How Conagra’s Segments Performed in Fiscal 2018
Segments remain soft
Conagra sales remained soft across most of its product segments as lower volumes, mainly in the Grocery & Snacks, Foodservice, and International segments, more than offset the volume increase in the Refrigerated & Frozen segment through new product launches. Moreover, higher pricing and mix were more than offset by lower volumes owing to planned divestitures and overall tepid demand across the food industry.
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Segments in detail
Net sales for the company’s Grocery & Snacks segment fell 2% to $746 million. Lower volumes on account of the planned discontinuation of low-performing brands and pricing actions taken to optimize its portfolio negatively impacted the top line. Organic sales fell 5% for the segment, reflecting a 6% decline in volumes. However, the company’s recent addition of BIGS, Duke’s, and Frontera brands positively supplemented the segment’s sales growth by more than 3%.
Net sales for the Refrigerated & Frozen segment saw a trend reversal and improved 2% to $616 million. Management noted that the Frontera acquisition contributed 1% to the segment’s sales growth. Meanwhile, organic sales improved 1%, reflecting increased volumes driven by new and innovative product launches under Healthy Choice and Marie Callender’s trademarks. Pricing and mix remained flat during the quarter as increases in net pricing were offset by higher slotting investments to support new product launches.
Sales fell about 2% to $191 million in the company’s International segment. Meanwhile, organic sales fell 4% as lower volumes on account of promotion cutbacks and the discontinuation of slow-moving products affected the segment’s top-line growth. However, favorable pricing, efficient trade productivity, and currency tailwinds helped the segment’s sales during the quarter.
Net sales at the company’s Foodservice segment fell 6%, reflecting a steep decline in volumes owing to the planned divestitures, partly offset by strong pricing actions.