• September 21, 2011

ConAgra Foods saw fiscal Q1 earnings drop 42% as a result of input costs, the company reported.

The company's overall sales rose 9.5%, and its consumer food sales gained 4.4%, but its cost of goods leapt 15%, pushing gross margin down from 23.2% to 19.5%.

ConAgra raised prices on 90% to 95% of its product portfolio in its fourth quarter.

It now has bumped up its estimate of cost inflation for its consumer foods segment this fiscal to to 9% to 10% (from 7% to 8%).

However, it has not changed its earnings outlook.

ConAgra, which has been looking to expand its private-label business, was disappointed earlier this week when Ralcorp rejected ConAgra's bid to buy the business for $5.2 billion, and also indicated that it is not interested in negotiating.--Karlene Lukovitz