Conagra Brands (NYSE:CAG) announced Monday that Sean Connolly will step down as Chief Executive Officer on June 1, ending an 11-year tenure at the helm of the snack and meal powerhouse.
The company has named John Brase, currently the Chief Operating Officer of The J.M. Smucker (NYSE:SJM), as his successor.
The leadership transition comes at a turbulent time for the maker of Slim Jim and Reddi-wip, as the consumer packaged goods (CPG) sector grapples with a protracted "inflation super cycle."
Despite the announcement of a succession plan, investors reacted with caution, sending Conagra shares down more than 5% in early afternoon trading.
Over the past 12 months, the stock has shed roughly 45% of its value.
Richard Lenny, the independent chair of Conagra’s board, characterized the move as a "thoughtful approach to succession planning" and noted that the board determined now was the optimal time for a transition.
Brase brings deep industry experience to the role, including a 30-year career at Procter & Gamble (NYSE:PG) prior to his stint at J.M. Smucker.
While analysts, including JPMorgan’s Thomas Palmer, noted that Brase is well-regarded by the investment community, they also cautioned that he inherits a company facing steep structural headwinds.
Conagra has recently been forced to balance consumer pushback against higher prices with rising input costs.
While the company recently lowered prices on certain frozen foods to stimulate demand, it simultaneously raised prices on canned goods and cocoa-based products to offset surging raw material expenses.
The company most recently reported earnings per share of $1.70 on April 1, narrowly beating Bloomberg estimates of $1.69.