NEW YORK (AP) — ConAgra Foods Inc. posted a quarterly profit that came in a penny above Wall Street expectations Thursday, as the maker of Chef Boyardee, Hebrew National and other packaged foods benefited from acquisitions and price cuts helped boost sales of existing products.
The company, based in Omaha, Neb., has been pushing to expand its store brand unit and recently purchased one of the biggest players in the market, Ralcorp Holdings. ConAgra says there's big potential for store brands in the U.S. because supermarkets and other retailers see them as a way to keep costs in check and cultivate customer loyalty. And once shoppers try a store brand, they often don't go back to buying name brands even when the economy improves.
In its consumer food segment, the company said sales rose 7 percent, reflecting a 5 percent contribution from acquisitions and 3 percent volume growth from existing brands such as Banquet, Marie Callender's and Orville Redenbacher's. It noted that prices were lower this quarter than the year-ago period, when it had to raise them because of higher commodity costs.
Its commercial food unit, which supplies items such as french fries to restaurants and other food service outlets, saw sales increase 4 percent.
For the quarter, the company said it earned $192.2 million, or 45 cents per share. That's compared with a loss of $86.2 million, or 21 cents per share, in the year-ago period when it was weighed down by pension charges.
Not including one-time items, the company said it earned 60 cents per share, 1 cent more than Wall Street expected.
Revenue rose 34 percent to $4.59 billion, just shy of the $4.6 billion analysts were looking for, according to FactSet.
Looking ahead, ConAgra said it expects to grow comparable earnings per share by at least 10 percent from fiscal 2015 to 2017. It said that it now expects $300 million of annual pre-tax cost savings related to its Ralcorp business by the end of 2017, up from the $225 million it previously forecast.
ConAgra's stock rose 2 percent to $34 in premarket trading.