Adds CEO quotes in paragraphs 5-6, new detail in paragraphs 1 and 7, add graphics, updates shares

By Neil J Kanatt, Sanskriti Shekhar and Alexander Marrow

April 1 (Reuters) - Conagra Brands CAG.N warned on Wednesday steep ingredient costs and tariffs on key materials would hurt its annual profit, signaling that supply chain disruptions from the Iran war were squeezing food companies.

The company now expects annual adjusted profit to be at the low end of its previously forecast range of $1.70 to $1.85 per share. Its shares were down 1.4% in afternoon trading.

Rising costs linked to the Iran war have piled pressure on food companies that were already grappling with higher input expenses and shifting dietary preferences of customers using weight-loss drugs.

Conagra increased prices last year to offset the higher ingredient costs and tariffs on tin-plate steel used in packaging. Its prices rose 1.9% in the third quarter.

"For the last year, you've seen more companies try to hold the line on pricing and just eat some of that inflation because they're trying to be sensitive to consumers who are challenged and looking for good value," CEO Sean Connolly told Reuters.

"It's fairly volatile out there right now. The country is at war," Connolly said, adding that packaging costs have risen due to the oil price swings.

The company continues to expect elevated costs in fiscal 2026, with cost-of-goods inflation of about 7%, including 3% from tariffs on tin-plate steel and 4% from ingredients, particularly animal proteins. Beef is leading a rise in prices of meat including chicken and pork.

Conagra sees annual net sales at the midpoint of its prior forecast of a 1% decline to a 1% rise.

Peer General Mills GIS.N recently reaffirmed its annual targets, while Campbell CPB.O cut its annual forecasts.

Conagra's quarterly revenue declined 1.9% to $2.79 billion, narrowly beating analysts' estimates of $2.76 billion, according to data compiled by LSEG.

Organic sales rose 2.4% after several muted quarters, which analysts attributed to a recovery from last year’s supply-chain disruption and retailer inventory adjustments.

"Given the challenging industry backdrop, the return to organic growth is a notable win," CFRA analyst Arun Sundaram said, adding that sustaining momentum may require reinvestment that could hit margins.