ConAgra Foods, an American packaged foods company, is planning to exit its private label foods business as it looks to boost profit margins, cut costs and focus on its growing consumer foods and commercial foods segments.
The plans to exit private brands business come as the segment witnessed decline in operating profits after adjusting for items impacting comparability, and including the benefit of the extra week.
ConAgra Foods CEO Sean Connolly said: "As I have intensely studied the situation in our Private Brands operations over the last few months, it has become clear that the time and energy the company is devoting to the Private Brands turnaround represent a suboptimal use of our resources.
"To prevent further distraction, we are pursuing the divestiture of our Private Brands operations. Because the outcome of our strategic review for the Private Brands operations will influence our long-term financial outlook, we will wait until this process is complete before sharing long-term financial commitments."
However, the company's consumer foods and commercial foods businesses posted operating profit growth after adjusting for items impacting comparability during the same period for the fiscal 2015 fourth quarter ended 31 May this year.
ConAgra Foods' private brands segment offers private branded and customized food items in various retail channels, including grocery and convenience stores.
Its products include hot and ready-to-eat cereals; condiments; bars and coordinated categories; pastas; and retail bakery goods.
