ConAgra Foods reported results for the fiscal 2016 second quarter ended November 29, 2015. Diluted EPS from continuing operations as reported was $0.37, compared with $0.49 in the year-ago period.
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After adjusting for items impacting comparability, diluted comparable EPS of $0.71 this quarter was ahead of $0.61 in the year-ago period; these amounts include contribution from discontinued operations in both periods.
As expected, fiscal second quarter diluted comparable EPS of $0.71 includes approximately $46 million of pretax benefit, or $0.07 per diluted share of after-tax benefit, from the absence of depreciation and amortization for the private label operations which are being divested. As discussed in the fiscal first quarter, this is a result of these assets being classified as held for sale.
Consumer Foods posted double-digit operating profit growth, as the benefit of favorable price/mix, strong net productivity, and lower commodity input costs more than offset increased marketing investment and the unfavorable impact of foreign exchange.
Commercial Foods posted double-digit operating profit growth, largely on the strength of Lamb Weston’s international volumes as well as lower product costs.
During the quarter, the company announced plans to:
Generate $300 million of annual efficiency improvements by the end of fiscal 2019, reflecting $200 million of expected SG&A savings and $100 million of trade spend reduction,
Relocate its corporate headquarters from Omaha, NE to Chicago, IL, and
Separate into two independent pure play companies, Conagra Brands and Lamb Weston. The transaction is expected to be structured as a spinoff of the Lamb Weston business, tax free to the company and its shareholders, in the fall of calendar 2016.
Prior to the spinoff, each company will host an investor day to outline financial goals and priorities.
The previously announced sale of the company’s private label operations (classified as discontinued operations) to TreeHouse Foods, Inc. is on track and expected to close in the first quarter of calendar 2016. ■
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