Conagra has reported a 30.3% net sales growth in the first quarter of the fiscal year 2020, which ended on 25 August 2019, due to the acquisition of Pinnacle Foods.
Conagra purchased Pinnacle Foods last year, in a bid to expand its presence in the frozen food market. The US packaged foods giant’s net sales can be broken down as follows:
- 35.8% increase from the acquisition of Pinnacle
- 3.5% net decrease from the divestitures of business such as Wesson oil and Canadian Del Monte
- 0.1% decrease from the impact of foreign exchange
- 1.7% decrease in organic net sales
Conagra also reported net sales growth across all of its business segments including Refrigerated & Frozen, Grocery & Snacks, International & Foodservice.
With a portfolio that includes brands such as Birds Eye, Slim Jim, and Hunt’s, Conagra posted a gross profit rise of 28.9% to USD665m. Adjusted operating profit increased by 16% to USD207m. This growth was mainly driven by the next impact of the addition of Pinnacle’s gross profit and cost synergies. Additionally, it was revealed that since the acquisition completion, the company has reduced by over USD1bn.
Net sales for the whole Refrigerated & Frozen segment increased 51% to USD959m in the quarter with the acquisition of Pinnacle adding 51.6% to the net sales growth rate and the divestiture of the Gelit business subtracting 2.1%. Organic net sales increased by 1.5%. On an organic net sales basis, volume increased by 0.2$% and price/mix increased by 1.3%. The segment benefited from solid performance across multiple brands including Banquet, Healthy Choice, P.F. Chang’s, Reddi-wip, and Sandwich Bros.
Additionally, the Birds Eye business launched several new products that are expected to benefit to benefit the second-half organic net sales growth rate as they build in-market distribution and velocity.
Operating profit for the segment increased 63% to USD156m in the quarter, and adjusted operating profit increased 80.2% to USD172m. The increase was primarily driven by the addition of Pinnacle’s profit and cost synergies.
