Omaha, Nebraska based ConAgra Foods dramatically cut its full-year earnings outlook on Tuesday, citing continued weakness in its Private Brands business. ConAgra, now expects adjusted earnings of $2.22 to $2.25 a share for fiscal year 2014, which ends in May. Earnings for the third and fourth quarters are projected to be 60¢ and 65¢ a share, respectively, missing Wall Street expectations.
CEO Gary Rodkin stressed that ConAgra remains confident in its strategy to lift its private brands unit. The business was acquired through the $4.95 billion purchase of Ralcorp last year. “It is taking longer than expected to stabilize the performance of the private brands segment, which has been below plan because of pricing, sales force coverage, and customer service issues largely resulting from restructuring actions taken before we bought that business last year,” Rodkin explained.