‘Manufacturing Disruption’ at a Hebrew National Plant Drags on Conagra Financials
A “manufacturing disruption” forced a pause in production at Conagra Brands’ Hebrew National hot dog plant in the middle of grilling season, affecting the company’s first-quarter financial results – which were not good.
CEO Sean Connolly reported the incident in the company’s earnings call with analysts Oct. 2. “While we were able to fully resume plant operations, the temporary manufacturing pause resulted in lost sales,” he reported. “Revenue for the Hebrew National brand was down 47% in Q1” [of Conagra’s FY 2025], which ended Aug. 25.
The plant is located in Quincy, Mich.
“When we became aware of the manufacturing issue, we paused production to get to the root cause of the problem,” a company spokesperson explained to Food Processing. “Getting it resolved to our satisfaction, however, took longer than we initially expected, which impacted inventories and sales in the middle of the grilling season. The issue was a piece of equipment that we identified and ultimately replaced. And we are now back up and running.”
The company did not provide specifics beyond that.
“We estimate that the majority of the impact of this disruption will be isolated to the first quarter,” Connolly said during the concall. He said the first quarter “continued to be a challenging environment.”
The quarter had mostly negative results. Sales decreased 3.8% to $2.795 billion. Adjusted earnings per share decreased nearly 20% to 53 cents. Every business category -- Grocery & Snacks, Refrigerated & Frozen, International and Foodservice – contributed to the sales decline.
The company reaffirmed its fiscal 2025 guidance, which was:
- Organic net sales down 1.5% to flat compared to fiscal 2024.
- Adjusted operating margin between 15.6% and 15.8%.
- Adjusted EPS between $2.60 and $2.65.
