REUTERS — Conagra Brands expects annual revenue and profit to be below estimates after missing quarterly revenue as high living costs prompt cash-strapped shoppers to turn to cheaper alternatives for their at-home meals.
The packaged food industry has been struggling with lacklustre volume recovery as higher living costs squeeze budgets, forcing cost-conscious consumers to look for even cheaper alternatives despite preferring to eat at home over dining out.
Despite reducing product prices to attract more cautious spenders, the food manufacturer still experienced sluggish demand in its frozen food and snacking businesses.
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Conagra’s total volumes decreased 1.8 per cent in the fourth quarter after falling 7.7 per cent last year.
“Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024 as consumers adapt and establish new reference prices,” chief executive officer Sean Connolly said.
The company expects fiscal-year 2025 organic sales to decrease between 1.5% and flat, compared with analysts’ estimates of a 1.54 per cent increase.
The company beat quarterly estimates for profit but forecasts fiscal 2025 profit below estimates.
It expects annual profit per share to be in the range of $2.60 to $2.65 compared to analysts’ estimates of $2.69 per share.
Conagra reported net sales of $2.91 billion for the quarter ending May 26, below analysts’ average estimates of $2.93 billion.
