ConAgra is one of several packaged foods firms that has seen brands grow as consumers choose to eat at home more in an effort to economize. However, its commercial business – which provides food manufacturers and the food service sector – has suffered as people eat out less, with sales down 11 percent compared to a year earlier.
The company also revised its 2010 guidance upwards for the second time in three months to $1.73 per share, as it returned better-than-expected results for the quarter. In September, it had revised its guidance up to $1.70 per share, from a range of $1.63 to $1.66.
ConAgra Foods’ chief executive officer Gary Rodkin said: “Our strong performance this quarter reflects continued momentum in the Consumer Foods segment and gives us heightened confidence in our fiscal 2010 EPS outlook. Success with innovation and marketing drove significantly improved market shares and top-line progress in the Consumer Foods segment for the quarter, while a more favorable input cost environment and strong cost savings substantially contributed to profit growth.”
Profits for the company’s Consumer Foods segment grew 31 percent during the quarter, while volumes were up two percent, with much of this difference due to lower commodity costs. However, commodity prices impacted its Commercial Foods segment, which includes seasonings, dehydrated vegetables and milled grain products, and saw profits grow by just over one percent.
ConAgra’s overall sales were down from $3.25bn for the second quarter of fiscal 2009, to $3.17bn for the same period of fiscal 2010.