ConAgra also expects earnings per share will rise in the low single digits, from prior guidance of a 5 percent to 7 percent gain from a year ago, when the company earned $1.74 per share.
Similar to ConAgra, Campbell Soup Co. said last month its second-quarter net income fell 8 percent as heavy promotional spending in the quarter didn't spur sales as expected.
OMAHA, Neb. – ConAgra Foods Inc. said Thursday its second-quarter and full-year earnings will come in lower than expected due to poor customer response to discounts and higher ingredient costs.
Early repayment of a debt resulted in lower interest income,wholesale clothing bags cheap website shoping, hurting fiscal year results by 3 cents to 4 cents per share.
ConAgra now expects second-quarter earnings will be 45 cents per share, down from 54 cents per share a year ago. Previously it forecast a "modest decline" from a year ago. Analysts polled by Thomson Reuters, on average, expected earnings of 50 cents per share.
In addition to tough competition, poor response to discounts and higher food costs, ConAgra said weak profit from its Lamb Weston specialty potato unit hurt results.
ConAgra said it has several strategies to increase its operating profit in the second half of the fiscal year, including raising prices, offering more new products and products from acquisitions, cutting costs and improving Lamb Weston's profitability with a higher-quality potato crop that it is processing.
As consumers cut back, manufacturers and retailers have discounted their products more heavily to drive sales. But that strategy can punish profits, especially if consumers don't respond as expected.
ConAgra plans to release its second-quarter results on Dec. 21.
The warning sent shares of the maker of Chef Boyardee and Healthy Choice products down 69 cents, or 3 percent, in premarket trading to $21.56.
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