ConAgra Foods Reports Lower Earnings For 2014 First Quarter

Sept. 20, 2013

ConAgra Foods, Inc., one of North America’s leading food companies, reported results for the fiscal 2014 first quarter ended Aug. 25, 2013. Diluted EPS (Earnings Per Share) from continuing operations was $0.33 as reported for the fiscal first quarter, down 46 percent from $0.61 in the year-ago period. Excluding $0.04 per diluted share of net expense in the current quarter, and $0.17 of net benefit in the year-ago period, from items impacting comparability, current-quarter diluted EPS from continuing operations of $0.37 was 16 percent below the comparable $0.44 earned in the year-ago period. Consumer foods’ sales and operating profit declined on a comparable basis, reflecting soft volumes and significant investment in new products. Ralcorp business performance is on track to contribute approximately $0.25 of diluted EPS from continuing operations in fiscal 2014, adjusted for items impacting comparability. Long-term synergy expectations from Ralcorp remain unchanged at $300 million by fiscal 2017.

Full-year diluted EPS is expected to be in the range of $2.34 to $2.38, adjusted for items impacting comparability. In terms of full-year EPS performance, the company expects a more favorable input cost environment, higher selling, general, and administrative (SG&A) cost savings throughout the remainder of the fiscal year as well as some volume recovery in the second half of the fiscal year, to offset a portion of the EPS softness seen in the fiscal first quarter. Debt reduction and other capital allocation goals are unchanged.

Gary Rodkin, ConAgra Foods’ chief executive officer, said in a prepared statement, “Our first-quarter consumer foods volumes were lower than planned due to category and customer challenges. We are revising our merchandising and promotion plans to improve our volume, and we have already begun additional SG&A cost management initiatives that should improve EPS performance as the fiscal year progresses. We still expect to post good EPS growth this fiscal year, and we are confident in our long-term EPS growth and cash flow outlook as the sizeable synergies from Ralcorp are achieved over the next few years.”

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