Conagra Brands beats quarterly estimates on strong pantry staples demand

Oct 1 (Reuters) - Conagra Brands (CAG) beat Wall Street estimates for first-quarter sales and profit on Wednesday, helped by resilient demand for its pantry staples such as Slim Jim meat snacks and Act II popcorn.

Consumers opting to cook at home due to rising living costs have helped boost sales for packaged foods companies such as Conagra.

However, tariff-led inflation and macroeconomic uncertainty have been posing a threat to the company's sales, along with competition from cheaper private-label brands.

"We continue to navigate a challenging environment as we're still dealing with persistent inflation and tariffs, both of which have drifted higher than our original expectations," CEO Sean Connolly said in a statement.

"Against that backdrop, consumer sentiment remains weak and we still see value-seeking behavior."

Reiterating its annual forecasts, Conagra said it expects an overall rise of about 7% in the cost of goods sold, including a 3% hit from tariffs.

The company said the forecast includes a 50% tariff rate on imported tin plate steel and aluminum, along with a 30% rate on limited imports from China.

Shares of the company rose about 2% in premarket trading, paring earlier gains, after the company said tariff-driven pricier inventory would weigh on the current quarter's operating margins.

Conagra posted revenue of $2.63 billion for the quarter ended August 24, beating analysts' average estimate of $2.62 billion, according to data compiled by LSEG.

Its quarterly adjusted earnings of 39 cents per share also exceeded expectations of 33 cents. (Reporting by Anshi Sancheti and Neil J Kanatt in Bengaluru; Editing by Shreya Biswas)