OMAHA — Consumer challenges and competitive activity led to a 42% drop in net income for ConAgra Foods, Inc. during the first quarter of fiscal 2014.
While net sales climbed 27% during the quarter, volume declines in the Consumer Foods segment reflected weak results in several categories, including frozen foods, as well as significant investments in new products.
“Our first-quarter Consumer Foods volumes were lower than planned due to category and customer challenges,” said Gary Rodkin, chief executive officer. “We are revising our merchandising and promotion plans to improve our volume, and we have already begun additional S.G.&A. cost management initiatives that should improve E.P.S. performance as the fiscal year progresses. We still expect to post good E.P.S. growth this fiscal year, and we are confident in our long-term E.P.S. growth and cash flow outlook as the sizeable synergies from Ralcorp are achieved over the next few years.”
For the quarter ended Aug. 25, net income attributable to ConAgra Foods was $144,300,000, equal to 34c per share on the common stock, compared with $250,100,000, or 61c, during the same period of the prior year.
Net sales for the quarter were $4,201,800,000, compared with $3,302,300,000 during the first quarter a year ago.
Operating profit for the Consumer Foods segment plunged 22% to $186,000,000 during the quarter, compared with $243,000,000 the previous year. Sales declined 2% to $1,995,900,000, compared with 2,033,000,000 a year ago. Brands posting sales growth during the quarter were ACT II, Egg Beaters, Hunt’s, Reddi-wip, Rosarita, Swiss Miss, Van Camp’s and Wesson.
Operating profit for the Commercial Foods segment fell 7% to $129,800,000, from $139,600,000 a year ago, reflecting the loss of a major food service customer of Lamb Weston potato products. Sales for the segment were $1,263,900,000, down slightly from $1,269,300,000 during the fourth quarter of the previous year.Businesses from Ralcorp contributed a total of $942,000,000 in sales and posted $82,000,000 in operating profit during the quarter.