Conagra Brands trimmed its annual profit and operating margin forecasts further, citing supply constraints and foreign exchange rates.
Conagra said it has experienced customer service interruptions on frozen meals containing chicken and frozen vegetables. The company also identified foreign exchange rates as another potential headwind.
Consumers, wary of higher grocery prices, have turned to cheaper private-label brands, hurting sales at packaged food companies including Conagra, Campbell's Co, Kraft Heinz and JM Smucker.
This has led to higher spending on promotions and price cuts on grocery, snacks and frozen-food products, which will weigh on margins.
Conagra has cut its profit expectations twice in less than two months.
Pressure On Margins
Conagra had earlier said that it expected rising cocoa and sugar prices to pressure its margins and said a stronger dollar would hurt international sales in the back half of the year.
The company now expects an annual adjusted profit of $2.35 per share, compared with previous guidance of $2.45 to $2.50.
The company also cut its adjusted operating margin expectation to 14.4% from 14.8%.
Shares of the Slim Jim beef jerky maker lost nearly 4% in 2024, and have already declined nearly 9% in 2025.
Sean Connolly, president and chief executive officer of Conagra Brands, stated, "We are committed to investing behind our brands and innovation, and delivering the high-quality products our customers expect.
"We are pleased with the strong and consistently improving demand we have experienced this year as a result of those investments. While we've faced recent challenges servicing that demand, our investments in infrastructure and strategic partnerships position us for long-term success."
News by Reuters, additional reporting by ESM.
