ConAgra to Spin Off Frozen Unit; Lowe's, Target Profit Jump

Mukesh Buch
18 Nov, 2015
New York City

ConAgra plans to spin off its frozen potato business and restructure. Aramark net jumped 28% but sales declined 10%. Lowe''s profit soared 26%. La-Z-Boy net soared 9%. Staples net plunged 9%. Target lifted earnings forecast and quarterly net surged 56%.

[R]10:45 AM New York – ConAgra plans to spin off its frozen potato business and restructure. Aramark net jumped 28% but sales declined 10%. Lowe''s profit soared 26%. La-Z-Boy net soared 9%. Staples net plunged 9%. Target lifted earnings forecast and quarterly net surged 56%.[/R]

Tollbooth Index increased 54.24 or 0.5% to 10,835.24.

Earnings Review

Aramark, formerly ARAMARK Holdings Corporation soared 8% or $2.48 to $32 after the food and uniform services provider said sales in the fourth-quarter ending on October 2declined 10.1% from a year ago to $3.55 billion.

Net income in the quarter jumped 28.2% to $56.9 million or 23 cents per diluted share compared to $44.4 million or 18 cents per share from the same quarter last year.

Aramark estimated earnings per share for the fiscal 2016 in the range of $1.65 to $1.75.

ConAgra Foods Inc ((CAG)), the packaged food maker plans to spin off its frozen potato products under the name of Lamb Weston.

The deal will be structured as a tax-free spin-off and consumer brands business will be renamed as Conagra Brands, Inc.

For fiscal 2015, Lamb Weston generated revenues of about $2.9 billion and in the commercial foods segment revenues generated about $1.8 billion.

The company also plans to reduce 1,500 jobs and shifting the headquarters to Chicago to trim the annual budget of $300 million.

The transaction is expected to complete in the fall of 2016.

Jack in the Box Inc ((JACK)) increased 2.6% or $1.82 to $71.81 after the restaurants operator said total revenues in the fourth-quarter ending on September 27 rose 2.7% from a year ago to $354.1 million.

System-wide same-store sales in the quarter soared 6.2% and company same-store sales jumped 4.1%.

Net income in the quarter soared 42.6% to $23.1 million or 63 cents per diluted share compared to $16.2 million or 40 cents per share from the same quarter last year.

Lowe''s Companies, Inc ((LOW)) rose 46 cents to $73.31 after the home improvement retailer reported sales in the third-quarter ending in October jumped 5% from a year ago to $14.36 billion.

Comparable store sales in the quarter gained 4.6% and comparable sales for the U.S. home improvement business increased 5%.

Net income in the quarter soared 25.8% to $736 million or 80 cents per diluted share compared to $585 million or 59 cents per share from the same quarter last year.

The home improvement retailer forecasted total sales for the year to increase 4.5% to 5% and comparable sales to jump 4% to 4.5% and diluted earnings per share of about $3.29.

La-Z-Boy Incorporated ((LZB)) edged up 3 cents to $26 after the upholstery furniture maker said sales in the second-quarter ending on October 24 increased 4.7% from a year ago to $382.9 million.

Same-store sales for the La-Z-Boy Furniture Galleries in the quarter jumped 3.6%.

Net income in the quarter advanced 9.4% to $21 million or 41 cents per diluted share compared to $19.2 million or 36 cents per share from the same quarter last year.

Staples, Inc ((SPLS)) dropped 2.9% or 36 cents to $12.09 after the consumer products retailer stated total sales in the third-quarter ending in October declined 6.2% from a year ago to $5.59 billion.

Net income in the quarter plunged 8.8% to $198 million or 31 cents per diluted share compared to $217 million or 34 cents per share from the same quarter last year.

The company expects to generate more than $600 million of free cash flow for the year.

Target Corporation ((TGT)) declined 4.6% or $3.32 to $69.63 after the discount stores operator reported net sales in the third-quarter ending in October increased 2.1% from a year ago to $17.61 billion.

Comparable store sales in the quarter rose 1.9% and comp stores sales in signature categories advanced 2.5%.

Net income in the quarter surged 56% to $549 million or 87 cents per diluted share compared to $352 million or 55 cents per share from the same quarter last year.

For the fourth-quarter the retailer forecasted earnings per share in the range of $1.48 to $1.58.

Target lifted earnings per share forecasted for the year between $4.65 and $4.75 from earlier estimated range f $4.60 to $4.75.