PREVIEW: Conagra's rev, EPS seen down in report early Wednesday

Shares of Conagra Brands CAG.N dipping 0.7% to $15.62 on Tues ahead of fiscal Q3 results due before the bell on Wednesday, as investors eye demand trends

Packaged food maker expected to report qtrly rev of $2.76 bln, down ~3% y/y, and adj EPS of $0.40, down from $0.51 a yr ago, per LSEG

In its prior qtr, the Birds Eye and Duncan Hines owner maintained its annual forecast but swung to a loss after a large writedown, citing falling volumes and strained consumer budgets

Earlier this month, peer General Mills GIS.N reaffirmed its annual forecasts after a recent cut, as pressure on consumer spending and stiff competition muted demand

And Campbell's Co CPB.O slashed its annual outlooks as it grapples with weak demand, and suspended its stock buyback program to focus on reducing debt

Jefferies said in a food industry note last week that earnings pressure continues to build, driving rising dividend risk as reinvestment needs and volume softness constrain cash flow and balance sheet flexibility

Citing CAG's stock trading around a 9% yield, Jefferies said a lack of meaningful cash flow improvement could force management to choose between a higher-cost refinancing, asset sales or a reassessment of the dividend

CAG early Tues declared a qtrly dividend of 35 cents/sh for the 12th straight time

With move on the session, CAG stock down ~10% YTD, underperforming ~2% decline in the S&P 500 Packaged Foods and Meats index .SPLRCFOOD and ~5% drop in the S&P 500 .SPX