Commercial Foods Segment Specialty potato, seasonings, blends, flavors, and milled grain products sold to foodservice and commercial channels worldwide.
Sales for the Commercial Foods
segment were $1.26 billion, essentially in line with $1.27 billion a year ago. Segment operating profit was $130 million, 7% below year-ago amounts.
Lamb Weston potato products’ sales and profits were below year-ago amounts, as expected, given that a major foodservice customer did not renew a sizeable amount of potato business. Overall profits for the rest of Lamb Weston grew. Lamb Weston is in the process of expanding its business with other customers, and expects results to improve as the year progresses.
Flour milling operations posted growth in sales and operating profits, reflecting the pass-through of changing wheat costs as well as good product mix and efficiencies.
The company is currently preparing for the formation of Ardent Mills, into which the company expects to contribute its milling operations. The details of that transaction, which is expected to close in the fourth quarter of calendar 2013, were announced on March 5, 2013. While the company expects approximately $0.03 of EPS dilution this fiscal year, as previously discussed, due to the formation of the venture, over the long term, the venture’s profit growth is expected to be accretive to ConAgra Foods’ EPS.
Ralcorp businesses contributed a total of $942 million in sales and $82 million in operating profit for the fiscal first quarter, as reported. After adjusting for $1 million of net expense from items impacting comparability, operating profit was $83 million for the quarter. Because of the seasonality of Ralcorp sales and profits, contribution in the fiscal first quarter is generally the smallest of the fiscal year. The sales and profit results were slightly less than expected given the difficult retail customer environment. The company continues to expect approximately $0.25 per share of diluted EPS contribution, adjusted for items impacting comparability, this fiscal year from the Ralcorp businesses. The company currently reports Ralcorp results within two segments: Ralcorp Food Group and Ralcorp Frozen Bakery Products, listed as such in the segment detail later in this release.