Conagra beats quarterly sales and profit estimates on higher prices

(Reuters) -Conagra Brands Inc beat first-quarter sales and profit estimates on Thursday, benefiting from price hikes even as consumer demand wanes in the face of rampant inflation.

Packaged food makers have been increasing prices for their products over the past year to shield profit margins from spiraling costs related to freight, labor and ingredients such as wheat, corn and edible oils due to supply chain constraints.

With inflation nearing forty-year highs, volumes at packaged-food companies have also taken a hit, with consumers being more careful with their spending.

Campbell Soup (NYSE:) Co and J.M. Smucker Co have said that budget-conscious consumers are searching for more affordable alternatives.

Conagra’s higher average selling prices boosted organic sales by 14.3%, offseting a 4.6% decline in sales volumes in the first quarter.

On an adjusted basis, the company, known for brands such as Birds Eye and Chef Boyardee, earned 57 cents per share, beating estimates of 52 cents per share, according to IBES data from Refinitiv.

The company’s net sales rose to $2.90 billion from $2.65 billion. Analysts had expected sales of $2.85 billion.

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