ConAgra Foods, Inc. reported results for the fiscal 2014 second quarter ended Nov. 24, 2013. The consumer foods segment posted sales of approximately $2 billion and operating profit of $289 million, as reported. Sales were essentially flat, reflecting flat volumes and flat price/mix. The sequentially improved volume performance largely reflects changes in customer plans that resulted in replenished retail inventory levels prior to the holiday season. Ralcorp international sales are now part of this segment but not in year-ago amounts because of the date of the acquisition; contribution from this generated 1 percent favorable benefit to overall segment sales. The impact of foreign exchange negatively impacted segment sales by 1 percent.
Diluted earnings per share (EPS) from continuing operations of $0.54 as reported and $0.62 adjusted for items impacting comparability, up 4 percent as reported and up 9 percent on a comparable basis. The company implemented organizational changes during the quarter that resulted in new reporting segments. Historical amounts have been reclassified to conform to the new segment presentation. Consumer foods posted flat sales and a double-digit rate of growth in comparable operating profit. Commercial foods posted an increase in sales and a decrease in operating profit, as planned. The decrease in profit was expected due to previously disclosed customer transition issues in our Lamb Weston potato products business. The private brands segment includes most of the former Ralcorp businesses as well as the private label business previously reported within the consumer foods segment. The company continues to expect full-year diluted EPS to be in the range of $2.34 to $2.38, adjusted for items impacting comparability. Debt reduction and other capital allocation goals are unchanged.
Gary Rodkin, ConAgra Foods’ chief executive officer, said in a prepared statement, “We are pleased that our fiscal second- quarter EPS came in stronger than anticipated. Some of the EPS strength in the fiscal second quarter reflected some volume that we were expecting early in the fiscal third quarter, and we still expect good comparable EPS growth in the second half of fiscal 2014. Challenging industry conditions make us cautious about the near term, and our fiscal 2014 EPS guidance reflects this. Taking our strong second-quarter EPS performance and the industry environment into consideration, we are reaffirming our EPS goal in the range of $2.34 to $2.38, adjusted for items impacting comparability.”
