ConAgra Foods today (22 March) reported a jump in quarterly profits but the US food maker revealed underlying sales from its consumer division were flat as falling volumes offset prices hikes.
The company, which owns brands including Orville Redenbacher popcorn and Marie Callender’s pies, said net income was up 26.4% at US$271.6m in its third quarter to 26 February.
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Total operating profit from its two segments – consumer and industrial foods – increased 15.5% to $481.3m.
Operating profit from both divisions was up on a reported basis. However, underlying operating profit from ConAgra’s consumer foods unit, which excluded restructuring charges and a gain from its acquisition of increased stake in Indian firm Agro Tech Foods, fell 6% to $280m. ConAgra blamed “very high” input cost inflation, which it said was 11% in its third quarter.
Underlying sales from ConAgra’s consumer foods business were flat. Recent acquisitions and better prices and mix meant sales rose 4% to $2.16bn. However, excluding the company’s M&A activity, sales stayed at last year’s level as a fall in volumes offset the price/mix effect.
“Conditions have been difficult across the industry due to high inflation and soft volumes for retail consumer food brands,” CEO Gary Rodkin said.
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By GlobalDataSales from ConAgra’s commercial foods unit increased 14% to $1.22bn thanks to a rise in commodity prices and higher volumes from its Lamb Weston potato division.
ConAgra maintained its forecast for full-year earnings. It expects earnings per share to increase by a “low- to mid-single digit” rate.
Shares in ConAgra were down 0.55% at $26.22 at 15:29 ET.
