Conagra Brands, Inc. CAG is likely to witness a top and bottom-line decline when it reports third-quarter fiscal 2026 earnings on April 1. The Zacks Consensus Estimate for revenues is pegged at $2.77 billion, indicating a decrease of 2.6% from the prior-year quarter’s reported figure.
The consensus mark for earnings has remained unchanged in the past 30 days at 40 cents per share, suggesting a drop of 21.6% from the figure recorded in the year-ago quarter. CAG has a trailing four-quarter earnings surprise of 3.4%, on average.
Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote
Factors Likely to Influence CAG’s Q3 Results
Conagra’s third-quarter results are likely to reflect continued pressure on both sales and earnings, as the company entered the period facing a still-cautious consumer backdrop. As per management, in the prior quarter, shoppers, especially lower and middle-income consumers, remained value-conscious, which is likely to have kept demand uneven across parts of the portfolio. The company also began the quarter after weather disruptions and SNAP-related timing issues affected prior-period trends, making the operating environment difficult.
Another factor that may have affected the quarter is the timing of retailer orders and promotions. On its last earnings call, Conagra said that some promotional activity, especially in frozen, moved from the second quarter into the third. This is likely to have supported shipments in certain areas, but results may be shaped more by timing than a clear improvement in demand. Our model suggests a volume dip of 0.6% for the third quarter.
On the profitability front, margins are expected to have remained under pressure from elevated input costs and continued investments in the business. Inflation across commodities and packaging has kept the cost structure high, while increased spending on advertising, promotions and merchandising to support volume growth is likely to have weighed on earnings. We expect the adjusted gross margin to contract 160 basis points in the quarter under review.
On the positive side, underlying trends in frozen and snacks appear to be improving, supported by innovation, better promotional activity and strong supply-chain execution, which may have provided some cushion. Our model indicates a 1.5% volume increase for the Refrigerated & Frozen segment for the quarter under consideration.
Earnings Whispers for CAG Stock
Our proven model doesn’t conclusively predict an earnings beat for Conagra Brands this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Conagra Brands currently carries a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Hormel Foods Corporation HRL currently has an Earnings ESP of +1.70% and a Zacks Rank of 2. The consensus estimate for Hormel Foods’ quarterly revenues is pinned at $2.95 billion, which calls for 1.6% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 35 cents, indicating flat year-over-year growth. HRL delivered a trailing four-quarter negative earnings surprise of 0.4%, on average.
Tyson Foods, Inc. TSN currently has an Earnings ESP of +8.64% and a Zacks Rank of 3. The consensus estimate for Tyson Foods’ quarterly revenues is pinned at $13.78 billion, which suggests 5.4% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 81 cents, which implies a 12% decrease year over year. TSN delivered a trailing four-quarter earnings surprise of nearly 16.5%, on average.
Monster Beverage Corporation MNST currently has an Earnings ESP of +0.60% and a Zacks Rank of 3. The consensus mark for the upcoming quarter’s revenues is pegged at $2.15 billion, which indicates an increase of 15.7% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly EPS of 53 cents implies an increase of 12.8% from 47 cents reported in the year-ago quarter. MNST delivered a trailing four-quarter earnings surprise of 7.8%, on average.
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Conagra Brands (CAG): Free Stock Analysis Report
Hormel Foods Corporation (HRL): Free Stock Analysis Report
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
Monster Beverage Corporation (MNST): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).