Conagra Brands Announces Robust Growth, Acquires Sandwich Bros. of Wisconsin^®

This week, Conagra Brands, Inc. reported strong second quarter sales and announced the prospective acquisition of the Milwaukee-based Sandwich Bros. of Wisconsin. A few highlights of the brand’s fiscal success this quarter are as follows:

• General net sale grew 4.1% and organic net sales grew 2.3%
• Diluted earnings per share from continuing operations grew 107.7 percent from $0.26 to $0.54
• The Refrigerated & Frozen segment experienced a 4% volume growth

“One year after becoming a pure-play, branded-food company, Conagra is growing again,” said Conagra Brands President and CEO, Sean Connolly, in a press release about the company’s recent success. “Our work to upgrade the quality of our revenue base and rebuild our innovation pipeline is bearing fruit, particularly in our frozen business, where we put much of our year-one focus. Better than expected top-line performance through the second quarter is enabling us to invest more in our U.S. retail business to enhance distribution, merchandising, and consumer trial of our brands – especially where we have new renovation or innovation. Accordingly, we are updating our fiscal 2018 organic net sales and EPS guidance to near the high end of their respective ranges.”

In addition to Conagra’s financial growth, the company also announced that it has entered into a definitive agreement to acquire Sandwich Bros. The sandwich provider will join recently-acquired Angie's Artisan Treats, maker of Angie's BOOMCHICKAPOP, in the family of Conagra brands.

Connolly said of the acquisition, “Adding the Sandwich Bros. business to our portfolio is another step in Conagra Brands’ ongoing work to accelerate growth…This acquisition will bring Conagra unique capabilities and expertise within the frozen handheld category, which we look forward to leveraging for further growth and extension into additional Conagra brands.”

Reportedly, this acquisition will be highly beneficial to Congara; the Sandwich Bros. netted approximately $60 million in sales this past year. Sandwich Bros.’ Founders–President Salem Kashou and company Co-Owner George Kashou–noted that they are proud of the work they have done for the company and are happy to share it with Congara.

“We are very pleased with Conagra’s shared enthusiasm of Sandwich Bros. and know they have the resources and expertise to continue our legacy,” said co-owner Kashou. “Our incredible growth over the past five years is attributed to the contributions from our loyal employees, business partners, and consumers. For that, my brother John and I express our sincerest gratitude.”

As a result of its continuing success and expansion, Conagra has updated its fiscal guidance as follows:

• Organic net sales growth near the high end of the range of (2)% to flat.
• Reported net sales growth is expected to be 100 to 150 basis points higher than the organic net sales growth rate due to the impacts of acquisitions and foreign exchange.
• Adjusted operating margin near the low end of the range of 15.9% to 16.3%.
• Adjusted diluted EPS from continuing operations near the high end of the range of $1.84 to $1.89.

To keep up-to-date on Conagara’s continued success and the transaction's progress through early next year, stay tuned to Deli Market News.