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]

Q3 FY25 Performance - Conagra's Q3 organic net sales decreased by 5.2% to $2852 million compared to the previous year[40] - The adjusted gross margin was 24.8%, a decrease of 389 basis points year-over-year[40] - Adjusted operating margin was 12.7%, down 369 basis points compared to last year[40] - Adjusted EPS decreased by 26.1% to $0.51[40] Segment Performance - Grocery & Snacks net sales were $1245 million, a decrease of 3.9% organically[43] - Refrigerated & Frozen net sales were $1116 million, a decrease of 7.2% organically[43] - International net sales decreased by 1.2% organically to $224 million[43] - Foodservice net sales decreased by 6.3% organically to $256 million[43] Volume and Pricing - Total Conagra Brands volume decreased by 3.1%, while price/mix decreased by 2.1%[43] - Conagra Domestic Retail Consumption volume increased by 1.1%[9] FY25 Guidance - The company maintained its FY25 guidance, projecting organic net sales growth of approximately -2.0%[36] - Adjusted operating margin is expected to be around 14.4%[36] - Adjusted EPS is projected to be approximately $2.35[36]

Financial Data and Key Metrics Changes - Conagra's organic net sales for Q3 were $2.9 billion, reflecting a 5.2% decline compared to the prior year [18] - Adjusted gross margin was 24.8% and adjusted operating margin was 12.7%, both down from the previous year [18] - Adjusted earnings per share (EPS) were $0.51, a decrease of $0.18 year-over-year [18] Business Line Data and Key Metrics Changes - Grocery and Snacks segment net sales were $1.2 billion, down 3.9% year-over-year due to lower volumes and unfavorable price mix [20] - Refrigerated and Frozen segment net sales were $1.1 billion, down 7.2% year-over-year, impacted by supply constraints [21] - International segment organic net sales declined 1.2% year-over-year, with volume declines partially offset by price mix increases [21] - Foodservice business organic net sales decreased 6.3% year-over-year, affected by ongoing softness in commercial traffic [22] Market Data and Key Metrics Changes - Domestic retail consumption volume increased by 1.1% compared to the prior year, indicating strong consumer demand [6] - 60% of Conagra's portfolio either held or gained volume share, outperforming peers by eight percentage points [10] Company Strategy and Development Direction - The company is focused on restoring inventory and improving customer service levels through investments in infrastructure and strategic partnerships [5] - Conagra is committed to a disciplined approach to brand building, avoiding heavy discounting to ensure long-term brand health [11] - Investments are being made to expand capacity in frozen vegetables and frozen meals to meet elevated demand [29] Management's Comments on Operating Environment and Future Outlook - Management remains vigilant regarding external factors such as tariffs, inflation, and shifts in consumer sentiment, while maintaining fiscal 2025 guidance unchanged [5][16] - The company expects total company volume to improve in Q4, driven by strong consumption trends [28] Other Important Information - The company generated $1.3 billion in net cash flows from operating activities in the first three quarters of fiscal 2025, down from the prior year but historically strong [26] - Capital expenditures for the year are expected to be approximately $410 million to support supply chain modernization [31] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

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 ...