Conagra Gears Up for Q2 Earnings: What You Should Understand

Core Insights - Conagra Brands, Inc. (CAG) is expected to report a decline in both revenue and earnings for the second quarter of fiscal 2025, with revenue estimated at $3.1 billion, reflecting a nearly 2% decrease year-over-year, and earnings per share projected at 68 cents, down 4.2% from the previous year [1][3]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for Conagra's revenues is $3.1 billion, indicating a decline of almost 2% from the prior-year quarter [1]. - The consensus estimate for quarterly earnings has remained unchanged at 68 cents per share, suggesting a 4.2% decrease from the year-ago quarter [1]. - Conagra has a trailing four-quarter negative earnings surprise of 3.1% on average [1]. Group 2: Industry and Operational Challenges - Conagra's Foodservice division is experiencing pressure due to sluggish consumption trends, with an anticipated 8.5% decline in Foodservice unit organic sales for the second quarter [3]. - Overall volume is expected to decline by 0.7%, with organic sales projected to drop by 1.8% in the upcoming quarter [3]. - The company is facing persistent cost inflation, particularly in goods sold (COGS), driven by rising costs in protein and sweeteners, which poses a threat to profitability [4]. Group 3: Earnings Prediction Insights - The current model does not predict an earnings beat for Conagra, as it has a Zacks Rank of 3 and an Earnings ESP of -4.01% [5][7]. - A positive Earnings ESP combined with a Zacks Rank of 1, 2, or 3 typically increases the likelihood of an earnings beat, but this is not applicable for Conagra at this time [5].