Earnings Preview: Conagra Brands (CAG) Q1 Earnings Expected to Decline

Conagra Brands (CAG) is projected to report a significant year-over-year decline in Q1 earnings and revenue, with consensus EPS at $0.33 (-37.7%) and revenue at $2.61 billion (-6.5%) for the quarter ending August 2025. Despite a positive Zacks Earnings ESP of +6.95%, which typically suggests a potential beat, the company's Zacks Rank #4 (Sell) and a history of missing EPS estimates in three of the last four quarters indicate that CAG is not a compelling candidate for an earnings beat ahead of its October 1 report.

Analysis

Conagra Brands (CAG) is positioned for a challenging Q1 earnings report, with consensus estimates projecting significant year-over-year declines in both revenue and profitability. Expected revenues of $2.61 billion represent a 6.5% contraction, while the forecast EPS of $0.33 indicates a steep 37.7% drop from the prior year. While the Zacks Earnings ESP of +6.95% suggests recent analyst revisions have turned slightly more bullish, this positive signal is overshadowed by the company's Zacks Rank of #4 (Sell), which points to a weak underlying fundamental picture. This combination, according to the source, makes it difficult to predict an earnings beat with confidence. The bearish outlook is further substantiated by CAG's recent performance, having missed consensus EPS estimates in three of the last four quarters, including a -5.08% negative surprise in the last reported period. The broader industry context, evidenced by peer Lamb Weston (LW) also facing expected YoY declines in earnings (-26%) and revenue (-2.5%), suggests sector-wide headwinds are at play, making CAG's path to outperformance more difficult ahead of its October 1st announcement.

Key Decisions for Investors

• Given the consensus for a steep 37.7% YoY earnings decline and a Zacks #4 (Sell) rating, investors should exercise caution and consider reducing exposure ahead of the earnings release.
• The conflicting data between a positive Earnings ESP (+6.95%) and the strong sell-side rating creates uncertainty, making this an event where volatility-based options strategies may be more prudent than a directional long or short equity position.
• Pay close attention to management's forward-looking guidance on the earnings call, as any post-release stock performance will likely depend more on the future outlook and margin commentary than on beating the low bar set for Q1 results.
• Monitor the results of peer Lamb Weston to differentiate between company-specific execution issues at Conagra and broader headwinds affecting the entire Food - Miscellaneous sector.