What Happened?
Shares of packaged foods company Conagra Brands (NYSE: CAG) fell 2.9% in the morning session after the company reported weak fourth-quarter results that showed a significant drop in sales and a swing to a net loss.
Net sales decreased by 6.8% to $2.98 billion compared to the same period in the previous year, driven by a 3.0% decline in volume. The company posted a net loss of $663.6 million, or $1.39 per share, a stark reversal from a profit of $284.5 million a year ago. This loss was primarily caused by a large non-cash impairment charge related to its brands and goodwill. While Conagra's adjusted earnings of $0.45 per share slightly beat analyst estimates, it marked a steep 35.7% decline from the previous year. Despite the poor quarterly performance, the company reaffirmed its financial forecasts for the full fiscal year.
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What Is The Market Telling Us
Conagra’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock dropped 7.7% after the company reported underwhelming preliminary full-year 2025 guidance and expects sales and profits to be below its previous forecast. Precisely, the company expects full-year earnings of about $2.35 (vs. previous guidance of $2.45 to $2.50 per share). Organic sales are also expected to decline by 2% year on year (vs previous guidance of a decline between 1.5% and flat growth).
Conagra is down 37% since the beginning of the year, and at $17.43 per share, it is trading 37.2% below its 52-week high of $27.75 from December 2024. Investors who bought $1,000 worth of Conagra’s shares 5 years ago would now be looking at an investment worth $484.43.
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