ConAgra Foods intends to divest its private label operations and focus on a more aggressive cost-cutting strategy, growing the Consumer Foods segment and Lamb Weston (within the Commercial Foods segment).
With an operating loss of USD 25 million, due to impairment and restructuring charges and a comparable operating profit down 30%, the private label segment in ConAgra Foods’ portfolio has been struggling in the past years, which is why the move to divest it altogether is seen by the company as step to “prevent further distraction”.
“As I have intensely studied the situation in our Private Brands operations over the last few months, it has become clear that the time and energy the company is devoting to the Private Brands turnaround represent a suboptimal use of our resources. To prevent further distraction, we are pursuing the divestiture of our Private Brands operations. Because the outcome of our strategic review for the Private Brands operations will influence our long-term financial outlook, we will wait until this process is complete before sharing long-term financial commitments”, said Sean Connolly, chief executive officer of ConAgra Foods.