ConAgra Foods has insisted that its growth momentum is sustainable after the US food group posted an increase in profits, excluding one time items, during its fiscal first quarter.
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For the quarter ended 30 August, profit fell to US$165.9m from $442.4m a year earlier, when profits were inflated by the sale of assets.
Excluding one-time items, earnings were $0.38 a share, compared with $0.23 cents from continuing operations a year earlier, the maker of Chef Boyardee said yesterday (22 September).
Although sales dipped 3.3% to $2.96bn, ConAgra said that the fall was primarily the result of an explosion that disrupted production at its Slim Jim factory in North Carolina.
“The Slim Jim numbers, particularly as it pertains to convenience store, is a significant hit in that overall channel because we just couldn’t supply,” CEO Gary Rodkin told analysts during a conference call.
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By GlobalDataAccording to Rodkin, ConAgra’s takeaway numbers were “meaningfully” greater than shipment numbers, reflecting the “momentum” in the company’s business and the “depletion of inventory” at both a customer and consumer level.
“We feel very comfortable that [takeaway and shipment levels] will meet at some point. But the momentum in the business is very, very good,” Rodkin insisted.
ConAgra management highlighted the strong performance of its Healthy Choice brand since its relaunch, with both trial and repeat customer numbers ahead of targets and the natural line exceeding the company’s own “high expectations”.
The group said that it had made – and would continue to make – good progress on productivity, boosting profitability.
“We feel very, very good about the momentum and the trends in our productivity being very, very sustainable. We’ve got a very long runway and I think you will see us continue to put really good numbers up there,” Rodkin revealed.
