Conagra Brands today (4 January) cut its forecasts for key sales and profit metrics, with the US group citing weak consumer demand.

The Slim Jim meat jerky maker expects its annual net sales to fall 1-2% on an organic basis, compared to its previous forecast of 1% growth.

Conagra, meanwhile, is forecasting its adjusted operating margin to be around 15.6%, versus its October estimate of 16-16.5%.

The company also lowered its forecast for its annual adjusted earnings per share from a range of $2.70 to $2.75 to $2.60 to $2.65.

Conagra said it now expected its volumes to recover more slowly, while it has earmarked plans to spend more on investing behind its brands.

The new forecasts came alongside the publication of Conagra’s fiscal second-quarter financial results. In the three months to 26 November, the Hunt’s ketchup owner generated net sales of $3.21bn, down 3.2% on a year earlier. On an organic basis, net sales were down 3.4%. Volumes fell 2.9%.

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Gross profit was down 8.2%, reaching $847m, while adjusted gross profit decreased 7.6%, sitting at $862m. Conagra said the profit decline was linked to high productivity being “more than offset by the negative impacts of cost of goods sold inflation, lower organic net sales and unfavourable operating leverage”.

Net income dropped 25.1% to $286m, propelled by lower gross profit and increased SG&A costs.

In a statement, Conagra president and CEO Sean Connolly said: “Despite an ongoing challenging macro environment, we saw several positive signs in Q2. In particular, volume trends in our domestic retail business improved substantially, as inflation-driven volume declines were cut in half compared to Q1.

“Most importantly, our targeted investments in our frozen business generated strong lifts and market share gains. These developments reinforced our confidence in investing to build momentum in the second half and set up a strong FY25.”

When presenting Conagra’s fiscal results for 2023, Connolly said pressures on consumer spending were bringing about changes in buying trends and having some effect on volumes.