Conagra Brands battles inflation with increased prices and continued innovation

Speaking on the company’s Q4 2021 earnings call, president and CEO Sean Connolly answered the question weighing on the minds of many, “Will Conagra take list pricing increases? The short answer is, yes. In fact, we began implementing pricing actions on some of our products in the fourth quarter related to the initial inflation we experienced.”

As a result, Conagra updated its full-year outlook for FY22, expecting sales to be flat compared to FY21.

“Although the substantial increase in inflation over the last few months has negatively impacted our profit guidance for the year, we remain confident in the underlying strength of the business,” ​said Connolly.

Sales decline but remain elevated on a 2-year basis

Lapping the prior year’s surge in at-home food consumption, Conagra reported a net sales decrease of -16.7% across its three main retail segments in its fourth quarter ending May 31, 2021, compared to Q4 2020.

In its grocery & snacks segment, net sales decreased -26.4% to $1.1bn for Q4 2021 compared to the same period last year. On a 2-year basis, however, Conagra grew its retail snacks business by 21% in FY21 led by increases of more than 25% across hot cocoa, microwave popcorn, ready-to-eat pudding and meat snacks.

Similarly, the company’s staples retail sales increased 5.2% over the past two years spurred by consumers who have “increasingly rediscovered the joys of cooking last year, consumers reengaged with our staples products in a meaningful way. Shoppers are engaging or reengaging with our products now more than ever, creating a larger, high-quality consumer base,”​ said Connolly.

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