CAG ConAgra Brands Inc

ConAgra Foods Inc. reported a steeper-than-expected sales decline in its latest quarter, dragged by weakness in consumer brands as it continues to reshape its business.

Shares declined 3.4% to $46 in premarket trading.

The Omaha company—which makes Hunt's tomato sauce, Swiss Miss hot chocolate and Peter Pan peanut butter—has like other traditional food companies worked to transform itself in response to shifting consumer preferences. ConAgra has sold its private label business for $2.7 billion, plans to cut jobs as part of a broad cost-cutting plan and is on track to spin off its Lamb Weston frozen-potato line this fall.

As customers increasingly reach for more fresh and natural foods, the company has developed a version of Peter Pan that is free of artificial colors and preservatives, and it has introduced an organic Hunt's ketchup.

In its most recent period, the company saw revenue in its consumer foods segment fall 12% from a year earlier as volume declined 4%. Its Banquet frozen meal line was a particular weak spot, though ConAgra said price increases there helped profit margins. Sales in its commercial foods segment, which includes Lamb Weston, fell 6% from a year earlier.

ConAgra noted that an extra week in the year-ago period hurt sales figures.

Over all, ConAgra reported a profit of $117.6 million, or 27 cents a share, down from $211.5 million, or 48 cents a share, a year earlier. On a continuing operations basis, the company swung to a per-share loss of 7 cents a share from a profit of 54 cents. Adjusting for items including a pension expense and restructuring costs, ConAgra earned 52 cents a share, down from 55 cents a year earlier.

Revenue slid 9.5% to $2.83 billion, hurt by the extra week in the comparable period.

Analysts projected 52 cents in adjusted earnings per share on $2.98 billion in revenue, according to Thomson Reuters.

ConAgra said that before its Lamb Weston spin off this fall, it would give financial projections for both companies.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

June 30, 2016 08:55 ET (12:55 GMT)

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