the rally. CNBC's Peter Book, contributor Peter Bookfar is behind that call. He's the chief investment officer.At one point, BFG Wealth Partners, Peter, great to have you with us. Um, read your note this morning as I normally do and you highlighted some comments from Kagra. So there's both the trade related to Kagra which you have but also um the commentary that you pulled out of the conference call and I want to start off with the commentary and what it tells us about the consumer because management sounde ...

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]

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]

Core Insights - The company, known for brands like Reddi-Wip and Slim Jim, reported quarterly earnings that exceeded analysts' expectations [1] Financial Performance - The quarterly earnings showcased a strong performance, indicating robust demand for the company's products [1] - Analysts had anticipated lower earnings, making the actual results a positive surprise [1]

Company Overview - Conagra Brands, Inc. (CAG) has a market cap of $8.7 billion and is a leading North American packaged foods company with a diverse portfolio including brands like Birds Eye, Healthy Choice, Slim Jim, Reddi-wip, and Marie Callender's [1] - The company operates across four segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice, focusing on innovative food products that cater to changing consumer preferences [1] Financial Performance - Conagra Brands is set to announce its Q1 2026 results on October 1, with analysts expecting an adjusted EPS of $0.33, a decrease of 37.7% from $0.53 in the same quarter last year [2] - For fiscal 2026, analysts forecast an adjusted EPS of $1.73, representing a 24.8% decrease from $2.30 in fiscal 2025, but anticipate an 8.7% year-over-year growth to $1.88 in fiscal 2027 [3] Stock Performance - Shares of Conagra Brands have declined over 44% in the past 52 weeks, underperforming the S&P 500 Index's 15.4% return and the Consumer Staples Select Sector SPDR Fund's 5.9% decline [4] - Following the release of weak Q4 2025 results, shares fell 4.4%, with adjusted EPS of $0.56 missing consensus estimates and net sales of $2.8 billion down 4.3% year-over-year [5] Analyst Sentiment - The consensus view on CAG stock is cautious, with a "Hold" rating from 17 analysts; two recommend "Strong Buy," 12 suggest "Hold," one advises "Moderate Sell," and two "Strong Sells" [6] - The average analyst price target for Conagra Brands is $20.47, indicating a potential upside of 13.2% from current levels [6]

Group 1 - Conagra Brands, Inc. is facing challenges due to 7% inflation and issues with tin can supply, which are negatively impacting its margins [2] - The company has a portfolio of well-known brands, including Slim Jim, Marie Callender's, and Duncan Hines, but is struggling to pass on price increases to consumers [2] - Despite these challenges, Conagra has indicated that it can maintain its dividend payments, although concerns about the sustainability of dividends are raised [2] Group 2 - Jim Cramer emphasizes the importance of growth in stocks over high dividends, suggesting that high dividends may indicate underlying problems within the company [1] - The overall sentiment is that while Conagra has potential, other sectors, particularly AI stocks, may offer better investment opportunities with less risk [2]

Group 1 - Conagra Brands, Inc. (CAG) is valued at a market cap of $8.9 billion and operates over 70 iconic brands across various segments including grocery, snacks, and foodservice [1][2] - CAG is classified as a mid-cap stock, highlighting its size and influence in the packaged foods industry, and it focuses on brand modernization and product innovation to maintain market relevance [2] - The company's shares have retreated 44.3% from their 52-week high of $32.90, with a 14.8% decline over the past three months, underperforming the Nasdaq Food & Beverage ETF [3][4] Group 2 - Over the past 52 weeks, CAG shares have fallen 43.3%, significantly underperforming the FTXG's 16.1% drop, and are down 34% year-to-date compared to FTXG's 6.3% decline [4] - Following disappointing Q4 results, where revenue was $2.8 billion and adjusted EPS was $0.56, CAG's shares fell 4.4%, with year-over-year declines attributed to various economic pressures [5] - Analysts remain cautious about CAG's prospects, with a consensus rating of "Hold" and a mean price target of $20.60, indicating a 12.4% premium to current price levels [6]

Group 1: Company Overview - Conagra Brands is a consumer staples company with a market cap of around $9 billion, producing packaged food products under notable brands like Slim Jim, Hunts, Healthy Choice, and Duncan Hines [2] - The company is considered a second-tier player in the packaged food space, which implies it may face challenges in a market where quality is prioritized over value [4] Group 2: Financial Performance - Over the past year, Conagra's stock has lost a third of its value, indicating underlying issues within the company [5] - The company's gross profit margin has been declining since reaching a peak in 2023, coinciding with the stock's downward trend [5] - Revenue has also been trending lower, suggesting that Conagra's brand portfolio is not resonating well with consumers, complicating the gross profit margin situation [6] Group 3: Recent Results and Guidance - In the fiscal fourth quarter of 2025, Conagra experienced a 4.3% drop in sales and a 3.5% decline in organic sales, both worse than the full-year fiscal 2025 figures [7] - Guidance for fiscal 2026 indicates that organic sales are expected to be roughly flat, with a projected decline in adjusted operating margin and materially lower earnings [8] Group 4: Investment Considerations - While Conagra is likely to survive its current challenges, it may not be an attractive investment for most, particularly conservative dividend investors, due to a high adjusted earnings dividend payout ratio projected to be as high as 80% in fiscal 2026 [10] - The lack of a dividend increase since the second quarter of fiscal 2024 further underscores concerns regarding the company's financial health [10]

Core Viewpoint - The significant decline in stock prices of Conagra Brands and Campbell's Company presents a potential buying opportunity for patient investors despite the challenges faced by the packaged food industry [3][20]. Industry Overview - The packaged food industry is experiencing a severe slowdown due to pullbacks in consumer spending and inflation, which have particularly impacted packaged food companies [5]. - A shift in consumer behavior towards healthier options poses a significant challenge for the industry, especially for companies focused on frozen and processed meals [6]. Company Performance - Conagra and Campbell's stocks have both dropped over 25% year to date, reaching their lowest levels in over a decade, resulting in dividend yields of 6.8% and 5.1%, respectively [1][2][16]. - Both companies have faced difficulties due to poor acquisition decisions, with Conagra's acquisition of Pinnacle Foods for $10.9 billion and Campbell's acquisition of Snyder's-Lance for $6.1 billion being particularly criticized [11][12][13]. Financial Metrics - Conagra's free cash flow (FCF) per share is $3.02, while its dividend per share is $1.40; Campbell's FCF per share is $2.41 against a dividend of $1.52, indicating that both companies can support their dividends despite weakening balance sheets [18]. - In terms of valuations, Campbell's has a price-to-FCF ratio of 12.8 and a forward price-to-earnings (P/E) ratio of 10.5, while Conagra has a price-to-FCF ratio of 6.8 and a forward P/E of 8.3, showing that both stocks are significantly discounted compared to their historical averages [19]. Regulatory Environment - Regulatory pressures, such as the U.S. Department of Health and Human Services' measures to phase out synthetic dyes, add to the challenges faced by the industry but could lead to long-term benefits [7][9]. - Conagra announced plans to remove synthetic colors from its U.S. frozen product portfolio by the end of 2025, aligning with industry trends towards healthier ingredients [8].