Core Viewpoint - The recent drop in the Nasdaq Composite and S&P 500 has led investors to seek safer investments, particularly in consumer staples, but not all consumer staples stocks are advisable to buy now [1] Group 1: Consumer Staples Overview - Consumer staples companies provide essential products that consumers regularly purchase, making them generally viewed as safer investments during economic downturns [2] - Over the past month, the average consumer staples stock has declined less than the S&P 500 or Nasdaq Composite, indicating relative stability [3] Group 2: Company Performance - PepsiCo has outperformed the average consumer staples stock, with a 2.6% increase in value over the past month, while the average consumer staples stock has decreased by 2.6% [3] - In 2024, PepsiCo reported a 2% rise in organic sales and a 9% increase in adjusted earnings, demonstrating solid business performance despite previous inflation-driven price hikes [4] Group 3: Stocks to Avoid - Kraft Heinz is struggling, with organic sales in its key segment declining from a 0.5% increase in Q1 to a 5.2% drop in Q4 of 2024, indicating it is not a safe investment despite a 5.3% dividend yield [6] - Conagra's organic sales rose only 0.3% in Q2 of fiscal 2025, while adjusted earnings fell 1.3%, raising concerns about investing in its second-tier brands despite a 5.4% dividend yield [7] - B&G Foods offers a high dividend yield of over 10%, but its acquisition-driven model has resulted in a heavy debt load, making it a risky investment despite the attractive yield [8]

Company Overview - Conagra Brands, Inc. is one of North America's leading branded food companies with a history of over 100 years in quality food production [3] - The company generated net sales of more than $12 billion in fiscal 2024 [3] - Conagra's brand portfolio includes well-known names such as Birds Eye®, Duncan Hines®, Healthy Choice®, and Slim Jim® [3] Upcoming Financial Results - Conagra Brands will release its fiscal 2025 third quarter results on April 3, 2025 [1] - A press release and supplemental materials will be available that morning, followed by a 30-minute live Q&A session with the investment community at 9:30 a.m. ET [1] Access to Information - The pre-recorded remarks, transcript, press release, and presentation slides will be accessible at conagrabrands.com/investor-relations under Events & Presentations [2] - The live audio Q&A can be accessed via phone for U.S. participants at 1-877-883-0383 and for international participants at 1-412-902-6506 using passcode: 8551232 [2]

Core Insights - Conagra Brands experienced a significant stock decline of nearly 6% following a lowered guidance for fiscal 2025, despite the S&P 500 showing a positive performance [1] - The company now anticipates a 2% decline in organic sales, a notable downgrade from the previous estimate of a 0.7% to 0.8% decline [2] - Non-GAAP adjusted earnings per share forecast has been reduced to approximately $2.35, down from an earlier expectation of $2.45 to $2.50, compared to $2.67 in fiscal 2024 [3] Company Performance - The lowered guidance is attributed to "customer service interruptions" caused by supply constraints in key frozen meal categories, specifically chicken and frozen vegetables, along with negative impacts from foreign exchange rates [4] - Despite these challenges, the CEO expressed satisfaction with the strong demand experienced throughout the year, indicating that investments in infrastructure and strategic partnerships are aimed at long-term success [5] - The company faces significant headwinds, and while some challenges may not be entirely within its control, the deeper-than-expected revenue slump and declining profitability are concerning for investors [6]

Core Insights - Conagra Brands, Inc. is preparing to launch a series of innovations in 2025 to enhance its competitive position and product offerings [1] - The company has revised its fiscal 2025 financial outlook due to supply-chain disruptions and foreign exchange impacts [2][8] Financial Outlook - Organic net sales growth for fiscal 2025 is now expected to decline by 2%, a change from the previous forecast of flat to a 1.5% decrease [2] - Adjusted operating margin is anticipated to be 14.4%, down from the earlier expectation of 14.8% [2] - Adjusted earnings per share have been revised to $2.35, down from the previous estimate of $2.45-$2.50 [3] - The net leverage ratio is expected to rise to 3.55x, compared to the earlier forecast of 3.4x [3] Operational Challenges - Conagra faced significant challenges in the chicken-based frozen meals segment due to production disruptions caused by quality inconsistencies [4] - In the frozen vegetables segment, unexpected consumer demand led to rapid inventory depletion, prompting the company to implement inventory control measures [5] Strategic Growth Initiatives - The company is committed to long-term growth through product innovation, infrastructure improvements, and consumer-driven insights [6] - Investments in upgrading production facilities, particularly in chicken-based frozen meals, are planned to enhance production capabilities [7] - Ongoing investments in supply-chain and manufacturing processes aim to improve operational efficiency and maintain market leadership [7] Investment Analysis - The revised financial forecast indicates short-term challenges, leading to cautious investor sentiment [8] - Despite these challenges, the focus on product innovation and operational efficiency suggests potential for long-term growth [8] - Conagra's shares have decreased by 2.1% over the past month, contrasting with industry and S&P 500 growth [9]

Core Viewpoint - Conagra Brands has updated its fiscal 2025 financial outlook due to temporary service constraints and foreign exchange impacts, while maintaining its long-term targets unchanged [3][4]. Fiscal 2025 Outlook Update - Customer service interruptions occurred in Q3 due to supply constraints on frozen meals containing chicken and frozen vegetables [3]. - Updated fiscal 2025 guidance includes: - Organic Net Sales Growth: ~(-2.0)% (previously near the midpoint of (1.5)% to flat) - Adjusted Operating Margin: ~14.4% (previously ~14.8%) - Adjusted EPS: ~$2.35 (previously $2.45 to $2.50) - Net Leverage Ratio: ~3.55x (previously ~3.4x) [3]. CEO Perspective - The CEO emphasized commitment to brand investment and innovation, noting strong demand despite recent service challenges [4]. Frozen Meals Containing Chicken - Manufacturing challenges at the primary facility for chicken used in frozen meals led to production halts and operational adjustments to restore quality [5]. - The facility is set for modernization upgrades, targeted for completion by the end of Q1 fiscal 2026, while maintaining reduced operations in the short term [6]. Frozen Vegetables - Strong demand in the frozen vegetable segment led to inventory depletion and out-of-stocks, prompting strict product allocation [7]. - The company is investing in increased surge capacity to meet sustained growth in demand [8]. CAGNY Conference Presentation - A presentation detailing Conagra's market position and financial guidance will be held on February 18, 2025, at 9:00 a.m. ET [2][9]. Company Overview - Conagra Brands is a leading branded food company in North America, with a portfolio that includes well-known brands and a focus on innovation [10]. - The company generated over $12 billion in net sales for fiscal 2024 [10].

Core Viewpoint - The article compares Conagra and Kraft Heinz, highlighting their high dividend yields and performance challenges, ultimately suggesting that Conagra may be the better investment choice for high-yield investors. Company Overview - Conagra and Kraft Heinz are both focused on packaged foods, with Conagra owning brands like Slim Jim and Birds Eye, while Kraft Heinz includes Oscar Mayer and Jell-O among its offerings [2][3]. - Kraft Heinz has a market capitalization of approximately $36 billion, making it three times larger than Conagra, which has a market cap of around $12 billion [3][4]. Financial Performance - Both companies are experiencing financial difficulties, with Kraft Heinz's issues being largely self-inflicted due to a focus on cost-cutting post-merger, while Conagra's challenges are more organic [5][6]. - Kraft Heinz's dividend has remained stagnant at $0.40 per share since its cut in 2019, indicating a need for a turnaround [10]. - Conagra's adjusted earnings fell by 1.4% in the fiscal second quarter of 2025, but organic sales increased by 0.3%, suggesting some positive momentum [11][12]. Dividend Analysis - The high dividend yields of both companies, 5.1% for Conagra and 5.4% for Kraft Heinz, are attributed to their lagging financial performance compared to the broader food industry [1][8]. - Conagra has increased its dividend for five consecutive years, while Kraft Heinz's stagnant dividend reflects its ongoing struggles [12][13]. Investment Outlook - Conagra appears to be performing better currently, making it a more attractive option for investors willing to accept higher risk for potential rewards [13][14]. - The article suggests that while both companies are likely to survive, Conagra is slightly ahead in its turnaround efforts, positioning it as a preferable income stock [14].

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - Consumer staple stocks are currently considered cheap, particularly after the recent tech market downturn [2] - The SPDR Consumer Staples ETF (XLP) is highlighted as a key investment vehicle in the consumer staples sector [2] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment strategies [2] - Analysts express personal investment positions in specific stocks, indicating a beneficial long position in CAG [3] - The article serves as an informational resource rather than financial advice, encouraging readers to conduct their own due diligence [4]

Core Insights - Conagra Brands, Inc. will present at the 2025 CAGNY Conference on February 18, 2025, at 9 a.m. ET, discussing business strategies and financial outlook [1] - The presentation will feature key executives including Sean Connolly (CEO), Dave Marberger (CFO), and Bob Nolan (SVP of Demand Science) [1] - A video webcast and presentation slides will be available on the company's investor relations website, with a replay accessible until February 18, 2026 [2] Company Overview - Conagra Brands, Inc. is a leading branded food company in North America with a history of over 100 years in quality food production [3] - The company’s portfolio includes well-known brands such as Birds Eye®, Duncan Hines®, Healthy Choice®, and many others, reflecting its commitment to innovation and consumer preferences [3] - For fiscal 2024, Conagra Brands reported net sales exceeding $12 billion, indicating strong market presence [3]

Core Viewpoint - The launch of China's DeepSeek AI chatbot has caused significant market reactions, particularly impacting tech stocks while benefiting consumer staple stocks [1][2]. Group 1: Impact on Tech Stocks - The introduction of DeepSeek is perceived as a competitive threat to established AI companies like Nvidia and Taiwan Semiconductor, leading to a decline in their stock prices [2][4]. - The tech sector had already been experiencing a rise, driven by strong demand and expectations of an AI revolution, but DeepSeek's efficiency and cost-effectiveness challenge these assumptions [4]. Group 2: Performance of Consumer Staples - Consumer staple stocks such as Conagra Brands, J.M. Smucker, and Kraft Heinz saw gains of 3.9%, 3.5%, and 3.4% respectively, as investors shifted towards safer investments [3]. - These companies are less affected by economic fluctuations and AI developments, making them attractive during market turbulence [5]. Group 3: Company-Specific Insights - Conagra has faced sales declines of 0.4% in its most recent quarter, but it maintains a forecasted adjusted operating margin of 14.8% for fiscal 2025, indicating strong brand and distribution capabilities [6][7]. - J.M. Smucker's revenue, excluding acquisitions, grew by 2%, and the company raised its earnings per share guidance, benefiting from its acquisition of Hostess [8]. - Kraft Heinz has struggled, with a 2.8% revenue decline in its third quarter and a $1.4 billion impairment charge, reflecting ongoing challenges in its product portfolio [9][10]. Group 4: Market Outlook - The recent rotation towards safe stocks may not indicate a long-term trend, but it highlights the tendency of investors to seek stability during periods of heightened risk [11][12]. - Companies in the consumer staples sector are noted for their strong dividend payouts, providing income to investors even in declining markets [12].

Core Viewpoint - Conagra Brands, Inc. (CAG) is currently facing significant challenges, with its stock underperforming compared to industry benchmarks and broader market indices, raising concerns about its long-term investment potential [1][5]. Stock Performance - Over the past three months, Conagra's shares have declined by 12.5%, compared to a 10.8% decline in the industry and an 8.6% drop in the Zacks Consumer Staples sector, while the S&P 500 has grown by 3.4% [1]. - The stock closed at $25.82, nearing its 52-week low of $25.35, and is trading below its 50- and 200-day moving averages, indicating potential weakness [4]. Financial Challenges - Conagra is grappling with inflation and a downturn in its Foodservice unit, which has led to a contraction in gross margins [6]. - The company initially expected inflation to peak in the second quarter of fiscal 2025, but this relief has been delayed, with cost of goods sold inflation at 3.8%, impacting margins by 2.6% [7]. - Adjusted gross profit fell by 2.3% to $842 million, and adjusted gross margin contracted by 52 basis points to 26.4% [7]. Foodservice Unit Performance - The Foodservice segment reported a 0.9% year-over-year sales decline to $292.2 million, with organic sales down by 1% [8]. - Although price/mix improved by 2.9%, volumes decreased by 3.9% due to lost business and sluggish restaurant traffic, reflecting broader macroeconomic challenges [8]. Currency Impact - Conagra's international segment faced a 30-basis-point currency headwind to net sales due to the strengthening U.S. dollar against the Mexican peso, which is expected to pressure profitability in fiscal 2025 [10]. Consumer Dynamics - The company noted that consumer behavior is shifting towards value-seeking and affordability due to ongoing inflation, prompting a revision of its fiscal outlook [11]. - Adjusted operating margin for fiscal 2025 is now expected to be around 14.8%, down from a previous range of 15.6%-15.8% [12]. Earnings Estimates - The Zacks Consensus Estimate for Conagra's earnings per share has been revised downward, indicating a bearish outlook among analysts [13]. - For fiscal 2025, adjusted earnings per share are projected to be in the range of $2.45-$2.50, down from the earlier estimate of $2.60-$2.65 [12]. Strategic Response - In response to these challenges, Conagra is increasing investments in advertising, promotions, and innovation, although the effectiveness of these efforts varies [12]. - Despite strong brand positioning and strategic growth efforts, persistent inflation and a dynamic consumer environment pose challenges for the company [14].