News

Conagra Brands, Inc. CAG is likely to register a top- and bottom-line decline when it reports fourth-quarter fiscal 2024 earnings on Jul 11. The Zacks Consensus Estimate for net sales is pegged at $2.9 billion, suggesting a decline of 1.2% from the prior-year quarter’s reported figure. The consensus mark for the fiscal 2024 top line is pegged at $12.1 billion, indicating a decline of 1.6% from the year-ago period’s reported figure.

The consensus mark for quarterly earnings has moved down by a penny in the past 30 days to 56 cents per share. This indicates a decline of 9.7% from the year-ago quarter’s reported figure. The consensus mark for the fiscal 2024 bottom line is pegged at $2.62 per share, suggesting a decline of 5.4% from the year-ago period’s reported figure. CAG has a trailing four-quarter earnings surprise of 6.8%, on average.

Factors To Note

CAG has been facing cost inflation, which is squeezing its margin performance. The company is experiencing higher spending on advertising and promotions (A&P). These trends are likely to have impacted the company’s profitability in the to-be-reported quarter. Our model suggests an A&P expenses increase of 17.2% in the fiscal fourth quarter.

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

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

What the Zacks Model Unveils

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 odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Other Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.

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

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

Clorox CLX currently has an Earnings ESP of +2.14% and a Zacks Rank of 3. The company is likely to register a top- and bottom-line decline when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $1.98 billion, calling for a decline of 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 drop of 8.4% from the year-ago quarter’s levels. However, Clorox has a trailing four-quarter earnings surprise of 128.5%, on average.

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 pegged at $3.66, suggesting 18.8% growth year over year.

The Zacks Consensus Estimate for Domino's Pizza’s quarterly revenues is pegged at $1.1 billion, indicating a rise of 7.8% from the figure reported in the prior-year quarter. DPZ has a trailing four-quarter earnings surprise of 9.3%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.