Conagra shares down 10% on Thursday: find out why

on Jul 14, 2022
  • Conagra Brands reports weaker-than-expected sales for its fiscal fourth quarter.
  • Jim Cramer reacts to Conagra Q4 results on CNBC's "Squawk on the Street".
  • Conagra shares sank nearly 10% following the earnings report this morning.

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.

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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

Commenting on the stock market news, famed investor Jim Cramer said on CNBC’s “Squawk on the Street”:

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.

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