ConAgra Soars After Shift Away From Discounts Elevates Marginsby
ConAgra Foods Inc., the packaged-food giant that owns the Orville Redenbacher and Healthy Choice brands, saw its biggest rally in more than a year after higher-margin products boosted earnings.
Earnings from continuing operations rose to 61 cents last quarter, the company said on Thursday. Analysts estimated 48 cents on average. Sales came in below projections, but they were hurt by divestitures and currency fluctuations.
ConAgra has been working to spruce up its image under Chief Executive Officer Sean Connolly, who took the reins last year. It agreed to sell its private-label business to TreeHouse Foods Inc. and moved its headquarters from Omaha, Nebraska, to Chicago -- a bid to make the seller of Chef Boyardee a little more hip. The company also is relying less on discounts and promotions to drive sales.
“We’re focusing on practices that support value over volume and walking away from practices that concentrated on volume over value,” Connolly said on a conference call.
The shares jumped as much as 8 percent to $46.58 after the results were released, marking their biggest intraday gain since June 2015. Before the rally, the stock was up just 2.3 percent this year.