CHICAGO — Conagra Brands, Inc. is feeling the burn in the freezer aisle, where some shoppers opted out in favor of cheaper groceries in the recent quarter, said Sean M. Connolly, president and chief executive officer. He described a “short-term dynamic” in which “shoppers have turned to more hands-on food preparation to get additional bang for their buck,” rather than splurging on single-serve prepared meals.

“Frozen meals has been one of the fastest-growing categories in consumption over the past 40 years,” Mr. Connolly said during an Oct. 5 earnings call. “This expansion has been fueled by the long-term sustained consumer demand for convenience as well as the addition of innovation and quality ingredients. This 40-year trend demonstrates the critical role that frozen plays in providing convenient, high-quality foods for every occasion, which consumers have come to increasingly rely on. This is central to why we believe the current softness is temporary.”

Net income attributable to Conagra Brands, Inc. for the first quarter ended Aug. 27 was $319.7 million, equal to 67¢ per share on the common stock, which compared with a loss of $77.5 million in the year-ago period. Adjusted net income increased 15% to $316 million, driven by an increase in gross profit and a decrease in selling, general and administrative expenses.

Net sales were down slightly from the prior year at $2.9 billion.

Organic net sales decreased 0.3%, driven by a 6.6% decline in volume primarily due to industrywide slowdown in consumption and shifts in consumer behavior, partially offset by a 6.3% gain in price/mix.

Operating profit for the Grocery & Snacks segment increased 3.3% to $259 million on sales of $1.2 billion, up 1.2% from the previous year. Adjusted operating profit increased 3.8% to $264 million, reflecting higher organic net sales and productivity that more than offset cost of goods sold inflation and higher advertising and general expenses. Segment performance benefited from a price/mix increase of 5.6%, partially offset by a volume decrease of 4.4%. Conagra Brands said it gained dollar share in snacking categories including seeds, microwave popcorn and ready-to-eat pudding and gels, as well as staples categories including chili and canned meat.

Refrigerated & Frozen segment operating profit was $199 million, which compared with an operating loss of $216 million the year before. Adjusted operating profit increased 15% to $201 million, driven by productivity and lower advertising and promotional spend that more than offset lower organic net sales, unfavorable operating leverage, increased input costs and general expenses. Segment sales declined 4.6% to $1.2 billion due to a volume decrease of 10.5%, partially offset by a price/mix increase of 5.9%. Conagra Brands gained dollar share in frozen sides and frozen breakfast sausage during the quarter.

International segment operating profit fell 12% to $24 million due to certain non-cash restructuring charges. Adjusted operating profit increased 58% to $42 million, benefiting from higher organic net sales and productivity that more than offset the negative impact of costs of goods sold inflation, unfavorable operating leverage and increased general expenses. International segment sales increased 11% to $260 million, reflecting a 3.2% increase from the favorable impact of foreign exchange and an 8.2% increase in organic net sales.

Foodservice segment operating profit was $44 million, which compared to $1 million in the comparable quarter. Adjusted operating profit soared 88% to $41 million, driven by higher organic net sales and productivity that more than offset the impacts of input cost inflation and unfavorable operating leverage. Segment sales increased 5.2% to $289 million, as price/mix increased 10% while volume decreased 5.1%.

For the fiscal year, management is expecting organic net sales growth of approximately 1% over the year before. Adjusted earnings per share are expected to be between $2.70 and $2.75, an improvement over fiscal 2023 earnings per share of $1.43.

Executives expect “an improving consumer environment” and a return to year-over-year volume growth as the year progresses. Additionally, the company is planning “more aggressive but smart and selective merchandising” and “a really good innovation slate,” as well as increased advertising and promotional spend on some of Conagra Brands’ biggest businesses, Mr. Connolly said.

“We've seen shifts like this before and expect these near-term changes in behavior to also be temporary,” he said. “In fact, recent trends suggest this is already underway.”