Packaged foods giant ConAgra Foods (NYSE:CAG) reported fiscal 2015 first-quarter earnings this morning. There is a lot at stake for ConAgra as fiscal 2014 was a poor year for the company. Its sales were weighed down by under-performance in its key consumer foods segment as management noted a shifting consumer landscape, one in which tastes were moving away from shelf-stable and frozen products, toward fresher ingredients.

In this quarterly report, the company showed that progress was made, but there's still a ways to go. Here is some of what ConAgra had to say in its first earnings results of the new fiscal year.

The numbers
ConAgra reported $3.7 billion in companywide sales, down 1% from the same period last year. Two of the company's three operating segments posted sales declines: consumer foods (down 1%) and private brands (down 1.7%). Only commercial foods increased sales, by 1.8%. The consumer segment is critically important for ConAgra, because it represents approximately 44% of the company's total sales. In this regard, the results were mixed.

ConAgra management noted sales increases across several brands, including Banquet, Bertolli, Hunt's, PAM, Slim Jim, and Reddi-Whip. Unfortunately, this was not enough to offset continued challenges in the three largest brands: Healthy Choice, Orville Redenbacher's, and Chef Boyardee.

Diluted earnings per share from continuing operations clocked in at $0.25 per share, down 16% from $0.30 per share year over year. Adjusted EPS, which strips out certain one-time items not expected to impact future profitability, actually increased 5%, from $0.37 per share in the first quarter last year to $0.39 per share in the first quarter of fiscal 2015.

ConAgra beat analyst estimates on adjusted earnings per share by $0.04, which is a solid beat, but revenue fell short of expectations which called for $3.73 billion.

In the second quarter, management forecasts adjusted earnings per share to be flat year over year. For the full year, management expects operating cash flow of $1.6 billion-$1.7 billion, which would be 6%-13% growth, and mid-single-digit earnings growth on a percentage basis versus the prior year.

Progress made, but still a ways to go
It's notable that ConAgra slowed its sales decline. Consumer foods was a significant laggard throughout last year, but managed to post flat volumes in the quarter reported today. ConAgra has quite a few brands that are doing well, but its three major brands that are still struggling are a cause for concern.The company said today that "Chef Boyardee and Healthy Choice are already responding favorably to merchandising, packaging, and product changes" and "merchandising, product assortment, and packaging changes for Orville Redenbacher's are being implemented and expected to benefit results as the year progresses."

In the company's private-label brands segment, progress is lacking. Sales in the private brands category fell 1.7% in the first quarter, and operating profit fell 36%.

ConAgra purchased Ralcorp Holdings last year for nearly $5 billion in an attempt to boost its private-label presence. This seemed like a wise decision at the time, given the problems the company was having in its consumer foods business. However, the acquisition has gone horribly. Elevated costs and a very difficult integration have fractured relationships with customers. ConAgra had to make significant pricing concessions, which is weighing on sales, and has absorbed much higher supply chain costs. Importantly, though, management expects these challenges to ease over the course of the fiscal year.

Another sign of progress is that the company is aggressively paying down debt to improve its financial position. ConAgra reduced debt by about $500 million in the first quarter. Management states that ConAgra is on track to reduce debt by approximately $1 billion in fiscal 2015. This is the right thing to do, since ConAgra's balance sheet was bloated after the acquisition of Ralcorp Holdings. The company still carries $7.7 billion in senior long-term debt, compared to just $5.7 billion in shareholder's equity. This results in a long-term debt to equity ratio well over 100%, a notable concern that the company needs to improve on.

The Foolish takeaway
ConAgra's first-quarter results were a mixed bag. It slowed the decline in companywide sales and volumes, which may indicate a bottom. And, the company is actively paying down debt to improve its balance sheet. Management expects adjusted earnings growth this year, which is a lofty goal, but one that will be very impressive if the company can make good.

On the other hand, ConAgra still needs to stabilize its key brands and its private label business. Earnings growth this year won't be accomplished unless this happens. As a result, the main takeaway is that ConAgra is making progress, but there is still a lot of work to be done.

Bob Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.