Conagra Brands showed higher sales but a 22% drop in profit in the third fiscal quarter, a situation it attributed mostly to inflation.
Net sales for the quarter ending Feb. 27 were $2.91 billion, an increase of 5.1% over the same quarter last year. By volume, sales declined 2.6%, but that was offset by an 8.6% improvement in price/mix, as Conagra raised prices for many of its products.
However, that improvement was offset by increased costs in the ingredients and other materials Conagra had to buy. That led to a 22% drop in profit for the quarter, to $218.4 million. For the full fiscal year, Conagra is dropping its estimate of earnings per share to $2.35 from $2.50.
"We experienced higher-than-expected cost pressures as the third quarter progressed and expect those pressures to continue into the fourth quarter, particularly in certain frozen, refrigerated, and snacks businesses,” CEO Sean Connolly said in a statement. “In response, we have taken steps to implement additional inflation-driven pricing actions.”
