Corporate America still using "inflation" and market control to grab more profit

Before panic about an overly-good jobs report and Middle Eastern tension tanked the stock market today, there was other Wall Street news going on. And in particular this report about Conagra Foods’ strong profit report grabbed my attention.

Conagra Brands topped Wall Street estimates for third-quarter revenue and profit on Thursday, as demand for its pantry staples and frozen food items recovered with more consumers looking to cook meals at home in the face of sticky inflation.

Shares of the Slim Jim beef jerky maker rose about 5% after the company also raised its annual adjusted operating margin forecast and said its cost-saving attempts were paying off….

Easing supply chain concerns have also helped counter the impact from waning price hike benefits. Conagra raised its annual operating margin forecast to 15.8% from 15.6%.

"The efficiency of our operations in Q3 resulted in cost savings that enabled us to fund investment while maintaining gross margin," CFO Dave Marberger said in a statement.

Let me translate that into reality – “we raised our profits in prior years by raising prices of products, and now that costs are being leveled off and cut, we can keep the prices at that same, higher level, and cash in the difference!”

And that goes along with the general trend that we've seen in the country, as we found out last week that corporate profits rose as 2023 drew to a close.

In addition to the higher overall numbers, profit margins per unit also grew in Q4, to their highest marks on record.

That’s an indication of “market power”, aka “a lack of competition allowing a few big corporations to grab more profits”. And it's something the Biden Administration and DC Dems need to be all over this year, in case these corporations try to use that “market power” to jack up prices to anger consumers, and increase their chances of keeping the Trump tax cuts in place that has given added benefits to this profit-hoarding behavior since 2017.