OMAHA, Neb.--(BUSINESS WIRE)--Sep. 22, 2015-- Today ConAgra Foods, Inc., reported results for the fiscal 2016 first quarter ended August 30, 2015.
Overall Quarterly Results
For the fiscal 2016 first quarter ended August 30, 2015, diluted earnings per share from continuing operations were $0.38 as reported, vs. $0.22 for the first quarter of fiscal 2015. After adjusting for items impacting comparability, comparable diluted EPS was $0.45 this quarter and $0.39 in the year-ago period. Items impacting comparability are summarized toward the end of this release and reconciled for Regulation G purposes starting on page 10.
The private label operations have been reclassified as discontinued operations given the company’s plans to exit this business, and there is no longer a Private Brands segment. In connection with the pending divestiture, the company has also moved small amounts across segments, and this has slightly altered historical presentation of results.
Consumer Foods Segment
Branded food items sold worldwide in retail channels.
The Consumer Foods segment posted sales of approximately $1.7 billion and operating profit of $242 million, as reported. Sales were flat as reported, with flat volume, a 2% benefit from price/mix, and 2% unfavorable impact of foreign exchange (all rounded).
In fiscal 2016, the Consumer Foods segment is focused on continuing to strengthen its core business by emphasizing its highest-potential brands, focusing on the most promising sales channels, expanding margins, and getting more brands ready for stronger marketing support in the future. The segment is showing early progress.
- Brands posting sales growth for the quarter include Chef Boyardee, Egg Beater’s, Hebrew National, Hunt’s, Marie Callender’s, Orville Redenbacher’s, PAM, PF Chang’s, Reddi-wip, Ro*Tel, Rosarita, Slim Jim, Swiss Miss, and Wolf.
- Other brand details are in the written Q&A document accompanying this release.
Segment operating profit was $242 million versus $193 million in the year-ago period, as reported. After adjusting for $7 million of net expense in the current quarter and $10 million of net expense in the year-ago period from items impacting comparability, current quarter operating profit of $248 million increased 22% over comparable year-ago amounts. Advertising investment increased $5 million, or 7%. Comparable operating margin increased more than 250 basis points, reflecting the benefit of better price/mix as well as good productivity. The impact of foreign exchange negatively impacted profitability, while commodity inflation was not material this quarter.
Commercial Foods Segment
Specialty potato, seasonings, blends, flavors, and bakery products, as well as consumer branded and private label packaged food items, sold to restaurants, foodservice and commercial channels worldwide.
Sales for the Commercial Foods segment were $1.1 billion, ahead of $1.1 billion (rounded) a year ago, and operating profit was $139 million, ahead of $119 million a year ago, as reported. Sales for Lamb Weston’s potato operations grew globally, with domestic growth outpacing international growth. International sales are on track to return to normal levels in fiscal 2016 following the impact of the West Coast port labor dispute that was resolved last fiscal year. Sales for the rest of the segment were in line with year-ago amounts.
Segment operating profit grew 17% as reported and 13% after adjusting for items impacting comparability. All major business lines in the segment posted comparable profit growth. Lamb Weston made the most significant contribution to the segment’s profit increase, reflecting its strong sales performance, favorable mix, and operating efficiencies from good raw potato crop quality. Full report.
