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ConAgra Unveils New Restructuring Plan, to Relocate HQ

Premium processed & packaged goods company ConAgra Foods, Inc.CAG is all set to boost its economic surplus as well as commercial growth with the help of newly formulated restructuring programs. Backed by strategic operational enhancement programs and cost-saving plans, the company aims to drive profitability and unlock shareholders' value, by realizing a minimum of $300 million in savings over the next three years.

Supported by its profitability enhancement program, ConAgra expects to save roughly $200 million through a combination of non-headcount expenses and lesser headcounts. At the same time, the company anticipates realizing almost $100 million through improvement in tools and processes.

The company intends to cut nearly 1,500 jobs as part of its current restructuring scheme that involves decreasing its global workforce by almost 30%. However, the impact of ConAgra's private segment divestiture has not influenced this layoff plan.

At the same time, ConAgra has decided to relocate its headquarters to Chicago's Merchandise Mart. This move toward a prominent business center is aimed at capturing more talented and productive human capital, so as to better implement the company's innovation-based growth strategy, going forward. Nevertheless, even after shifting the headquarters, the company would continue with its supply-chain and research-oriented activities in Omaha.

Moving Ahead

ConAgra is one of the leading food companies in North America, catering to grocery retailers, restaurants and other foodservice establishments, with a popular presence in 97% of American households. At the end of the first three months in fiscal 2016, the company's earnings comfortably surpassed both the year-ago tally and the Zacks Consensus Estimate by 15.4%.

ConAgra believes that its latest strategic restructuring plans would help further accelerate its earnings in the upcoming quarters. The company plans to finance its future growth and innovative agendas with the savings generated from the ongoing cost-cutting measures scheduled till fiscal 2018.

Stocks to Consider

ConAgra presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Cal-Maine Foods, Inc. CALM , Omega Protein Corporation OME and Tate & Lyle plc TATYY . All three stocks sport a Zacks Rank #1 (Strong Buy).

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CONAGRA FOODS (CAG): Free Stock Analysis Report

CAL-MAINE FOODS (CALM): Free Stock Analysis Report

OMEGA PROTEIN (OME): Free Stock Analysis Report

TATE & LYLE ADR (TATYY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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