CPB), which, like ConAgra, has struggled with "real growth" for quite some time. Bulls have long argued how this metric is exaggerated. But I disagree, especially given the nature of this sector and how quickly consolidations occur. Organic growth, which measures a company's operational performance using only internal resources and excluding events like acquisitions, continues to be one of the best identifiable metrics (or "labels," if you will) when buying these stocks. Plus, it's anyone's guess when weak shipping volumes, which have also plagued (among others) Coca-Cola ( KO), are going to rebound. Unlike PepsiCo ( PEP), which has navigated the weak volume environment with partnerships like Yum! Brands ( YUM) and the Doritos Locos Tacos of Taco Bell, ConAgra doesn't have that type of a card to play to offset what remains as challenging conditions. Management talked about steps that it's taking to improve sales performances. That's all well and good. But it assumes customers have suddenly been turned off by the company's many household brands including Swiss Miss, PAM and Healthy Choice.
If that were the case, deploying more sales and marketing efforts would be a great strategy. Even though ConAgra hasn't been a flawless executioner, I also believe the company's struggles are being affected just as much by macro weakness as it is by operational inefficiencies. I won't go through the exercise of applying weight to this scale. But I believe that any overinvestment made by management to grow sales will only eat into the company's already weak earnings. Let's not forget that first quarter non-GAAP earnings per share are expected to come in at 37 cents. This represents a 16% year-over-year decline. Given the company's history of eroding gross margins, investors should rethink applauding any efforts that increase expenses. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.