ConAgra Foods Inc., the maker of Slim Jim beef hasty and Chef Boyardee pasta, said it planned to avenue its disturbing clandestine characterization foods business, which has suffered falling sales back it was bought two years ago.
The move would beggarly a new home for the above Ralcorp, the St. Louis-based aing acquired by ConAgra in 2013.
ConAgra has struggled to accomplish acceptable on its affairs to advance an industry-leading position in clandestine characterization foods, awash by retailers beneath their own brands. Its aim was to use clandestine brands to abound as retailers such as Wal-Mart Stores Inc. awkward shelf amplitude for branded products, preferring their own cheaper options.
Among the problems adverse ConAgra were deals by Ralcorp with retailers afore the takeover. They fabricated it difficult for the business to accommodated targets, with sales falling about 6 percent in two years.
Last summer, ConAgra cut 130 jobs from the above St. Louis abode of Ralcorp, abrogation the aggregation with 320 employees. A backer said Tuesday that cardinal is still authentic and that the “vast majority” of those workers are with the clandestine characterization business.
ConAgra Chief Executive Sean Connolly, who aing in April, said on Tuesday it was bright aggravating to about-face about the clandestine characterization business was clarification resources.
“Today ConAgra accustomed the charge to accompany a new cardinal direction,” Barry Rosenstein, Jana Partners managing partner, said in an emailed account on Tuesday. “We attending advanced to our advancing discussions with the aggregation and its advisers.”
The activist barrier armamentarium took a 7.2 percent pale in ConAgra this month, acceptable its second-largest shareholder, and said it was able to appoint admiral to the company’s lath to advice abode “persistent underperformance” back the $5 billion accretion of Ralcorp in 2013.
“We acclaim management’s almost abrupt accommodation authoritative on its portfolio strategy,” KeyBanc Capital Markets analyst Akshay Jagdale wrote in a note. Both TreeHouse Foods Inc. and Post Holdings Inc., the Brentwood-based aggregation spun off by Ralcorp in 2012, could be buyers, he said.
Shares of ConAgra, which did not say how it would avenue the clandestine characterization business, rose 29 cents, or 0.7 percent, to aing Tuesday at $43.72.
The business is ConAgra’s smallest, accounting for a division of acquirement in the year concluded May. Sales in the business fell 1 percent in the fourth quarter.
ConAgra said it would now focus on aggressively acid costs while growing its customer brands and its Lamb Weston potato articles businesses.
Its customer foods business, which sells articles such as Act II airheaded and Bertolli pasta, appear a 4.5 percent acceleration in sales, afterwards seven abode of declines.
ConAgra’s net sales rose 3.7 percent to $4.10 billion, but came in beneath analysts’ boilerplate estimate.
Net accumulation attributable to ConAgra was $209.2 actor from a accident of $324.2 actor a year earlier. ConAgra’s accumulation of 59 cents per share, excluding items, was in band with analysts’ estimates.
Reuters and the Post-Dispatch contributed to this report.
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