ConAgra Foods is known to the vending industry as the parent company of Golden Valley Microwave Foods, GoodMark Foods and the convenience food and snack lines formerly marketed by International Home Foods. ConAgra reported record first-quarter sales and earnings for the period ending August 26, 2001.
First quarter earnings were $0.36 per diluted share, representing 44% growth over earnings of $0.25 per diluted share in the first quarter of fiscal 2001.
Sales increased 8% to reach $7.6 billion, and operating profit improved 20% to $528 million. The company's overall performance reflects strong food volume growth, a larger portfolio of value-added products due to the acquisition of several food brands late in the first quarter of fiscal 2001, and more favorable market conditions for some business units.
Results for the first quarter of fiscal 2001 included a $0.09 charge per diluted share from the cumulative effect of changes in accounting principles; excluding this charge, earnings for the first quarter of fiscal 2002 increased 6%.
The company's food business showed substantial growth in sales and profits. Sales grew 11% to reach $5.6 billion and operating profit improved 30% to reach $407 million.
Sales for the company's Packaged Foods segment grew 32% to reach $2.2 billion and operating profit improved 31% to reach $265 million. Sales and profit growth reflect the acquisition of several branded food products late in the first quarter of fiscal 2001 as well as improving trends for several of the company's large brands, including Hunt's, Healthy Choice, Chef Boyardee, Marie Callender's, Slim Jim, Act II, Bumble Bee, PAM, Parkay and others. Enhanced marketing and new product investments made over several prior quarters contributed to the strong performance.
This quarter's performance also reflects significant progress with combined channel selling, in which the company bundles a selection of products as a group for major retail promotion themes or foodservice menu events.
While gains were achieved in many product groupings sold to retail consumers, recent economic factors negatively impacted the foodservice-focused business unit, which includes such products as French fries, specialty meats, seafood and tortillas, during the quarter. Compared with overall performance over the past several quarters, the foodservice-focused products generated a slower rate of sales and profit growth.
Sales for the Refrigerated Foods segment grew 1% to $3.5 billion and operating profit increased 29% to $142 million. Despite higher input costs, the company's branded processed meats business posted solid profit growth. ConAgra's fresh pork business showed sales and profit gains due to more favorable marketplace conditions. The company's poultry operations showed significantly increased profitability due to a better market environment for poultry products as well as operating improvements resulting from targeted efficiency projects, but below last year's levels due to less favorable marketplace dynamics during the quarter.
Sales for the company's Agricultural Products segment remain unchanged at $2 billion, while operating profit declined 4% to $121 million.
"We are off to a good start for fiscal 2002, and remain slightly ahead of our original expectations for the year," said Bruce Rohde, chairman and chief executive officer. "Product, marketing and operational investments made in prior periods, as well as more favorable operating environments for some of our businesses, are positively impacting our profits'We provide products that are essential to life. While the current economic environment is filled with uncertainty and may impose disruption in terms of where and what types of food people eat, we have variety across our product portfolio and strong channel representation that will serve our customers and shareholders in these times. We continue to plan for overall single-digit EPS gains, with those gains apparent in the second half of the year."