Rising input costs have weighed on third-quarter earnings at ConAgra Foods, despite higher sales, the Chef Boyardee maker said today (24 March).
Net income dropped 6% to US$214.8m in the three month to the end of February, down from $229.6m booked during the comparable period of last year.
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The fall came in spite of a 4% increase in revenues, which rose to $3.15bn. Consumer foods sales edged up to $2.08bn, up from $2.03bn last year, while the group’s commercial foods unit saw revenues rise from $996.1m to $1.07bn.
The company said that it expects margins to improve as productivity initiatives and price rises boost profitability in the remainder of the year. ConAgra added that higher selling prices for its best-performing brands, including Healthy Choice, Slim Jim and Banquet, would have more of an impact on dollar-sales in the final quarter of the year.
“While inflationary pressures continue to build and difficult conditions persist, we expect our performance to continue to benefit from pricing actions under way, strong supply chain cost savings and other profit-enhancing initiatives,” CEO Gary Rodkin said.
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Looking to the full year, ConAgra reiterated its previous guidance of a low single-digit increase in earnings.
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