(Reuters) – Conagra Brands Inc (NYSE:) Inc warned Thursday of a larger hit to its full-year margins due to surging raw materials costs and increased shipping expenses despite price hikes at the Chef Boyardee pasta manufacturer.

Company’s annual adjusted operating margin forecast was lowered to 15.5%, from 16%. It also failed market expectations for quarterly profits. This caused its stock price to drop 4%.

In recent months, packaged food businesses have been hit hard by rising commodity prices like resin and wheat. Additionally, their freight costs have risen due to an overburdened supply network.

Sean Connolly, Chief Executive Officer of the company stated in a statement that “we expect to continue experiencing costs pressures higher than original expectations in fiscal 2022”.

Duncan Hines, a cake mix maker, expects that gross inflation will be 14% in the next year. This is higher than its prior estimate of 11%.

The company stated that it had brought in another round price hikes during December. This benefit is expected to continue into the second half.

John Boylan, Edward Jones Analyst said “We won’t probably see the results of those efforts until inflation subsides… eventually we should see better profit growth. But that is not certain when it might happen.”

Conagra’s sales growth and sustained home cooking boom enabled it to exceed its second-quarter sales projections, and increase its core sales outlook for the year.

The company expects to see an increase in organic net sales of around 3% annually, as opposed to the 1% previously estimated.

The company earned 64 cents per diluted share for the three-months to Nov. 28, a loss of estimates of 68 cents, according to data from Refinitiv.