The first fiscal quarter of ConAgra Foods Inc. (NYSE:CAG) wasn't a good one, as the earnings of the company dropped 12 percent, with ConAgra citing tough competition, a weak economy, concerns over inflation and weak sales at the retail level.
Earnings for the quarter came in at $146.4 million, or 33 cents a share. That was down from $165.9 million, or 37 cents a share learning the same period last year.
Revenue also dropped in the quarter, although not dramatically, falling to $2.82 billion, or 2 percent. That was down from $2.89 billion last year. Analysts had been looking for revenue of $2.98 billion.
Chief Executive Office Gary Rodkin said, "Our fiscal first-quarter margins and EPS were lower than planned because of an intense promotional environment and inflation that outpaced cost savings. There were, however, several signs of strength in terms of market share and brand sales, demonstrating progress and growth potential for important parts of our portfolio."
The need to discount to move product was the primary reason for the poor performance, as the largest division of the company, the consumer food unit, dropped 2 percent in revenue to $1.82 billion.
Full year guidance was also lowered by ConAgra, from the former 8 percent to 10 percent growth to 5 percent to 7 percent growth. For the year that would be an earnings range of $1.83 to $1.86 a share.