ConAgra Foods, Inc., (NYSE: CAG) one of North America’s leading food companies, today reported results for the fiscal 2014 fourth quarter ended May 25, 2014. Diluted loss per share from continuing operations was $(0.76) as reported for the fiscal fourth quarter vs. diluted EPS of $0.45 in the year-ago period. After adjusting for items impacting comparability, current-quarter diluted EPS of $0.55 was 8% below the comparable $0.60 earned in the year-ago period. Items impacting comparability are summarized toward the end of this release and reconciled for Regulation G purposes on pages 12-13.
Gary Rodkin, ConAgra Foods’ chief executive officer, said, “We are disappointed with fiscal 2014 overall, and we have a very focused sense of urgency directed toward improving our results. Despite the difficult year, we were able to generate substantial cash, meet our debt reduction commitments, and pay a strong dividend.”
He continued, “Our focus is on improving branded volumes through more effective trade, marketing, and resource allocation, particularly on several large underperforming brands. We expect private brand profitability to strengthen through organic growth, strong synergies, and gradually improving price/mix. Some of the challenges from fiscal 2014 will still be with us in fiscal 2015, although we believe results will gradually improve throughout the fiscal year. Given that, we consider fiscal 2015 to be a year of stabilization and recovery with a mid-single digit rate of EPS growth, which we expect to accelerate in fiscal 2016 and 2017 based on a stronger foundation. Throughout this period, we expect to benefit from strong productivity, robust cost synergies related to the Ralcorp acquisition, and SG&A efficiency and effectiveness initiatives. We will remain focused on growing our top line, continually improving our cost structure, and sound capital allocation.”
Consumer Foods SegmentBranded food items sold worldwide in retail channels. The Consumer Foods segment posted sales of approximately $1.8 billion for the quarter and operating profit of $177 million as reported. Sales declined 7%, with a 7% volume decrease, 1% favorable price/mix, and a 1% unfavorable impact of foreign exchange.
- While several brands posted weak volumes in the quarter, a meaningful portion of the overall volume decline was driven by Healthy Choice, Orville Redenbacher’s and Chef Boyardee (these collectively have annual sales in excess of $1 billion), which have continued to face volume and profit challenges. The company has product and promotion changes, as well as refinements to consumer communication under way, which are expected to gradually improve the volume and profit performance of these brands throughout fiscal 2015.
- Overall category softness, as well as a shift in the timing of promotions, negatively impacted current quarter volumes.