Conagra Brands has declined to comment on a report the US food group has launched a process to offload its Chef Boyardee canned pasta brand.
According to Reuters’ unnamed sources, Chicago, Illinois-based Conagra has hired US investment bank Centerview Partners to explore a sale of Chef Boyardee in a deal that could fetch more than $500m.
Centerview Partners was the adviser to New York-listed Conagra when the group acquired Pinnacle Foods in 2018, inheriting brands such as Duncan Hines and the Gardein vegetarian line.
Chef Boyardee was part of Conagra’s stable at the time of that transaction and the brand has since expanded into frozen, pasta-based ready meals.
Conagra said it does not comment on “rumour or speculation” when approached by Just Food for clarification on the sale proposal today (5 December).
Reuters’ sources suggested potential buyers of Chef Boyardee include other packaged foods companies and private-equity firms.
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By GlobalData
The speculation on the brand’s disposal has emerged two weeks before Conagra reports its fiscal 2025 second-quarter results on 19 December.
Volumes were pressured in the opening three months of the year in what president and CEO Sean Connolly said remained a “challenging environment”, characterised by consumers continuing to seek value in private label.
Group reported sales were down 3.8% at $2.8bn and were 3.5% lower in organic terms, Conagra reported in October. Volumes dropped 1.6%.
In the company’s grocery and snacks segment, reported sales fell 1.7% and 1.9% at the organic level to $1.2bn. Volumes declined 1.8%.
For Conagra’s refrigerated and frozen business unit, both sales metrics decreased 5.7% to $1.1bn bot volumes edged up 0.1%.
The smaller international segment posted a 0.4% drop in sales to $259m, although organic sales rose 3%.
The out-of-home sector in the US has also faced sales pressures amid a slowdown in foot traffic, affecting food manufacturers supplying that channel.
Conagra’s first-quarter foodservice sales declined 7.8% to $267 million, with the organic component down by a larger 7.9%.
“Temporary manufacturing disruptions” in Conagra’s Hebrew National hot dog business also impacted the group results at the height of the barbeque season, to the tune of $27m.
Financial guidance for the full year was left unchanged, namely organic sales of flat to down 1.5%.
The adjusted operating margin was flagged at 15.6% to 15.8% after it rose 244 basis points to 14.2% in the first quarter.
Adjusted EPS was envisaged at $2.60 and $2.65. The profit metric was down 19.7% in the opening quarter at $0.53.
