(Reuters) -Conagra Brands on Thursday swung to a profit in the first quarter and maintained its annual targets as multiple rounds of price hikes and easing cost pressures helped offset a slowing demand for the packaged food maker’s products.
Conagra, which grappled for months with higher costs tied to labor and raw materials, raised its product prices multiple times over the last several quarters, and is now seeing some of the expenses ease from their peaks.
While price hikes helped gross margins climb 354 basis points to 28.3% in the first quarter, they impacted the company’s volumes as customers turn more cautious with their spending on expensive branded food items.
The Slim Jim beef jerky maker reported a net income of about $320 million, or 67 cents per share, versus a loss of $77.5 million, or 16 cents per share, a year earlier.
The company reported net sales of $2.90 billion in the first quarter, while analysts on average expected $2.95 billion, according to LSEG data.
Shares of the Chicago-based company fell marginally to $26.38 before the bell. As of last close, stock dropped 31% so far this year.
Conagra expects its annual organic net sales growth to be 1% and adjusted EPS to come in between $2.70 and $2.75.
(Reporting by Granth Vanaik in Bengaluru; Editing by Sherry Jacob-Phillips)
