Conagra Brands Profit Sinks as Volumes Slip
Conagra Brands CAG -0.83%decrease; red down pointing triangle recorded lower earnings and sales in its fiscal third quarter as volumes fell across each of its segments.
The maker of Slim Jims and Healthy Choice frozen meals posted a profit of $145.1 million, or 30 cents a share, for the quarter ended Feb. 23. That's down from $308.6 million, or 64 cents a share, in the same period a year earlier.
Stripping out one-time items, adjusted earnings were 51 cents a share. Analysts polled by FactSet had been expecting 52 cents a share.
Sales fell 6.3% to $2.84 billion, below analyst projections for $2.9 billion, according to FactSet.
The top line was 5.2% lower on an organic basis, driven by lower volumes, prices and an unfavorable change in the mix of products sold.
Revenue was also hurt by foreign exchange headwinds and impacts from the company's recent divestitures. It sold a majority stake in India's Agro Tech Foods 500215 4.13%increase; green up pointing triangle in August and said that same month that it would acquire FATTY Smoked Meat Sticks.
Chief Executive Sean Connolly said shipments lagged consumption during the quarter. Conagra faced manufacturing challenges at its primary facility that prepares chicken for frozen meals. It was also hit with a surge of consumption in its frozen vegetable business that depleted its inventory and led to out-of-stocks.
'We are making solid progress in restoring inventory and improving customer service levels,' Connolly said.
Write to Dean Seal at dean.seal@wsj.com
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