Conagra Brands (CAG) Q4 Results: Things to Watch

Conagra Brands, Inc. CAG will likely see a decline in revenue and net earnings when it reports fourth-quarter fiscal 2024 results on July 11. The Zacks Consensus Estimate for net sales is $2.9 billion, down 1.2% from the prior-year quarter’s reported figure. The consensus estimate for fiscal 2024 revenue is $12.1 billion, down 1.6% from the prior-year period’s reported figure.

The consensus for quarterly earnings has fallen a cent over the past 30 days to 56 cents per share. That represents a 9.7% decline from the year-ago quarter. The consensus for fiscal 2024 earnings is set at $2.62 per share, suggesting a 5.4% decline from the year-ago quarter. CAG has an average earnings surprise of 6.8% over the past four quarters.

Factors to look out for

CAG is grappling with cost inflation that is squeezing margins. The company is incurring higher advertising and promotion (A&P) expenses. These trends likely impacted the company’s profitability in the reported quarter. Our model suggests A&P expenses rose 17.2% in the fiscal fourth quarter.

For fiscal 2024, management is forecasting adjusted earnings per share (EPS) of $2.60 to $2.65, suggesting a year-over-year decline. The company expects an annual adjusted operating margin of 15.8%.

The company is also grappling with sluggish volumes due to an industry-wide consumption slowdown. Macroeconomic challenges are negatively impacting consumer purchasing patterns. Our model suggests volume declines of 1.2% in the fourth quarter and 3.1% in fiscal 2024. Management is forecasting organic net sales declines of 1-2% in fiscal 2024.

What the Zacks Model Reveals

Our proven model predicts an earnings beat for Conagra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the probability of an earnings beat. You can discover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Conagra has a Zacks Rank #3 and an Earnings ESP of +2.78%.

Other stocks with a favorable combination

Here are a few stocks to consider because our model shows they, too, have the right combination of elements to outperform financially this reporting cycle.

Kimberly-Clark Corporation KMB currently has an Earnings ESP of +2.25% and a Zacks Rank of #3. The company is likely to see a decline in the top line when it reports its second-quarter 2024 results. The consensus for revenue is $5.08 billion, suggesting a decline of 1.1% from the year-ago quarter’s reported figure. You can see complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kimberly-Clark’s quarterly earnings of $1.67 per share suggests a 1.2% increase from the year-ago quarter. KMB has an average earnings surprise of 11.3% over the trailing four quarters.

Chlorox CLX currently has an Earnings ESP of +2.14% and a Zacks Rank of 3. The company is likely to see a decline in revenues and earnings when it reports its fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for Clorox’s quarterly revenue is $1.98 billion, down almost 2% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Clorox’s quarterly earnings of $1.53 suggests a decline of 8.4% from the year-ago quarter’s levels. However, Clorox has an average earnings surprise of 128.5% over the trailing four quarters.

Domino’s Pizza, Inc. DPZ currently has an Earnings ESP of +6.00% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2024 earnings per share is $3.66, suggesting year-over-year growth of 18.8%.

The Zacks Consensus Estimate for Domino’s Pizza’s quarterly revenue is $1.1 billion, representing an increase of 7.8% from the figure reported in the year-ago quarter. DPZ has seen an average earnings surprise of 9.3% over the trailing four quarters.

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