Maker of Slim Jim, Healthy Choice slashes dividend 50% as turnaround begins
New Conagra Brands chief executive John Brase, who took the helm at the Chicago food company last month, outlined plans Wednesday to raise prices across a range of products and cut underperforming brands from the company’s portfolio after Conagra reported a $1.62 billion quarterly loss and slashed its annual dividend by 50%.
The maker of Slim Jim, Healthy Choice and Hebrew National has seen its share price slide 26% over the past year, Brase said, as budget-conscious shoppers tighten their budgets and trade down in the grocery aisle. Conagra’s turnaround plan includes $40 million in new brand investment targeting frozen meals and meat snacks, two areas Brase identified as growth drivers.
“I grew up in Missouri. I’m a show-me guy,” Brase said in an interview with The Wall Street Journal. “Every SKU has to earn its keep.”
Brase said the company carries roughly 5,500 grocery items and plans to review each one for consumer demand and profitability. “We’ve got so many great gems in the portfolio but there is so much noise around it with a lot of brands, and complexity gets in the way at times,” he said. “There’s a lot of opportunity to clean up the portfolio and put more support behind brands to drive profitability.”
The company intends to raise prices on frozen meals, vegetable spreads (the company’s margarine business), meat sticks, Tennessee Pride sausage and Hebrew National hot dogs — categories where Brase said the company is hit hardest by inflation.
“Like every center-store consumer packaged goods company, finding the balance between volume and margins is critical,” Brase said. “There’s no silver bullet.”
“Our job is to stay ahead of the curve and meet consumers where they are,” Brase said. “If we’re going to play an important role in consumers’ lives today and moving forward, we have to be agile. The consumer is going to continue to be demanding and seek value, and our job is to deliver.”