ConAgra Foods Inc (CAG)

Return on sales

The analysis of ConAgra Foods Inc.'s profitability ratios, based on the provided data up to May 2025, reveals notable trends and fluctuations across multiple periods.

Gross Profit Margin: The gross profit margin demonstrates considerable volatility over the analyzed periods. Initially, the margin hovered around the low single digits in 2022, starting at approximately 9.10% in August 2022, with incremental increases throughout late 2022, peaking at 12.72% in November 2022. A significant increase is evident from early 2023, reaching approximately 20.41% in late February 2023, indicating improved product profitability or market conditions. The margin then declined through mid-2023, settling around 13% in August 2023. A pronounced rise occurs again towards the end of 2023, reaching approximately 19.60%, suggestive of enhanced gross profitability. However, an alarming decline is observed in early 2024, with margins dropping sharply to about 3.11% in May 2024, and remaining low into August 2024. Subsequently, a strong rebound occurs by February 2025, with gross margins climbing above 25%, reaching 25.86%. Overall, the gross profit margin has shown periods of substantial growth interspersed with sharp declines, reflecting variability in cost control, pricing strategies, or product mix.

Operating Profit Margin: The operating profit margin shows more moderate fluctuations initially, with values rising from around 4.56% in August 2022 to peaks over 18% in early 2023, particularly hitting approximately 18.09% in late February 2023. During mid-2023, the margin decreases but remains positive, fluctuating between roughly 8.58% and 16.70%. A critical development is observed from late 2023 to mid-2024, where the operating margin turns negative, reaching lows around -1.92% in November 2024, indicating operating losses or increased operating expenses. The margins recover somewhat in early 2025, rising to approximately 12% by May 2025, suggesting some operational improvements or cost management.

Pre-Tax Margin: The pre-tax profit margin trends mirror the operating margin's pattern of fluctuations. Starting from modest figures (~1.28% in August 2022), the margin increases notably to around 14.25% by the end of February 2023. During the latter part of 2023 and into early 2024, the margins are variable, with a decline into negative territory (-2.95% in August 2024), indicating pre-tax losses in that period. However, a recovery is apparent by early 2025, with pre-tax margins nearing 10%, indicating improved profitability before tax effects.

Net Profit Margin: The net profit margin reflects the culmination of profitability after all expenses. It follows a similar fluctuating pattern, with early lows (~1.42% in August 2022) rising to over 11.50% in early 2023. The net margin dips back into single digits and turns negative in mid-2024 (-4.44% in May 2024), reflecting net losses. Nonetheless, by May 2025, the net margin recovers strongly to approximately 9.92%, indicating a return to profitability.

Overall, the profitability ratios reveal periods of strong profitability, likely driven by favorable market conditions, product mix, or cost efficiencies, contrasted with periods of significant downturns, including negative margins indicative of operational or net losses. The recent rebound in 2025 suggests efforts to restore profitability, although the volatility observed underscores challenges in maintaining consistent profitability levels.

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Return on investment

The profitability ratios of ConAgra Foods Inc. indicate noteworthy fluctuations over the period examined, reflecting varying operational and financial performance dynamics.

Operating Return on Assets (Operating ROA):
The Operating ROA exhibits significant variability, with values starting at 4.06% on August 28, 2022, declining to as low as -1.07% by November 30, 2024, and then demonstrating a recovery to 6.17% by May 31, 2025. Early periods show moderate profitability, but recent data suggest challenges in maintaining operating efficiency, particularly as the ratio dips into negative territory, indicative of declining operational profitability or increased costs relative to assets.

Return on Assets (ROA):
ROA follows a similar trend, beginning at 2.06% in August 2022, declining to negative territory at -2.48% in May 2024, and marginally improving to around 5.11% by May 2025. The pattern suggests periods of diminished asset efficiency, potentially due to operational disruptions, strategic shifts, or market pressures affecting net income generation relative to total assets.

Return on Total Capital:
The Return on Total Capital shows more pronounced fluctuations, with a peak at 25.83% on February 28, 2023, and recent declines to very low levels, approaching near zero or slightly positive again by May 2025. This indicates periods of strong capital efficiency, interspersed with substantial drops, perhaps reflecting changes in capital structure, investment performance, or economic conditions impacting the overall cost-effectiveness of capital deployment.

Return on Equity (ROE):
ROE trends demonstrate considerable volatility, with values ranging from a low of -6.13% in May 2024 to a high of 16.32% on February 28, 2023. The negative values in recent periods suggest significant challenges in generating net income attributable to shareholders. Periods of recovery are evident, but the overall pattern underscores variability in profitability from the shareholders’ perspective.

Summary:
Overall, ConAgra Foods Inc.’s profitability ratios reveal a history of fluctuating performance, with periods of healthy returns interspersed with declines into negative territory. These fluctuations may result from operational challenges, market dynamics, strategic realignments, or external economic factors impacting profitability and asset utilization. The data underscores the importance of ongoing operational efficiency and strategic management to stabilize and enhance profitability metrics over time.