Losses from the rising cost of commodities and a weak reaction to promotional campaigns has led ConAgra to announce it will raise prices.
The strategy is designed to enhance financial results during the next several months as the company's second quarter profits were more tepid than anticipated, as predicted earlier this month. That led ConAgra to slash 2011 forecasts for a second time. Some price increases will soon follow the ones that already have been implemented.
"We are confident that the net effect of these pricing increases will be positive, despite some potential modest volume decline," chief executive officer Gary Rodkin said in a news release.
This year's fiscal second quarter saw net income decrease to $200.9 million while last year's results from the same quarter were $239.7 million.
ConAgra's commercial foods division, of which French fries are a primary staple, also fell short of expectations. The chief executive officer attributed that to potatoes' high costs and low quality. But he did underscore his belief that brighter days await the company.
"Our products will continue to deliver outstanding value to consumers even after these pricing actions," he said.
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