Core Insights - Conagra Brands, Inc. (CAG) reported third-quarter fiscal 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, showing year-over-year declines in both metrics [1][2][3] Financial Performance - Adjusted earnings per share (EPS) were 51 cents, missing the estimate of 52 cents, and reflecting a 26.1% year-over-year decline due to reduced adjusted gross profit [3] - Net sales totaled $2,841 million, down 6.3% year over year, and also missing the consensus estimate of $2,889 million, attributed to a decrease in organic net sales, adverse currency movements, and M&A impacts [4][5] - Organic net sales decreased by 5.2% year over year, driven by a 2.1% negative impact from price/mix and a 3.1% decline in volume [5] - Adjusted gross profit fell 19.1% year over year to $704 million, with adjusted gross margin contracting by 389 basis points to 24.8% [6] Segment Performance - Grocery & Snacks segment reported net sales of $1,245.4 million, down 3.2% year over year, with organic sales declining 3.9% [8] - Refrigerated & Frozen segment saw net sales decrease by 7.2% year over year to $1,115.6 million, impacted by supply constraints [9] - International segment's net sales dropped 17.6% year over year to $223.9 million, with M&A and currency effects negatively impacting sales [10] - Foodservice segment reported a 6.1% decline in sales to $256.1 million, with organic sales falling 6.3% [11] Financial Health - At the end of the quarter, the company had cash and cash equivalents of $49.4 million, long-term debt of $6,236.8 million, and total stockholders' equity of $8,779.1 million [13] - Conagra generated $1,346.2 million in net cash flows from operating activities in the first three quarters of fiscal 2025, with capital expenditures of $304.2 million [13] Future Outlook - For fiscal 2025, Conagra expects a 2% decline in organic net sales growth, with an adjusted operating margin projected at 14.4% and adjusted earnings forecasted at $2.35 per share, down from $2.67 in fiscal 2024 [14]

Core Insights - Conagra Brands reported revenue of $2.84 billion for the quarter ended February 2025, a decrease of 6.3% year-over-year, and EPS of $0.51, down from $0.69 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $2.89 billion, resulting in a surprise of -1.67%, while the EPS also missed the consensus estimate of $0.52 by -1.92% [1] Financial Performance Metrics - Price/Mix for Grocery and Snacks decreased by 2.6%, worse than the estimated -1.3% [4] - Price/Mix for Foodservice increased by 3.7%, exceeding the estimated 2.4% [4] - Organic Volume for Foodservice declined by 10%, significantly worse than the estimated -2.1% [4] - Price/Mix for International increased by 4.4%, surpassing the estimated 1.4% [4] - Organic Volume for International decreased by 5.6%, worse than the estimated -0.3% [4] - Price/Mix for Refrigerated and Frozen decreased by 4.2%, compared to the estimated -3% [4] - Organic Volume for Refrigerated and Frozen declined by 3%, worse than the estimated -2.3% [4] - Organic Volume for Grocery and Snacks decreased by 1.3%, compared to the estimated 0.5% [4] Sales Performance - Sales for Grocery & Snacks were reported at $1.25 billion, below the estimated $1.29 billion, representing a year-over-year decline of 3.2% [4] - Sales for Foodservice were $256.10 million, compared to the average estimate of $273.70 million, reflecting a year-over-year change of -6.1% [4] - Sales for International were $223.90 million, below the estimated $242.41 million, indicating a year-over-year decline of 17.6% [4] - Sales for Refrigerated & Frozen were reported at $1.12 billion, slightly below the estimated $1.14 billion, representing a year-over-year decline of 7.2% [4] Stock Performance - Conagra Brands' shares returned +3.9% over the past month, contrasting with the Zacks S&P 500 composite's -4.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Performance - Conagra Brands reported quarterly earnings of $0.51 per share, missing the Zacks Consensus Estimate of $0.52 per share, and down from $0.69 per share a year ago, representing an earnings surprise of -1.92% [1] - The company posted revenues of $2.84 billion for the quarter ended February 2025, missing the Zacks Consensus Estimate by 1.67%, and down from $3.03 billion year-over-year [2] - Over the last four quarters, Conagra Brands has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance and Outlook - Conagra Brands shares have declined approximately 4.9% since the beginning of the year, compared to a decline of -3.6% for the S&P 500 [3] - The current consensus EPS estimate for the coming quarter is $0.59 on revenues of $2.86 billion, and for the current fiscal year, it is $2.36 on revenues of $11.74 billion [7] Industry Context - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 21% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Data and Key Metrics Changes - The company reported a free cash flow conversion of 125% and has paid down $500 million in debt over the last 12 months [27][28] - Inflation for the quarter came in at around 4%, consistent with expectations for the full year [71][73] Business Line Data and Key Metrics Changes - Snack volumes increased by 4% in Q3, contrasting with broader industry trends, attributed to a focus on healthier snacking options [107][111] - The gap between shipments and consumption in grocery and snacks was primarily due to seasonal shipment timing differences [14][20] Market Data and Key Metrics Changes - The company noted challenges in the convenience store channel, which has seen weaker performance due to stretched consumer budgets [22][86] - Consumption trends remain strong overall, despite some channel-specific weaknesses [21][88] Company Strategy and Development Direction - The company is prioritizing returning volume to growth over gross margin expansion, focusing on maintaining strong consumer relationships [64][66] - Ongoing modernization efforts in the supply chain are expected to enhance operational efficiency [35][37] Management's Comments on Operating Environment and Future Outlook - Management highlighted the dynamic macro environment, with ongoing monitoring of inflation, tariffs, and consumer sentiment impacting future guidance [12][45] - The company anticipates continued strong consumption in Q4, with improvements in shipment volumes expected [48][101] Other Important Information - The company is actively monitoring state-level legislation regarding food additives, but most of its portfolio does not contain synthetic dyes, minimizing potential impacts [92][93] - Capital expenditure guidance was lowered by $40 million for the current year, primarily due to timing rather than project cuts [29][31] Q&A Session Summary Question: Insights on fiscal 26 guidance and macro dynamics - Management indicated that it is too early to provide guidance for fiscal 26, emphasizing the need to monitor external factors [10][12] Question: Gap between shipments and consumption in grocery - The gap was attributed to seasonal shipment timing, with no significant underlying issues affecting overall consumption [14][20] Question: Confidence in hitting leverage targets - The company expressed confidence in cash flow performance and debt reduction, with updates expected in July [26][28] Question: Impact of convenience store performance - Management acknowledged challenges in the convenience store channel but noted strong overall consumption across other channels [22][21] Question: Expectations for inflation and pricing strategies - The company is assessing various levers to manage costs, including productivity programs and alternative suppliers [75][73] Question: Changes in consumer behavior - Management noted ongoing value-seeking behavior among consumers, which has been a trend for the past two years [86][88] Question: Impact of state-level legislation on additives - The company is monitoring state-level legislation but indicated that most of its products are not affected due to the absence of synthetic dyes [92][93]

FY25 Q3 Earnings Presentation April 3, 2025 1 Legal Disclosure 3 Key Messages Note on Forward-Looking Statements This document contains forward-looking statements within the meaning of the federal securities laws. Examples of forward-looking statements include statements regarding the company's expected future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. You can ident ...

Financial Performance - Net sales decreased 6.3% to $2.8 billion, with organic net sales down 5.2% driven by a 2.1% negative impact from price/mix and a 3.1% decrease in volume[5]. - Gross profit decreased 17.3% to $710 million, and adjusted gross profit decreased 19.1% to $704 million due to lower net sales and inflation in cost of goods sold[6]. - Reported diluted earnings per share (EPS) was $0.30, a 53.1% decrease, while adjusted EPS was $0.51, a 26.1% decrease[6]. - Net income attributable to Conagra Brands decreased 53.0% to $145 million, or $0.30 per diluted share, compared to $309 million, or $0.64 per diluted share in the prior year[11]. - Year-to-date net sales were $8,831.0 million, a decline of 3.4% from $9,145.0 million in the same period last year[53]. - Year-to-date net income attributable to Conagra Brands, Inc. was $896.4 million, down 2.0% from $914.5 million year-over-year[53]. - Adjusted net income for Q3 FY25 was $242.1 million, with diluted EPS of $0.51, down 26.3% compared to the previous year[59]. - Net income for the thirty-nine weeks ended February 23, 2025, was $896.5 million, down from $914.9 million, reflecting a decrease of about 2.6%[55]. Cash Flow and Debt - Free cash flow decreased by $180 million to $1.0 billion, with capital expenditures at $304 million compared to $310 million in the prior year[25]. - The company ended the quarter with net debt of $8.1 billion, representing a 5.9% reduction in net debt versus the prior year period[28]. - Cash and cash equivalents at the end of the period decreased to $49.4 million from $78.5 million, a drop of approximately 37.1%[55]. - Year-to-date (YTD) net cash flows from operating activities decreased by 12.1% to $1,346.2 million compared to $1,531.3 million in the previous year[63]. - Free cash flow for YTD FY25 was $1,042.0 million, down 14.7% from $1,221.7 million in FY24[63]. - Total debt as of February 23, 2025, was $8,145.1 million, down from $8,677.3 million in the previous year[63]. - The net debt to adjusted EBITDA ratio was 3.59 as of February 23, 2025[64]. Segment Performance - The Grocery & Snacks segment net sales decreased 3.2% to $1.2 billion, with a volume share gain in snacking and staples categories[13]. - Year-over-year change in net sales for the Grocery & Snacks segment was a decrease of 3.9%[56]. - Grocery & Snacks segment operating profit decreased by 20.6% year-over-year to $237.6 million[57]. - Refrigerated & Frozen segment operating profit saw a significant decline of 52.5% year-over-year, totaling $95.7 million[57]. - The International segment reported a 49.8% increase in operating profit year-over-year, reaching $107.6 million[58]. - Conagra Brands experienced a decline in adjusted operating profit across all segments, with the most significant drop in Refrigerated & Frozen at 38.8%[57]. Expenses and Costs - Selling, general, and administrative expense (SG&A) increased 14.5% to $444 million, primarily due to charges related to legacy legal matters[9]. - The effective tax rate was 23.3%, slightly down from 23.7% in the prior year quarter[23]. - Cost of goods sold decreased by 2.0% to $2,130.7 million from $2,174.1 million year-over-year[52]. - Legal matters accounted for $95.8 million in expenses in Q3 FY25, impacting overall profitability[57]. - The company reported a loss on divestitures of $27.2 million in the third quarter, compared to no loss in the same period last year[52]. - The company reported asset impairment charges of $121.3 million for the thirty-nine weeks ended February 23, 2025, compared to $50.9 million in the prior year[55]. - Restructuring plans contributed $90.7 million to operating profit adjustments YTD[58]. Guidance and Future Outlook - The company's fiscal 2025 guidance remains unchanged, expecting organic net sales to decline approximately 2% compared to fiscal 2024 and adjusted EPS of approximately $2.35[6][35]. - The company revised its calculation methodology for Adjusted SG&A to include advertising and promotional expenses, impacting prior-year comparisons[47]. Other Financial Metrics - Adjusted EBITDA for YTD FY25 was $1,680.4 million, reflecting an 11.9% decrease from $1,906.8 million in FY24[65]. - Year-to-date (YTD) reported gross profit for Q3 FY25 was $2,296.3 million, accounting for 26.0% of net sales, a decline of 9.2% year-over-year[61]. - The company reported a corporate hedging derivative loss of $7.7 million in Q3 FY25, affecting overall profitability[59]. - The company incurred a net cash outflow from investing activities of $457.2 million, compared to $295.6 million in the previous year[55].

Group 1 - Conagra Brands, Inc. is set to release its third-quarter earnings results on April 3, with analysts expecting earnings of 53 cents per share, a decrease from 69 cents per share in the same period last year [1] - The projected quarterly revenue for Conagra is $2.9 billion, down from $3.03 billion a year earlier [1] - Conagra Brands has partnered with Bloom Energy Corp to implement advanced fuel cell technology at two manufacturing plants in Ohio [2] Group 2 - Conagra Brands shares experienced a decline of 0.8%, closing at $26.38 [2] - Recent analyst ratings include Morgan Stanley initiating coverage with an Equal-Weight rating and a price target of $27 [5] - JP Morgan maintained a Neutral rating and reduced the price target from $29 to $26 [5] - Stifel and Wells Fargo also maintained Hold and Equal-Weight ratings respectively, with price targets adjusted to $26 and $27 [5] - B of A Securities maintained a Neutral rating and cut the price target from $31 to $29 [5]

Conagra Brands, Inc. CAG will release its third-quarter earnings results before the opening bell on Thursday, April 3.Analysts expect the Chicago-based company to report quarterly earnings at 53 cents per share, down from 69 cents per share in the year-ago period. According to data from Benzinga Pro, Conagra projects quarterly revenue at $2.9 billion, compared to $3.03 billion a year earlier.Conagra Brands announced on Tuesday that it’s teaming up with Bloom Energy Corp BE to integrate advanced fuel cell te ...

Conagra Brands, Inc. (CAG) is likely to register a decline in its top and bottom lines when it reports third- quarter fiscal 2025 earnings on April 3. The Zacks Consensus Estimate for revenues is pegged at $2.9 billion, which suggests a decrease of 4.7% from the prior-year quarter's reported figure. The consensus mark for quarterly earnings has moved down by a couple of cents in the past 30 days to 52 cents per share. This indicates a decline of 24.6% from the year-ago quarter's reported figure. CAG has a t ...

New Technology Leverages Renewable Energy Solutions and Advances Conagra's Climate Change Goals CHICAGO, April 1, 2025 /PRNewswire/ -- Conagra Brands, Inc. (NYSE: CAG) and Bloom Energy (NYSE: BE), a global leader in power solutions, today announced they will collaborate to utilize Bloom's fuel cell technology at Conagra's Troy and Archbold, Ohio production facilities. The 15-year PPA (power purchase agreement) will deploy approximately six megawatts and provide combustion-free electricity generation, supply ...