CAG ConAgra Brands Inc

By Micah Maidenberg 

Conagra Brands Inc. joined the list of food makers disclosing disappointing results, as its Hunt's tomato, Chef Boyardee and Marie Callender's frozen-food businesses hurt sales in the latest quarter.

Conagra's struggles come on the heels of a General Mills Inc. report Wednesday that showed sales of cereal and yogurt were flat and its snacks business declined.

The results from Chicago-based Conagra and General Mills provide fresh evidence that packaged-food makers still face a host of challenges in fixing their businesses, as consumers seek out new brands as well as food they think is healthier and fresher. Last month Kellogg Co. reported weak sales of cereal and grappled with a recall of protein bars. Kraft Heinz Co., meanwhile, is attempting to restart growth under a new chief executive.

Conagra said Thursday that sales excluding currency fluctuations and the effects of acquisitions declined 0.7% in its quarter that ended May 26. Overall sales totaled $2.61 billion, weaker than the $2.66 billion analysts polled by FactSet predicted.

Shares of the maker of Healthy Choice frozen dinners and Peter Pan peanut butter fell 9% in morning trading.

The company reported $757 million in sales in its Pinnacle business in the latest quarter, but said consumers purchased less of those products overall. Conagra said sales were in line with its expectations as it pursues a "value-over-volume" strategy at Pinnacle. Its brands include Birds Eye frozen foods and Hungry Man dinners.

Conagra bought Pinnacle last October to further tie the company to the freezer section of grocery stores, where consumers have been seeking out convenient meals. The company has previously said it would stop shipments of some Pinnacle products that had fallen out of favor with consumers.

In the grocery and snacks business, comparable sales fell 2.5%. Conagra reported gains from its snacking brands, but those were offset by weaker demand for Hunt's products and Chef Boyardee brands.

A recall of P.F. Chang's-branded products also weighed on results, Conagra said.

Profit rose to $126.5 million, or 26 cents a share, up from $69.6 million, or 18 cents a share, a year earlier. After adjustments for restructuring costs, impairments and certain other expenses, profit for the quarter of 36 cents a share fell short of analysts' targets.

For its 2020 fiscal year, Conagra said it anticipates 1% to 1.5% organic sales growth, a measure that strips out the effects of mergers and currency fluctuations.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

June 27, 2019 11:11 ET (15:11 GMT)

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