Conagra Brands Inc (NYSE: CAG) is down nearly 10% on Thursday after the food company said its fourth-quarter sales came in shy of the Wall Street estimates.
Notable figures in Conagra earnings report
- Net income printed at $158.9 million versus year-ago figure of $309.5 million
- Per-share earnings of 33 cents were down almost 50% from last year
- On an adjusted basis, EPS stood at 65 cents, as per the earnings press release
- $2.910 billion in sales translate to a 6.0% increase on a year-over-year basis
- FactSet consensus was for 63 cents of adjusted EPS on $2.929 billion in sales
According to Conagra Brands, its adjusted gross margin tanked 147 basis points in Q4 to 24.9%. The stock is down about 5.0% versus the start of the year 2022.
Conagra shares slid on weak guidance
Conagra shares are down on Thursday also because the consumer packaged goods company disappointed on the outlook. For fiscal 2023, it forecasts a 4% to 5% increase in organic sales on a 5.0% growth in adjusted EPS at the top end of its range.
This compares to a much higher 7.8% increase in adjusted EPS that analysts foresee on a 3.2% growth in sales.
Jim Cramer reacts to Conagra Q4 results
Conagra gross margins decreased 310 basis points but they’re going to put through multiple price increases. There’s not a lot to like right now Conagra, but one the price increases come through, the stock [will] go up.
Wall Street currently rates Conagra at “hold” and sees a 10% upside from here on average.