Dive Brief:
- ConAgra reported a 4.6% dip for its first fiscal quarter net sales to $2.67 billion. That figure missed analysts' expectations of $2.73 billion, according to numerous reports.
- Lower demand for grocery, snacks and frozen food items contributed to the quarterly sales decline.
- Net income attributable to ConAgra came in at $186.2 million, or $0.42 per share, compared with a loss of $1.15 billion, or $2.68 per share, in the same period last year.
Dive Insight:
Sales for all segments decreased in the quarter, and the impact of ConAgra's divested businesses offset Lamb Weston's 4% growth, MarketWatch reported. ConAgra CEO Sean Connolly said in a statement that "the related volume declines are concentrated in brands where we have historically under-priced and over-promoted," though he didn't mention any specific brands.
ConAgra has been actively divesting business segments that are underperforming or no longer aligning with the company's consumer brands focus. This has led experts to speculate that ConAgra could also shed additional grocery brands. Last year, Technomic exec Bob Goldin said ConAgra was lacking in "power brands," despite its large portfolio.
ConAgra has substantially contracted its business model and portfolio and expects to complete the tax-free Lamb Weston spinoff in November. But the company has also not shied away from acquisitive growth opportunities. That includes its recent acquisition of the grocery brands under the gourmet Mexican company Frontera Foods, a deal ConAgra closed earlier this week ahead of earnings. The acquisition positions ConAgra in the fast-growing Mexican food category, which could be a top-line boost the company needs in future quarters.