the Conagra Brands company website,

BA301-006

Homework #2

Oct 17, 2017

Question 1

Based on what I found on the website, there are couple problems that the Conagra Brands is facing. First of all, On the Conagra Brands company website, in their first quarter report of this year, their “Net Sales decreased 4.8%, and organic net sales decreased 3.0%, reflecting continued sequential improvement. Investments in slotting fees increased year-over-year, to support innovation launches in the current year quarter. This higher level of investment negatively impacted the net sales and organic net sales growth rates by approximately 50 basis points and 42 basis points, respectively.” (Conagra Brands, 2017) From this data, it shows that they are having trouble with their marketing strategy. The reason of why they have this symptom is their organic food selling is not really successful as they planned, which wastes too much of their investment.

Second, according to the article “Business Brief — ConAgra Foods Inc.: Profit in Fiscal 3rd Period Fell 5.7% on 29% Drop in Revenue”, the Wall Street Journal presented that “ConAgra Foods Inc.’s fiscal third-quarter profit fell 5.7% as sales plunged 29%, reflecting weakness at its poultry business and the sale of its fresh pork and beef operations in September.” (Wall Street Journal, 2003) From this point, we can see that the Conagra Brands Inc is facing serious meat problems which caused this company profit decline. Furthrmore, based on the article “Consumer Products Brief — ConAgra Foods Inc.: Net Income, Sales Decline Following Sale of Businesses”, it showed an analysis of this company’s business sales, “ConAgra Foods Inc.’s fiscal first-quarter net income fell 14% as sales dropped sharply following the company’s sale of several businesses. The Omaha, Neb., packaged-foods company reported net of $194.9 million, or 37 cents a share, for the quarter ended Aug. 24, compared with $227.6 million, or 43 cents a share, a year earlier. The latest results included a loss of $11.7 million, or two cents a share, from an accounting change. In late June, the company said it expected first-quarter earnings to decline from year-earlier results because of a change in business mix and plans for concentrated marketing spending.” (Wall Street Journal, 2003) This reflects the company’s sales of its fresh meat, canned seafood and cheese during fiscal year 2003 and this is big gap in their marketing. Even though they sold a lot, their profit still declined. Therefore, this company could fix their marketing strategy and expand their acquisitions to improve their profit.

Third, Conagra Brands tried to sell their old brands to other company to gain more revenues, and they hoped to develop some new products to increase their sales. From the article “ConAgra Reduces Dividend, to Shed Seafood, Cheese”, it explained this company’s economic situation “The news sent Omaha, Neb.-based ConAgra’s shares down 91 cents, or 4.5%, to close at $19.50 in 4 p.m. composite trading on the New York Stock Exchange. The new quarterly dividend will be 18 cents a share, or 35% lower, starting June 1.” (Adamy, 2006) From this point, we can see that Conagra Brands Inc’s stock price continued declining. However, Conagra also illustrates their strategy to solve this symptom, “Chief Executive Officer Gary Rodkin said he wants to pare ConAgra’s sprawling portfolio of second-tier brands and spend more money marketing the company’s most-promising lines, including Healthy Choice meals, Chef Boyardee canned pasta and Pam cooking spray. “You can’t afford to waste resources,” Mr. Rodkin said in an interview. “The way to do that is have a more-focused portfolio.”(Adamy, 2006) This could help their declined sales and revenues, which caused many economic problems to this food processing company.

Bibliography

“Conagra Brands Reports Strong First Quarter.” Conagra Brands, Conagra Brands, Inc., 28 Sept. 2017, www.conagrabrands.com/news-room/news-conagra-brands-reports-strong-first-quarter-prn-122609. Web. 15 October 2017.

“Consumer Products Brief — ConAgra Foods Inc.: Net Income, Sales Decline Following Sale of Businesses.” Wall Street Journal, Sep 19, 2003, US Major Dailies; The Wall Street Journal, http://stats.lib.pdx.edu/proxy.php?url=http://search.proquest.com/docview/398849721?accountid=13265. Web. 16 October 2017.

“Business Brief — ConAgra Foods Inc.: Profit in Fiscal 3rd Period Fell 5.7% on 29% Drop in Revenue.” Wall Street Journal, Mar 28, 2003, pp. B.3, US Major Dailies; The Wall Street Journal, http://stats.lib.pdx.edu/proxy.php?url=http://search.proquest.com/docview/398805596?accountid=13265. Web. 17 October 2017.

Adamy, Janet. “ConAgra Reduces Dividend, to Shed Seafood, Cheese.” Wall Street Journal, Mar 17, 2006, pp. B.4, US Major Dailies; The Wall Street Journal, http://stats.lib.pdx.edu/proxy.php?url=http://search.proquest.com/docview/398945860?accountid=13265. Web. 17 October 2017.