(Reuters) — ConAgra Foods Inc. estimated first-quarter profit below analysts’ expectations due to weak sales at its consumer foods business, which includes Chef Boyardee canned pasta, Hunt’s sauces and Slim Jim beef jerky.
ConAgra shares fell six percent to $31.56 in early trading on Tuesday on the New York Stock Exchange. The stock rose 14 percent this year to Monday close.
“(The company’s first-quarter performance) reflects the fact that they operate with a weaker brand portfolio relative to some of their larger branded packaged food peers,” Morningstar Inc. analyst Erin Lash told Reuters.
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ConAgra’s consumer foods business includes meals, condiments, snacks and desserts that are sold under brands such as ACT II popcorn and PAM cooking sprays.
The company operates in categories that are “ultra-competitive” and dominated by other big players, Lash said. She said the company also faces competition from lower-priced private label offerings.
The company’s rivals include General Mills Inc., Mondelez International Inc. and Hormel Foods Corp.
ConAgra said it is adjusting merchandising, promotion and pricing strategies to improve sales at its consumer food business. The company also said it is implementing cost management initiatives.
Omaha, Nebraska-based ConAgra estimated first-quarter adjusted earnings of 37 cents per share. Analysts on average were expecting a profit of 45 cents per share, according to Thomson Reuters I/B/E/S.
The company also cut its fiscal 2014 profit forecast to $2.34-$2.38 per share, down from $2.40 earlier and lower than the average analyst estimate of $2.41 per share.
