(Reuters) -Slim Jim snack maker Conagra Brands forecast annual profit below expectations on Thursday, anticipating higher costs of ingredients due to U.S. tariffs.
Macroeconomic uncertainties due to U.S. President Donald Trump’s trade tariffs have lowered consumer spending. More people are choosing cheaper private-label brands over Conagra’s products.
The trend could accelerate as Conagra hikes prices to offset the higher cost of ingredients like cocoa, olive oil and palm oil, and packaging material like steel and aluminum, due to the tariffs.
The company expects tariffs to bump up costs by about 3% annually, prior to its efforts to offset the costs through alternate sourcing and targeted pricing actions.
The company said it expects the total cost of goods sold to rise about 7%, taking into account the costs of the mitigation efforts.
The packaged food company expects its adjusted profit per share to be between $1.70 and $1.85 for fiscal year 2026, compared with analysts’ average estimate of $2.19, according to data compiled by LSEG.
Shares of the Hunt’s ketchup maker fell about 3% in premarket trading.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sahal Muhammed)
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