ConAgra Foods Inc. has posted a higher-than-expected quarterly profit as its consumer foods business benefited from price increases and cost cuts.
The company has sold off some units, such as a commodity trading and merchandising business, to focus on areas like consumer foods, which include brands like Healthy Choice frozen meals and Peter Pan peanut butter.
ConAgra has been trying to turn the consumer segment around by overhauling product lines and aiming to price products at points where it can cover commodity cost increases yet still attract shoppers.
Profit in the consumer segment, which represents 63 per cent of the company’s sales, rose six per cent in the latest quarter, excluding year-earlier restructuring charges.
Some analysts had been unsure of how well the business would do. Retailers are aggressively pushing their own brands, and frozen food competitors like Nestle’s Lean Cuisine are spending more to promote their products.
ConAgra has been trying to compete in that business with a revamp of its Healthy Choice line and new products in other brands.
A general lift in sales of packaged foods as consumers cook more at home is more than offsetting competition within individual categories, said Frost & Sullivan analyst Christopher Shanahan.