Marie Callendar’s and Healthy Choice maker ConAgra Foods said it expects volumes trends to improve in the coming months, as it posted second quarter results ahead of analysts’ expectations.
Omaha-based ConAgra Foods is organized into two businesses: Consumer Foods, which sells grocery brands such as Healthy Choice and Egg Beaters; and Commercial Foods, which supplies specialty products to foodservice and manufacturing customers including frozen potato products, flours and Spicetec flavors and seasonings.
In the quarter ended Nov 25, it posted a 17.4% rise in profit to $211.6m on sales up 9% to $3.74bn, beating analysts’ expectations.
Sales in Consumer Foods increased 11%, with an 11% contribution from acquisitions and 4% favorable price/mix, offsetting a 4% organic volume decline.
Sales in the Commercial Foods segment were up 5% reflecting a strong performance in the Lamb Weston potato operations and the pass-through of higher wheat costs via higher flour prices in its milling operations.
Ralcorp deal: We understand where branded foods and private label need to be separate
Speaking to analysts on a conference call this morning, chief executive Gary Rodkin said: “We expect volume trends to continue to improve sequentially this [fiscal] year.”
Asked about the recent $6.8bn acquisition of private label giant Ralcorp, he said: "We understand where the two types of business [branded foods and private label] need to be separate and where they can be combined for efficiencies.
"We respect the differences between the two types of businesses and we will find the right balance."