ConAgra Revenue Slips as Spinoff Remains On Target
September 29 2016 - 9:30AM
Dow Jones News
ConAgra Foods Inc. on Thursday reported revenue declines across
its units as it works to spin off its frozen potato business and
focus on higher-quality, higher-priced products.
The Omaha-based food maker, known for brands including Slim Jim
snacks, Banquet frozen meals and Peter Pan peanut butter, has been
reshaping its business to focus more on foods seen as more natural
and healthy.
"While we are taking broad-based actions to build a higher
quality revenue base, the related volume declines are concentrated
in brands where we have historically underpriced and
over-promoted," Chief Executive Sean Connolly said.
ConAgra said that the spinoff of the Lamb Weston frozen-potato
line remains on track and that the two companies will host separate
investor days in October. The food maker said that Chief Financial
Officer John Gehring, who the company said was retiring, will be
interim CFO for Lamb Weston.
In February, ConAgra completed the $2.7 billion sale of its
private label business to TreeHouse Foods. ConAgra bought the
business--which makes cereal, pasta, condiments for supermarkets to
use as their house brands--about three years earlier for $5
billion.
The company is focusing on boosting the quality and prices of
once-bargain brands such as Banquet and simplifying the ingredients
of its products.
In its latest quarter, its grocery and snacks segment posted a
5.4% sales decline as prices and mix rose 1% but volumes fell
6%.
In its refrigerated and frozen segment, sales fell 8% as the
company works stop using deep discounts to drive volume in its
Banquet frozen meals. Volumes declined 11% as price and mix
increased 3%.
The company said Lamb Weston had "outstanding performance"
during the quarter, growing 4%, but the revenue fell 2% overall
because of other divested businesses.
In all, ConAgra reported a profit of $186.2 million, or 42 cents
a share, compared with a year-ago loss of $1.15 billion, or $2.65 a
share. On an adjusted basis, earnings were 61 cents.
Sales fell 4.6% to $2.68 billion.
Analysts polled by Thomson Reuters had expected adjusted
earnings per share of 48 cents on revenue of $2.73 billion.
Shares rose 2% in premarket trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
September 29, 2016 09:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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