow [5] Strategic Execution - Conagra has made progress in top-line performance and strategic execution, achieving key supply chain objectives and reducing net debt [2][4] - CEO Sean Connolly emphasized disciplined execution and balanced capital allocation as key factors in the company's performance [4] Market Position - Conagra is a significant player in the packaged foods industry, competing with major companies like General Mills and Kraft Heinz [3]

Core Insights - Conagra Brands Inc. reported first-quarter fiscal 2026 results that exceeded Wall Street expectations but showed year-over-year declines in key metrics [1][2] Financial Performance - The company achieved net sales of $2.63 billion, a decrease of 5.8% compared to the prior-year period, while adjusted earnings per share were 39 cents, down 26.4% [2] - Wall Street analysts had anticipated net sales of $2.62 billion and earnings of 33 cents per share [3] Sales Breakdown - The decline in net sales was attributed to a 5.1% impact from mergers and acquisitions, a 0.6% drop in organic sales, and a minor 0.1% foreign exchange effect [3] - Within organic sales, a 0.6% price/mix benefit was more than offset by a 1.2% decline in volume [4] Segment Performance - Grocery & Snacks revenue fell 8.7% to $1.1 billion, with a 1.0% decline in organic net sales [6] - Refrigerated & Frozen sales decreased 0.9% to $1.1 billion, but organic net sales rose 0.2% due to a 0.5% increase in volume [6] - International segment revenue declined 18% to $212 million, with organic net sales down 3.5% [7] - Foodservice sales dipped 0.8% to $264 million, while organic net sales rose 0.2% [7] Cash Position - Conagra reported cash and cash equivalents of $698.1 million at the end of the first quarter of fiscal 2026 [4] Management Commentary - The CEO highlighted successful supply chain objectives and a focus on disciplined execution amid ongoing inflationary pressures and cautious consumer sentiment [5] Outlook - For fiscal 2026, the company reaffirmed guidance, projecting organic net sales growth between -1% and 1%, an adjusted operating margin of 11.0%–11.5%, and adjusted EPS of $1.70–$1.85 [8]

Core Insights - Conagra Brands reported revenue of $2.63 billion for the quarter ended August 2025, a decrease of 5.8% year-over-year, with EPS at $0.39 compared to $0.53 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.61 billion by 0.89%, while the EPS surpassed the consensus estimate of $0.33 by 18.18% [1] Financial Performance Metrics - Net Sales growth in Grocery & Snacks was -8.7%, better than the average estimate of -10.1% [4] - Net Sales growth in Refrigerated & Frozen was -0.9%, compared to the average estimate of -3.6% [4] - Price/Mix for Foodservice increased by 3.8%, exceeding the average estimate of 2% [4] - Organic Volume for Foodservice decreased by -3.6%, slightly worse than the average estimate of -3.3% [4] - Price/Mix for International was 1.7%, below the average estimate of 3.1% [4] - Organic Volume for International declined by -5.2%, worse than the average estimate of -2.9% [4] - Net Sales growth for International was -18%, significantly worse than the average estimate of -9.7% [4] - Net Sales growth for Foodservice was -0.8%, better than the average estimate of -1.3% [4] Sales Breakdown - Sales in Grocery & Snacks amounted to $1.08 billion, slightly above the average estimate of $1.06 billion, reflecting a year-over-year decline of -8.7% [4] - Sales in Foodservice were $264.5 million, exceeding the average estimate of $263.17 million, with a year-over-year change of -0.8% [4] - Sales in International reached $212.3 million, below the average estimate of $238.18 million, representing a year-over-year decline of -18.1% [4] - Sales in Refrigerated & Frozen were $1.08 billion, surpassing the average estimate of $1.05 billion, with a year-over-year change of -0.9% [4]

Financial Data and Key Metrics Changes - The fiscal first quarter results exceeded expectations, with a net debt reduction of over $400 million compared to the previous year [30] - The company is on track to pay down $700 million in debt for fiscal 2026, supported by divestitures and cash flow from operations [27][30] - Overall inflation guidance remains slightly above 7%, with core inflation pressures primarily from animal proteins [20][96] Business Line Data and Key Metrics Changes - Frozen business is expected to regain momentum after service interruptions, with innovations like Dolly Parton frozen meals performing well [41][42] - The company experienced a shift in promotional events, impacting sales timing, but anticipates a return to growth in frozen and snacks categories [7][14] - The company reported a 3% growth in frozen business in Q2 of the previous year, indicating potential for recovery [39] Market Data and Key Metrics Changes - The company noted a low single-digit decline in consumption trends for the second quarter, attributed to timing shifts in promotional events [5][6] - Retailers are returning to pre-COVID promotional levels, which is expected to support volume growth [81] Company Strategy and Development Direction - The company is focusing on driving volume in frozen and snacks while maximizing cash through inflation-justified pricing [8][68] - There is an emphasis on innovation and marketing to attract value-seeking consumers, particularly in lower-income demographics [76][78] - The company plans to leverage technology, including AI, to enhance core processes and lower costs [57] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the second half of the fiscal year, expecting positive sales growth driven by volume momentum and effective pricing strategies [7][15][68] - The company acknowledges ongoing inflation and value-seeking behavior among consumers but believes it can navigate these challenges effectively [76][70] Other Important Information - The company has achieved service levels of 98%, which is crucial for restoring consumer confidence and merchandising activities [14][67] - The company is about 85% covered for Q2 in terms of commodity pricing, with a focus on managing exposure to animal proteins [23] Q&A Session Summary Question: What is driving the expected inflection in sales growth for the second half? - Management attributes the expected growth to volume momentum in frozen products and successful pricing strategies [7][8] Question: How much did trade expense timing benefit organic sales growth in Q1? - The benefit from trade expense timing was approximately 50 basis points in Q1, which will flip to Q2 [12] Question: What is the outlook for frozen entrees given recent share loss? - Management remains positive about the frozen business outlook, citing strong innovation and recovery from supply interruptions [39][42] Question: How is the company addressing inflation and pricing elasticity? - The company tracks elasticities weekly and has built in historical expectations, indicating confidence in managing pricing without significant volume loss [71][100] Question: What are the expectations for promotional levels and volume share performance? - Promotional levels are returning to pre-COVID norms, and the company is cautiously optimistic about improving volume share performance [81][84]

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Market Overview - U.S. stocks traded lower with the Dow Jones falling approximately 0.1% as the federal government entered a shutdown due to Congress's failure to agree on a spending plan [1] - The Dow traded down 0.08% to 46,360.72, NASDAQ fell 0.36% to 22,577.49, and S&P 500 dropped 0.29% to 6,669.38 [1] Sector Performance - Health care shares increased by 0.9% on Wednesday, while communication services stocks decreased by 1.2% [2] Company Earnings - Conagra Brands Inc reported better-than-expected earnings for Q1, posting earnings of 39 cents per share, surpassing the analyst consensus estimate of 33 cents per share [3] - The company also reported quarterly sales of $2.633 billion, exceeding the analyst consensus estimate of $2.615 billion [3] - Conagra Brands affirmed FY2026 adjusted earnings guidance of $1.70 to $1.85 per share [3] Stock Movements - Chijet Motor Company, Inc. shares surged 173% to $0.4432 after entering an MOU for a private placement offering of up to $1 billion [8] - Ryvyl Inc. shares increased 60% to $0.4708 following a $75 million merger agreement with RTB Digital [8] - Healthcare Triangle, Inc. shares rose 25% to $3.27 after its QuantumNexis EMR platform surpassed $20 million in processed revenue [8] - Cheer Holding, Inc. shares dropped 72% to $0.1876 after announcing an $8.5 million offering [8] - Reitar Logtech Holdings Limited shares fell 35% to $4.60, and Clean Energy Technologies, Inc. shares decreased 29% to $0.2033 after a reverse stock split announcement [8] Economic Indicators - U.S. private businesses cut 32,000 jobs in September, contrasting with market estimates of a 50,000 gain [10] - The volume of mortgage applications in the U.S. declined by 12.7% in the week ending Sept. 26 [10]

Core Insights - Conagra Brands (CAG) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, but down from $0.53 per share a year ago, indicating an earnings surprise of +18.18% [1] - The company generated revenues of $2.63 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.89%, but down from $2.79 billion year-over-year [2] - Conagra Brands has underperformed the market, with shares down approximately 34% year-to-date compared to the S&P 500's gain of 13.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.46 on revenues of $3.01 billion, and for the current fiscal year, it is $1.73 on revenues of $11.25 billion [7] - The estimate revisions trend for Conagra Brands was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Food - Miscellaneous industry, to which Conagra Brands belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Conagra's stock performance [5]