Conagra Brands forecasts annual revenue below estimates on tepid demand

(Reuters) -Conagra Brands forecast annual revenue and profit below estimates after missing quarterly revenue expectations on Thursday, as high living costs prompted cash-strapped shoppers to turn to cheaper alternatives for their at-home meals.

Shares of the company, which also missed quarterly revenue estimates, were down about 4% in premarket trading.

The packaged food industry has been struggling with lackluster volume recovery as higher living costs have squeezed budgets, forcing cost-conscious consumers to look for even cheaper alternatives despite preferring to eat at home over dining out.

Despite reducing product prices to attract more cautious spenders, the maker of Slim Jim beef jerky still experienced sluggish demand in its frozen food and snacking businesses.

Conagra’s total volumes decreased 1.8% in the fourth quarter after falling 7.7% last year.

“Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024, as consumers adapt and establish new reference prices,” CEO Sean Connolly said.

The company expects fiscal-year 2025 organic sales to decrease between 1.5% to flat, compared with analysts’ estimates of 1.54% rise, as per LSEG data.

The company beat quarterly estimates for profit but forecasts fiscal 2025 profit below estimates.

The Healthy Choice cereal maker expects annual profit per share to be in the range of $2.60 to $2.65 compared to analysts’ estimates of $2.69 per share.

Conagra Brands (NYSE:) reported net sales of $2.91 billion for the quarter ending May 26, below analysts’ average estimates of $2.93 billion, according to LSEG data.