ConAgra Foods is cutting its fiscal 2022 outlook due to rising costs, which the food company will try to offset by boosting prices.
ConAgra, whose brands include Duncan Hines, Slim Jim and Birds Eye, now foresees fiscal 2022 adjusted earnings of about $2.50 per share. It previously predicted earnings of $2.63 to $2.73 per share. Analysts polled by FactSet expect $2.62 per share.
Shares of Chicago-based ConAgra fell nearly 5% in morning trading.
The company said Tuesday that it expects consumer demand for its retail products will remain high compared with historical levels during fiscal 2022, as consumers have developed new habits during the COVID-19 pandemic.
But President and CEO Sean Connolly said in a statement that fiscal 2022 costs are now seen as being materially higher than originally anticipated. While ConAgra is raising prices to help combat this, Connolly said that there will be a lag between the time the company is hit with the higher costs and when it realizes the benefits of its actions.
For its fiscal fourth quarter, ConAgra Brands Inc. earned $309.5 million, or 64 cents per share. That compares with $201.4 million, or 41 cents per share a year earlier.
The current quarter’s results were helped by tax benefits related to the restructuring of the Ardent Mills joint venture.
Excluding certain items, earnings were 54 cents per share.
Wall Street was looking for 52 cents per share.
Sales fell to $2.74 billion from $3.29 billion, but still beat the $2.71 billion FactSet forecast.
Organic net sales were hurt by a 12.8% volume decline, which was mostly due to the year-ago period benefiting from a surge in people eating food at home at the beginning of the pandemic. The prior-year period also included an extra week.
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