Conagra Brands CEO says inflation won’t go away even after Covid omicron wave passes

Conagra Brands CEO Sean Connolly told CNBC’s Jim Cramer on Thursday that the company is prepared for inflationary pressures to stick around well after the Covid omicron wave subsides.

“It’s not quite that simple. I don’t think if omicron goes away it immediately solves inflation,” Connolly said in an interview on “Mad Money.” “I think you’ve got to have a battleplan for both.”

The highly transmissible omicron variant is impacting workforces across the economy from teachers to hospital employees to manufacturing plants. It’s the latest reminder of the Covid pandemic’s wide-ranging economic effects, including the supply-chain bottlenecks that have contributed to upward pressure on prices.

Connolly said Conagra — which makes Slim Jim, plant-based protein brand Gardein and Orville Redenbacher’s popcorn — has strict masking policies and strongly encourages vaccination as ways to protect workers from Covid.

At the same time, Connolly said the company is leaning on the strength of its brands to pass along rising costs to consumers without denting sales volumes. He said that should pay off for Conagra down the road.

“If you’ve got your pricing in place, demand remains strong, when the inflation subsidies you can see rapid margin recovery in a meaningful way,” he said.

Connolly’s appearance on “Mad Money” comes after the company reported second-quarter results earlier Thursday. Its per-share earnings of 64 cents missed Wall Street’s forecasts by 4 cents, according to Refinitiv. However, quarterly revenues of $3.06 billion topped expectations of $3.02 billion.

Conagra shares finished Thursday’s session down 1.8%.

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