Conagra sees sales and income shrink but CEO remains upbeat

first_imgConagra sees sales and income shrink, but CEO remains upbeatPosted By: News Deskon: September 28, 2017In: Business, Financial, Food, IndustriesPrintEmailConagra has posted a net sales decrease of 4.8% in the first quarter of its fiscal year, which was put down to fees associated with new product launches.In the 13 weeks ending 27 August, the US packaged food company posted net sales of $1.8 billion, down from $1.89 billion the year before.Conagra said it estimates that incremental slotting fees associated with innovation launches negatively impacted net sales and organic net sales growth rates by approximately 50 basis points and 42 basis points respectively.Net income was also down 19.3% from $190 million to $153.3 million in the first quarter.In its grocery and snacks segment, sales were down 2% to $746 million. Conagra said the acquisitions of the Duke’s, Bigs, and Frontera businesses added ‘over 3% to the growth rate’. Volume declined 6% as a result of a policy to drive improvements in trade productivity and the discontinuations of lower performing products.Meanwhile, net sales for its refrigerated and frozen segment increased 2% to $616 million. Segment volume increased 1%, primarily driven by innovation launches.CEO Sean Connolly said he is confident in the company’s strategy of discontinuing less profitable products from its portfolio, while developing new products.Conagra CEO Sean Connolly“We continued to see gross margin expansion, despite higher than expected inflation and our planned increase in slotting investments to fund innovation,” he said.  “Most notably, our sales trends improved further this quarter. Our sales trend improved as a result of accelerating velocities on our existing business as well as a strong start to our innovation. “Overall, we remain encouraged that our value over volume strategy, as well as our rebuilt innovation capabilities, continued to deliver as expected. We are confident in our ability to build on this momentum and drive long-term shareholder value.”Earlier this week the company announced it had agreed to acquire Angie’s Artisan Treats, the maker of Angie’s Boomchickapop ready-to-eat popcorn from TGP Growth for $250 million.Conagra now predicts that in the 2018 fiscal year it will record net sales growth of between 0% and 2%.Share with your network: Tags: ConagrafinancialUnited Stateslast_img

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