ConAgra Foods, Inc. (NYSE: CAG) is one of North America's largest packaged food companies, serving consumer grocery as well as restaurant and foodservice establishments. Popular ConAgra Foods consumer brands include: Hunt's, Healthy Choice, Banquet, Armour, Louis Kemp, La Choy, Lunch Makers, Knott's Berry Farm, Wesson, Blue Bonnet, Kid Cuisine, Parkay, Reddi-wip, Marie Callender's, Cook's, Butterball, ACT II, Slim Jim, Eckrich, Chef Boyardee, Orville Redenbacher's, PAM, Snack Pack, Van Camp's, Peter Pan, Hebrew National, Gulden's, Pemmican, Swiss Miss, and many others.
http://www.conagrafoods.com

Gary Rodkin, ConAgra Foods' chief executive officer, commented, "We are pleased with the overall sales results in the Consumer Foods segment, the continued profit growth in Commercial Foods, and progress with overall supply chain and SG&A costs. We are disappointed that Consumer Foods posted a decline in comparable operating profit; however, we have already implemented actions that should generate stronger profits for the Consumer Foods business, particularly in the second half of the fiscal year."

Segment Changes: In the first quarter of fiscal 2009, the International Foods segment was merged into the Consumer Foods segment. The company has also changed the name of its Food & Ingredients segment to Commercial Foods. A presentation of quarterly segment sales and operating profits for fiscal year 2008 can be found in the Q&A document accompanying this release.

          Consumer Foods Segment (61% of first-quarter sales)
  Branded consumer products sold in retail and foodservice channels.

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        Volume & Sales Data               Year-over-year % Change
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                                        As Reported     Comparable(a)
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Unit Volumes                                Flat             Flat
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Overall Sales                                 9%              9%
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Sales for Priority Investment Brands          9%              9%
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Sales for Enabler Brands                     10%              9%
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(a)Comparable sales calculations exclude the impact of 1) sales
 contributed by the Banquet and private label pot pie business in the
 current and prior years given the recall in the second quarter of
 fiscal 2008, and 2) sales for Lincoln Snacks, which was acquired
 during the second quarter of fiscal 2008. See page 10 for Regulation
 G reconciliations.

The Consumer Foods segment posted sales of $1.9 billion and operating profit of $187 million for the quarter. The following segment commentary relates to comparable performance unless otherwise indicated:

Consumer Foods' comparable sales growth was 9%, most of which was due to net price increases. Approximately one point of the sales growth reflects having sales of Peter Pan peanut butter and Alexia Foods for the entire first quarter this fiscal year and only part of the first quarter last fiscal year. The company implemented a 7% weighted average price increase for this segment on March 24, 2008, and implemented an additional 3% weighted average price increase at the end of the first quarter of fiscal 2009. Volumes were essentially flat.

    --  Comparable sales for priority investment brands, which
        represent almost 70% of segment sales, increased 9%; this
        primarily reflects net price increases. Examples of major
        brands posting strong sales growth include Chef Boyardee,
        DAVID, Egg Beaters, Hebrew National, Hunt's, and Orville
        Redenbacher's.

    --  Comparable sales for enabler brands increased 9%, primarily
        reflecting net price increases. Examples of brands posting
        strong sales growth include Blue Bonnet, La Choy, Libby's, and
        Van Camp's.

    --  More brand details can be found in the Q&A document
        accompanying this release.

Operating profit of $187 million was essentially equal to year-ago amounts as reported, and declined 6% on a comparable basis as detailed on page 10. Advertising and promotion expense increased at a mid single-digit rate. Although the company continued to successfully implement pricing actions and cost-saving initiatives, these were more than offset by significant input cost inflation, particularly in cooking oils, tablespreads, and Banquet frozen foods. Overall inflation was greater than $190 million. Due to a combination of recent price increases, innovation, an expected moderation of input cost increases, as well as the achievement of supply chain and SG&A cost savings, the company expects the segment to post strong operating profit growth for the full fiscal year despite potential negative volume impact from price increases. The company expects the improvement to be concentrated in the second half of the fiscal year.

Commercial Foods Segment (39% of first-quarter sales)

Specialty potato, dehydrated vegetable, seasonings, blends, flavors, and milled grain products sold to foodservice and commercial channels worldwide.

During the quarter, sales for the Commercial Foods segment were $1.2 billion, 32% ahead of last year, as all major operations posted sales growth. Sales for the milling operations increased due to the pass-through of higher wheat costs as well as improved product mix. Sales for Lamb Weston specialty potato and appetizer operations grew primarily due to increased prices and the acquisition of Watts Brothers Farms; this recent acquisition contributed approximately 2 points of sales growth to the overall segment this quarter. Sales for Gilroy Foods & Flavors showed solid sales growth, driven by volume growth across major product lines and new customer business with foodservice and industrial accounts. Segment operating profit was $133 million for the quarter, 10% ahead of the year-ago amount, with all major operations posting growth due to strong sales results and a focus on efficiencies. Segment operating profit includes an approximate $5 million gain from an asset sale within Gilroy Foods & Flavors. Excluding this gain, segment operating profit was approximately $127 million (rounded) for the quarter, above year-ago amounts.

Hedging Activities - This language primarily relates to operations other than the company's milling operations.