(Reuters) – Conagra Brands Inc missed market estimates for quarterly profit on Thursday, as the Slim Jim jerky maker took a hit from surging prices of raw materials and higher shipping costs.
Margins of packaged food companies have come under pressure in recent months from a spike in prices of commodities such as wheat, sugar and edible oils, while an overburdened supply chain has driven up freight costs.
That has prompted the likes of Conagra to hike prices, which along with sustained at-home cooking trends, helped the company’s net sales rise 2.1% in the second quarter.
It also raised its annual core sales forecast to a rise of about 3% from its prior estimate of a 1% growth.
Net income attributable to Conagra declined to $275.5 million, or 57 cents per share, in the quarter ended Nov. 28, from $378.9 million, or 77 cents per share, a year earlier.
Excluding one-time items, Conagra earned 64 cents per share, below estimates of 68 cents per share.
Reporting by Deborah Sophia in Bengaluru; Editing by Aditya Soni
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