Reporting a hefty decline in net sales in its third fiscal quarter of 2025, Conagra executives said they are concerned about the impacts of inflation and the potential impacts of new tariffs.
The Chicago, Illinois, U.S.A.-based manufacturer of frozen seafood brands Mrs. Paul’s and Van de Kamp’s, along with numerous other food products, reported its net sales decreased 6.3 percent, while organic net sales declined 5.2 percent in the quarter. Diluted earnings per share (EPS) also plunged 53 percent to USD 0.30 (EUR 27.21).
While the biggest sales loss of 17.6 percent was in its International segment, net sales for its Refrigerated & Frozen segment dropped 7.2 percent to USD 1.1 billion (EUR 997.7 million) as price/mix decreased 4.2 percent.
Volume in the quarter was negatively impacted by supply constraints impacting the company's frozen meals containing chicken and frozen vegetable products.
“Inventories are being rebuilt, but some of the higher costs associated with recent supply chain constraints will linger into Q1,” CEO Sean Connolly said during a 3 April investor earnings call.
Produce, steel, and potentially other items such as palm oil could be impacted by tariffs, but that list is fluctuating, Connolly said.
“Given the macroenvironment … this year is extraordinarily dynamic. So we will definitely take advantage of the time between now and [July] to see where the dust settles on a number of these external things we are monitoring,” Connolly said. “We are still monitoring inflation, tariffs, consumer sentiment and the need for pricing. So overall, [it is] too early to give you an outlook at this juncture.”
In February, Conagra said it was lowering its fiscal 2025 organic net sales forecast by 2 percent, after first revising it downward in December 2024.
In addition to supply chain constraints, foreign exchange rates “are now expected to provide a further headwind to adjusted earnings per share,” the company said in February.
