ConAgra lowers near-term guidance
OMAHA, Neb. – Challenges in the Consumer Foods and Commercial Foods segment prompted ConAgra Foods, Inc. to lower its earnings per share guidance for fiscal 2014. ConAgra revised its diluted earnings per share outlook to approximately $2.22-$2.25, down from previous guidance of $2.34-$2.38 EPS.
The company attributed the revision to weaker-than-expected sales for a few brands in the Consumer Foods Segment, and margin pressures in the Commercial Foods segment driven by "customer mix challenges" and poor potato crop quality. ConAgra
had forecasted the Ralcorp to contribute approximately 25 cents to EPS in fiscal 2014. The company now estimates that number to be approximately 20 cents. Additionally, volumes for the Consumer Foods segment were expected to decline 1-2 percent in the second half of fiscal 2014. ConAgra now puts that decline at 3-4 percent.
ConAgra also noted it was taking longer than expected to turn around its Private Brands segment. Gary Rodkin, CEO of ConAgra Foods, said forecasting fiscal 2014 was very difficult.
“We are intensely focused on improving our business,” said Gary Rodkin, CEO of ConAgra Foods. “It is taking longer than expected to stabilize the performance of the Private Brands segment, which has been below plan because of pricing, sales force coverage, and customer service issues largely resulting from restructuring actions taken before we bought that business last year. We view these as near-term issues only, and remain fully confident in our private brands strategy and the growth opportunities resulting from the recent acquisition of Ralcorp.”