Conagra Brands plans more price increases despite losing volume for four straight quarters

Management at Conagra Brands said that in the next two quarters, it has more price increases planned even though price increases are beginning to impact volume materially. In Q4 of 2022, the maker of Slim Jims and Birds Eye frozen foods saw sales decline by 6.4%. That marks four consecutive quarters of volume loss.

However, the volume was more than offset by a 13.2% price/mix improvement. The company reported a net sales increase of about 3% for the fiscal year, while operating margin compressed down 400 basis points to 11.7%.

There was a bit of awkwardness in the call. The management team, led by CEO Sean Connolly, focused the discussion on supply chain constraints. “While we are making progress in supply chain, the constraints are still with us.” Connolly told analysts in this weeks’ investor call, “And they were still a factor in Q4 and we did see retailers burn through inventory faster than we could replenish it.”

Analysts are skeptical of Conagra Brand's rationale for the decline in volume

However, not all analysts were sold on the framing.