Conagra Brands topped Wall Street estimates for third-quarter revenue, as demand for its pantry staples and frozen food items recovered with more consumers looking to eat at home.
The Slim Jim beef jerky maker has veered towards lowering prices in some categories and increasing promotions to appeal to budget-conscious consumers.
Packaged food companies have been looking to stem the fall in volumes, which have been battered in recent times due to price hikes.
Demand for Conagra's condiments, snacks and kitchen staples has also received a boost from consumers looking to cook more affordable meals at home as they battle sticky inflation.
Third-Quarter Performance
The company's net sales were $3.03 billion for the quarter ended 25 February, compared with analysts' average estimate of $3.01 billion, according to LSEG data.
Reported and organic net sales in the company's grocery and snacks unit increased 3.4% to $1.3 billion in the quarter, driven by a price/mix increase of 4.2%, partially offset by a volume decrease of 0.8%.
Operating profit for the business unit increased 16.7% to $299 million in this period and adjusted operating profit increased 16.5% to $300 million.
Conagra's refrigerated and frozen food segment saw reported and organic net sales decreasing 8.1% to $1.2 billion as price mix decreased 4.8%,
'Steady Progress'
Sean Connolly, president and chief executive officer of Conagra Brands, commented, "Our third quarter results demonstrate steady progress stemming from strong execution. Volume trends in our domestic retail business continued to improve as targeted investments, particularly in frozen, generated strong lifts and unit share gains.
"Outstanding progress on our cost savings initiatives allowed us to support strategic investments in our brands while sustaining margin recovery. We also continued to deliver substantial improvements in free cash flow enabling us to meaningfully reduce our net leverage ratio over the first three quarters of 2024."
News by Reuters, additional reporting by ESM.
