ConAgra Says Higher Commodity Costs Still A Factor In FY09
17 Février 2009 - 6:27PM
Dow Jones News
While some commodity costs have abated from recent highs,
ConAgra Food Inc.'s (CAG) Chief Financial Officer John Gehring said
price inflation will continue to factor into the company's strategy
this year.
Certain commodity costs have fallen - including edible oils,
energy and grains - but aggregate input costs are still higher than
last year, Gehring said Tuesday at the Consumer Analyst Group of
New York Conference being held in Boca Raton, Fla.
Proteins, vegetables and steel are still feeling continued cost
pressures, he said.
ConAgra expects raw materials costs to be around $500 million
for its consumer foods division in fiscal 2009, up from $480
million in fiscal 2008, and $160 million in fiscal 2007.
"To be clear, we are not planning for net deflation but lower
rates of inflation," Gehring said.
To counter rising raw material costs, food companies have had to
raise prices in recent months. Gehring said he expects net fiscal
2009 price increases to be still significant, even after
merchandising and promotion adjustments. However, all commercial
foods businesses prices should recover the cost of inflation, which
it has also been able to do in the past, he said.
ConAgra, whose brands include Hunt's ketchup and Healthy Choice
frozen meals, reiterated its earnings per share guidance of
slightly above $1.50 from continuing operations for fiscal 2009. In
December, the food-maker reported a decline in fiscal
second-quarter net income due, in part, to hedging markdowns.
Shares of ConAgra recently changed hands at $16.14, down 8
cents, or 0.6%.
-By Kelly Nolan; Dow Jones Newswires; kelly.nolan@dowjones.com;
201-938-4049