Conagra Brands expects inflation to increase in the next two quarters, as high gas prices are driving up transportation costs.

Transportation inflation has roughly doubled compared with what the food manufacturer planned for the year, Chief Financial Officer David Marberger said during a call with analysts Wednesday. Conagra is now expecting total inflation will be on the high end of its previously expected range of 5% to 6%.

"Our transportation costs were really driven by the driver shortage and oil prices," Marberger said.

Conagra, which makes Orville Redenbacher's popcorn and Slim Jim meat sticks, anticipates inflation during the next two quarters will be higher than it was in its recently-completed first quarter.

The company reaffirmed its outlook for the year, calling for organic net sales to fall between 3% and 1%. Adjusted earnings are projected to come in between $1.40 and $1.50 a share, compared with analysts' estimate of $1.44 a share.

"We have a lot of areas where we're still seeing high inflation, which we will have all during fiscal 2027," Marberger said.

Shares declined 3% to $13.68 on Wednesday. The stock is down about 21% this year.

Net sales in the first quarter slipped 1.4% to $2.6 billion, roughly in line with Wall Street estimates. On an organic basis, sales were down 1.1%.

Sales across Conagra's grocery and snacks segment decreased 2.6%, as lower sales volumes more than offset higher prices. Sales across the company's refrigerated and frozen unit were down 2.1%, hurt by lower volumes and prices.

Consumer spending also continues to be muted for the company, which sells many of its snacks at gas stations and convenience stores. "I would describe the macro environment as dynamic," Marberger said. "That's probably an understatement."

There is still a big gap between spending among high- versus low-income shoppers, he said. Convenience stores have experienced more pressure, as high gas prices are discouraging discretionary spending.

Profit was $174.3 million, or 36 cents a share, compared with $164.5 million, or 34 cents a share, a year earlier.

Stripping out certain one-time items, earnings came in at 41 cents a share. Analysts polled by FactSet expected adjusted earnings of 28 cents a share.