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ConAgra Foods, Inc., (NYSE: CAG) one of North America’s leading food companies, today reported results for the fiscal 2014 second quarter ended Nov. 24, 2013. Diluted EPS from continuing operations was $0.54 as reported for the fiscal second quarter, up 4% from $0.52 in the year-ago period. Excluding $0.08 per diluted share of net expense in the current quarter, and $0.05 of net expense in the year-ago period, from items impacting comparability, current-quarter diluted EPS from continuing operations of $0.62 was 9% above the comparable $0.57 earned in the year-ago period. Items impacting comparability are summarized toward the end of this release and reconciled for Regulation G purposes on page 11.
Gary Rodkin, ConAgra Foods’ chief executive officer, said, “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-$2.38, adjusted for items impacting comparability.”
Consumer Foods SegmentBranded food items sold worldwide in retail channels.
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% favorable benefit to overall segment sales. The impact of foreign exchange negatively impacted segment sales by 1%.
Brands posting sales growth for the quarter include Hebrew National, Hunt’s, Marie Callender’s, Reddi-wip, Ro*Tel, Rosarita, Slim Jim, Wolf, and others. More brand details are in the Q&A document accompanying this release.
Over the last few weeks, the company has seen improved consumption trends for some key brands in response to recent merchandising programs.
Operating profit of $289 million was 13% above year-ago amounts as reported. After adjusting for $4 million of net expense in the current quarter and $6 million of net expense in the year-ago period from items impacting comparability, current quarter operating profit of $293 million increased 11% over comparable year-ago amounts. The comparable profit growth reflects manageable inflation, supply chain productivity initiatives, and a strong focus on selling, general, and administrative (SG&A) related efficiencies. Advertising and consumer promotion costs declined year-over-year, reflecting heavy investment a year ago, rebalancing spending to strengthen promotional support, and a focus on productivity.