ConAgra Foods, Inc. today reported results for the fiscal 2012 first quarter ended Aug. 28, 2011.
Following are selected statements from the release deemed of interest for the potato- and food industry. Read the full news release
Diluted EPS from continuing operations was $0.20, including $0.09 per diluted share of expense from items impacting comparability. Adjusting for those items, diluted EPS from continuing operations was $0.29. For the same period a year ago, diluted EPS from continuing operations as reported was $0.32, and was $0.34 after adjusting for $0.02 of expense from items impacting comparability.
Gary Rodkin, ConAgra Foods' chief executive officer, said, "Despite a very challenging environment and high inflation, we delivered accelerating price/mix contribution and robust cost savings. The first-quarter EPS reflects the negative impact of short-term wheat market dynamics in our Commercial Foods segment and severe inflation in our Consumer Foods segment. We took pricing actions in the first quarter in both of our operating segments, and more pricing actions will soon be implemented in both segments. Our EPS goal for the full year remains unchanged."
Consumer Foods Segment (62% of first-quarter sales)
Branded and non-branded food sold in retail and foodservice channels.
The Consumer Foods segment posted sales of $1,892 million and operating profit of $196 million for the first quarter. Sales increased 4%, reflecting flat volumes and 4% contribution from price/mix. Additional increases are planned for the second quarter.
Brands posting sales growth for the quarter include DAVID, Healthy Choice, Hebrew National, Manwich, Marie Callender's, Orville Redenbacher's, PAM, Parkay, Peter Pan, Reddi-wip, Slim Jim, Swiss Miss, Wesson, and others.
- The company posted strong sales results for several key sales channels.
Operating profit of $196 million was 6% below last year's $208 million as reported. Restructuring charges of $16 million in the current quarter and $8 million in the year-ago period are included in reported results; adjusting for these amounts, current quarter operating profit of $212 million was 1% below $216 million in the year-ago period. The slight comparable operating profit decline reflects very high input cost inflation (approximately 11%) in the current quarter, which, as expected, more than offset strong cost savings and the benefit of pricing.
Because of pricing actions already taken, as well as additional pricing actions under way, the company expects this segment to post year-over-year operating profit growth, adjusted for items impacting comparability, in the second half of fiscal 2012.
Commercial Foods Segment (38% of first-quarter sales)
Specialty potato, seasonings, blends, flavors, and milled grain products sold to foodservice and commercial channels worldwide.
Sales for the Commercial Foodssegment were $1,180 million, 19% above year-ago amounts. Segment operating profit was $98 million, 14% below year-ago amounts; adjusting for $4 million of restructuring charges in the current quarter, the comparable year-over-year decline in operating profit was 10%.
The sales increase largely reflects the pass-through of higher year-over-year wheat costs in the form of higher flour prices for the milling operations. The sales performance also reflects Lamb Weston's price increases, which were necessitated by higher input costs, and volume gains. Lamb Weston's price/mix is expected to continue to improve throughout the balance of the year.
The segment's profit decline reflects the negative impact of wheat market dynamics related to the transition from the old crop to the new crop; this impact more than offset the benefits of mix and efficiencies throughout the segment. This segment is expected to post improved year-over-year profitability in the balance of this fiscal year, driven by improved performance at Lamb Weston.
Read the full news release