Conagra Brands (CAG) 13 Jul 232023 Q4 Earnings call transcript

Good morning and welcome to the Conagra Brands Fourth Quarter Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded today. I would now like to turn the conference over to Melissa Napier, Head of Investor Relations. Please go ahead.

Good morning. for call. Brands us fiscal quarter joining earnings XXXX for our fourth Conagra and Thanks here Sean business am CFO, I with who Marberger, and will our Dave discuss our performance. Connolly, our CEO;

when We will prepared conclude. our take remarks questions your

we our some in the today’s while with statements. achieve. results filed in faith, we we On have the not of statements And we these will forward-looking do be risk making any SEC. we included will good call, documents factors making are are guarantee the Descriptions about

non-GAAP press can We be the the and release found that reconciliations in impact earnings Investor referenced. also items measures discussing call. on slides will the period measures. some be the believes section These and adjusted that release for non-GAAP website. additional in will non-GAAP of the of found management to earnings be we the reviewing in see Relations financial Both comparability information today’s for numbers be The on items. can refer and Please which comparability GAAP exclude our our

call will to I the started. over turn now us Sean to And get

Thanks, I update fourth how start earnings morning, ‘XX quarter the joining call. thinking about and are Melissa. we for and our fiscal everyone beyond. and thank business fiscal quarter on Good share the with year will you then and XXXX

the margin partners, our away the despite to logistics X and impacted today’s both call. from from our Slide growth QX, costs you sales In delivered what take we’d during which profit outlines we solid one quarter. Americold, like and frozen disruption of

strong our our environment team well years. positioned I to am year, operating of brands volatility strategic the results. our the our navigated deliver and have fiscal priorities continued ‘XX These of dynamic a against the implementation efforts playbook full way following the few execute to past the fiscal of For proud

a continued outlook normalized our financial long-term environment commitment year as algorithm. see, XXXX more to a for operating a as transition will toward well our fiscal you As reflects

quarter sales let’s gross quarter full quarter of starting strength prior over into as the basis compared overview, including four fourth net represents X% margin for our the underscore organic the last the across to period adjusted growth adjusted gross year margin compared X. Organic ‘XX results net year. over fourth improvement. XX% as The increase of that results, the EPS XXX well and grew a and the operating metrics, With point dive performance sales of robust fiscal and XX.X% X.X% growth year on all Slide to

going that priorities are into on ‘XX, fiscal to of our at pleased back say each we Looking them. we delivered

our to We drive ongoing in fiscal execution a ‘XX. top of coming helped the which continued inflation, priority face into recovery margin disciplined pricing

was that reduced X.Xx by to many built years end turn brand in we supply investing which initiatives, cost in We all And leverage this have our improvement we ratio, net up year. progress continued running. levels. the Our maintain on while fiscal did the our which made we to of the from strength of chain for vast committed savings remain service a to X.Xx improve meaningful to as led lowering to

Let’s on a actions Slide pricing X. priorities, look our of starting inflation-justified take with the at impact closer these

offset almost XX% As prior to ongoing pricing but to peaked you in can QX, due inflation. our COGS see, remains actions year above the

norms bit, but line remain During better below than the consistent in fourth quarter, elasticities and historical fairly or did well soften a competitors.

was is margin in execution Slide which on strong detailed driving instrumental Our recovery, XX.

in margin saw was This our lag lag prior improvement, strides as year. in effect up fourth time fiscal inherent of notably basis inflation-justified strong in the ‘XX discussed, there is XXX great gross our consecutive compressed previously recover the most we throughout took through QX to points that inflation to margins cost and have fiscal ‘XX. between hits temporarily when able we to we when results and quarter are an margin As recover quarter the We compared pricing. third

Turning investing rebuild service which to we inventory year. continue levels own initiatives, supply of XX% to XX, advance helped us to chain our the our we Slide as exited fiscal deliver to

room back While making to cybersecurity That technology as and are chain, ‘XX, the it’s not modernization in strong including far progress with in supply said, investing we for progress so at experienced our in continues quarter pleased normal fiscal such see Americold. normalize. are transitory environment as we and we yet the operating to disruptions as in more improvement event the

the sales innovate continue the during launches more ‘XX, retail our fiscal And we year. ways on modernizing key have in of to The our now generated Slide through in space, during innovations innovation. investing unlike maintain of are the that XXXX launched last brand new many XX fiscal strength, total. highlights billion since brands in which nearly we half focus fiscal representing one with since pandemic $X.X persistent to we than product

Importantly, strong Duncan our built has sustainable and EPIC. Slim SAVAGE Bowls, innovation Jim really platforms, and including some Hines

of Our the have our domains focus strategic and engine. frozen innovation been snacks

XX that and their highlights, growth. domains Slide growing As we’ve architect helped

retail portfolio, consistently the past which now have snacks represent within respectively, and frozen XX% share categories and in our years, of the X% and increased these and frozen sales we total we growth. outpacing grown X% dollar growing our food and Within strong almost snacks Over compete domestic X have our together domains.

our brands This Conagra of to competes up share how frozen, to growth $XX leader over sales is represents effort points peers. approach which at become increased to X% has X XX nearly the strong grown is part And basis CAGR. the the support billion billion, category which our of closely food. modernize from reinvented our as One the the of frozen representing we to Slide years, a our that frozen. categories Since XXXX, Conagra playbook. continual unit this more brand in by testament the a Looking in which past Conagra Way our shows have to example $XX and XXX in fiscal timeframe our stack strength frozen to growth

you frozen or XX, product fiscal XX of of year As held our grew even Slide in top on see unit during ‘XX. share segments significant can X the pricing

same true is portfolio. snacks our in The

can our ‘XX. and platforms you largest As unit fiscal snacks gained on two share meat during popcorn microwave snacking see Slide XX, also

the let’s Now to year turn ahead.

we few be XX. to That that normalized continue include we environment. emerge a from As are cycle, more inflation unprecedented including transition conditions, and outlined and operating the to on COVID toward will headwinds operating fiscal transition a tailwinds super ‘XX Slide both anticipate a

Starting the throughout supply that persisted chain with fiscal discrete disruptions wrapping we be will the year. various tailwinds. In ‘XX, the

will continues of advancement record benefit initiatives our success. investments continue from the expect we in upon our strong also track of to and environment deliver As results, the operating our ongoing building to productivity to we normalize, innovation

Now, let’s talk headwinds.

are behavior, new period the but that can shifting sales taken. initially in pricing is and scanner dollar the consumer in year weekly to the down of consumer actions were as recovery as First, pricing see the in are behavior expected, beyond shifts ago data, when rate occurred lagging. food That you companies suggests wrap coming starting effects initial volume improvement elasticity

than down priced dynamic it, the a lower it’s Easter than X this and the hunkering several competitors. we items why, been shift the now, just this down categories more across years? it more headwind One it for buying consumer including just behavior we seen this steadiness importantly, our a see to as trading within intensive the a potential we after has about several alternatives near-term being trade at dynamic year. have in to seen are summer travel And outlook. slowdown. The behavior stretch fewer root temporary captured possibilities from where to heard and Overall, many it usually of for consumers budgets, likely We Rather, since is category. overall, their broad-based we this. reasons have have have we category but question last view are a There overall an from is, given of consumers as down. There is not why shift as

second appropriate headwind, to price become very we Moving while that. have adjustments brands and few reflect a limited, will to we deflationary make single the ingredient seen

reduction prior compared earnings and of Ardent in its contribution ‘XX strong compared fiscal decline the the Finally, performance from performance to our impact pension to year. income Mills will

we maximize execute our will invest XX of continue one innovation business. highlights our this year, slate to-date. to in our And most our biggest our playbook and Slide competitiveness To investments, important

‘XX features Our restaurant meals, a of innovation fiscal mix value-added convenient, compelling licenses. lineup and exciting experiences

significant the year. us our We the of coupled effectively to most with innovations, new support, and the conditions. marketplace our These expect navigate help customer QX of by consumer the in build distribution dynamic and end will rest innovation throughout be

for fiscal ‘XX. outlines our guidance XX Slide financial

$X.XX. to margin operating X% XX.X% expect between fiscal to organic $X.XX sales EPS of adjusted We approximately and over net of XX% adjusted growth ‘XX,

is As together business to EPS from the which income. expectation strong continues and Dave processes the to growth Ardent from will Overall, contribution expansion. unpack pension further, reflects lower being muted are sustainable all our guidance from and people, mentioned working strong and strong Conagra margin previously our underlying drive Mills by which for brands, growth benefit impacts from operations,

over to more will detail. With I that, the to pass the Dave call cover in financials

Sean Thanks, morning everyone. good and

great us maintain to to ago, metrics. made the drive X while strength and strong and deliver full margin time successfully operating as implement ‘XX leverage that all a navigated net noted, our on pricing, year our Sean all enabled As of reduced our year from exceeded inflation-justified on page. this recovery, priorities rebuild original to challenging We This on progress delivered expectations inventory fiscal results brands. levels, have shown we environment investing gross this

full Slide XX and fiscal from the highlights quarter year. our results

a increasing Margin delivered fiscal operating for modest full up growth with XXX This full the margin our by ‘XX, margin strong growth we to for X.X% top delivered, year was During elasticities. year net inflation-justified fiscal EPS adjusted ‘XX contributed year. driven priority adjusted and and our recovery pricing by compared organic XX.X%. points strong line business XXX basis basis margin fiscal sales ‘XX, and top to of adjusted points enhancement gross by full

during transitory by disruptions fourth in XX the organic for increases impacted by and driven in cybersecurity price at and partially in impacting to We full approximately decrease Refrigerated by growth revenue sales net & for our during primarily volumes. a full the from both our growth points our in inflation-justified sales the ‘XX. of fourth year. Snacks shows this we were Slide in Frozen fourth offset supply XXX Despite improvements approximately basis impact bridge Refrigerated disruption sales in quarter, sales discrete the quarter. for estimate volume quarter points Refrigerated Frozen, And net the quarter. negatively chain solid & year from X.X% pricing Frozen that basis Americold, by the our full were deliver Grocery XX in were other quarter organic mix, the and quarter. quarter This delivered fourth actions pleased all & & and The incident sales an year net impacted segment segments was situation segments fiscal

We our margin on Slide XX. operating adjusted bridge detail

basis partially benefits were X.X% productivity point continued discussed, margins improved margin net gain the Sean from on with margin respectively. supply mix a pricing pleased have pressure points benefit quarter a initiatives. are our and improvement, we quarter chain a our productivity in inflation X.X% sourcing negatively drove QX. X.X% and As inflationary XX progress gross third delivered offset We basis and XXX These up impacting strong to market-based by market continued realized by of consecutive and during from price

The decline write-offs of column. the this investment sold compensation and believe was increase be from both in captured calculated this to versus on a sourcing. net cost inflation quarter, more more point format market and gross applied callout productivity our basis materials going our inflation as our in netting market-based SG&A margin margin goods Previously, One in of by meaningful an sourcing quarter. additional this strong is our by fourth operating asset improvement and our increased investors expense and transitory slide, X.X% QX offset XX.X% will ago. market-based A&P headwind Adjusted which for a change was was We forward. in the incentive year was than higher XX

reserves & segment Frozen with to excess unfavorable the overhead margin with by margins continued performance Snack improvement XXX absorption. margin points down operating Refrigerated inventory its our strong a manufacturing year in for details QX. versus points basis and increased were along primarily operating due margin operating XXX profit & Grocery XX inventory, seasonal Slide ago. basis for improving adjusted quarter,

earnings driven due quarter, International while basis increased The asset operating operating primarily were also testing driver to charges the adjusted impacted XXX The discount release, segment our impairment transitory primary the rate in margin write-offs. the margins our segment adjusted reported Frozen in of Grocery the the from pricing, to XX was as rate some negatively our in by results & points goodwill Also, Snacks and basis our profits down highlighted Foodservice interest & increase impairment annual intangible environment. primarily segments. in current Refrigerated points due

mentioned and adjusted EPS for offset fourth EPS interest higher postretirement fourth previously. was the quarter X.X% full QX profit method our the operations In gross by shows investment flat by in ‘XX. A&P XX the SG&A EPS bridges and Slide the was more offset from fiscal Total benefit equity expense pension lower adjusted the down and as higher income, was earnings flat from and taxes. year as and for quarter, than to operating compared in was increase profit increases adjusted adjusted

which to our profit The benefit the $X.XX, interest that On attributed growth and the the our of strength the business. Ardent the was year-over-year of of from EPS operating offset joint bottom half XX.X% Mills venture of you by was entirely expense. underscores of pension $X.XX increased increase underlying can see slide,

from XX at year. our fiscal flow X.XXx, Slide ratio includes cash net ‘XX, down prior the was X.XXx leverage the of end sheet end key our At of metrics. balance the and

reflects Our investments levels. net rebuild to inventory our continued operating from cash activities flow

support we of from the ‘XX, the positioned forward, year sustained the at across down Going $XXX to timing prior in $XXX to due are million million Year-to-date of end categories. CapEx fiscal projects. was well demand

$XXX ‘XX to continue repurchase a in from year to prioritize we up paid in million capital returning million fiscal in versus $XXX ‘XX, we as to fiscal ago. up million and shareholders ‘XX, shares dividends X.X% We $XX fiscal paid

and including I’d like growth for margin approximately XX% growth our guidance net expectations a fiscal organic to for fiscal of operating to reviewing spend $X.XX Slide between adjusted metrics, sales XX.X% outlines EPS between over X% three XX minute our to ‘XX. key our $X.XX. adjusted ‘XX,

net-net closer elevated anticipate investments and and the X% prior $X.XX. the innovation year A&P the $X.XX from by drivers expense approximately interest of to a look EPS we offset approximating an interest our $XXX underlying our EPS our Slide on SG&A of people, to adjusted at Let’s profit XX%, to rate X% adjusted of take period, to of business to increases guidance our an be tax improvement rate to higher adjusted adjusted our gross adjusted Compared to XX. impact operations million or in in of support growth continued EPS and

as income in underlying our offset operations of lower We as by our be to the rates. business Ardent also pension growth expect from the to higher income well Mills due interest joint reduction venture

in As Mills wheat management market by we previously recent and Ardent conditions volatility particularly discussed, venture’s ‘XX favorable fiscal effective driven strong had the through the markets. a

results strong business. of more As million normalized historical is Ardent operating environment, to expect $XXX continues ‘XX, as Ardent fiscal in approximately a as we we income a Mills which still very toward a lower mature performance transition to relative operating

‘XX XX. supply our guidance operations assumptions anticipate few additional I chain reflected see outlook. to improved shown our will which in of in of to of X% goods to super pricing elevated early targeted inflation effective the sold help actions the we as that with approximately emerge ‘XX quarter will costs. second from inflation in offset Again, fiscal pressures behind easing here expect is ‘XX, We cost inflationary unpack net become and a continue fiscal we now in on Slide inflation-justified cycle, fiscal

$XXX as expansion to supply we automation. chain a million of a on our perspective, growth and to and expect with make focus priorities spend CapEx approximately continue support investments productivity From we capacity

gross million we $XXX investments of drive making savings We also expect fiscal during productivity the are ‘XX. to approximately

leverage on of to reach track target ratio our fiscal year-end leverage approximately end to Xx the ‘XX ratio and net of remain X.Xx a expect by fiscal reach and by of net approximately we Finally, ‘XX.

XX. morning, reiterating We transition on fiscal in line dividend a is long-term This targeted operating Slide at here our to are reflects in outlook a of a Investor annualized see our toward our financial ‘XX This our Directors environment, normal the the we we shown from Board algorithm in commitment as XXXX, July with share more $X.XX a unveiled $X.XX announced ratio. as and to share. in we and confidence our payout Day increase per approved X% that increase

up, for we to we execute drive We on continue fiscal believe Conagra things our to and made progress sum as for That shareholders. strategic priorities To for prepared outstanding in positioned well creation. ‘XX value value is call. concludes our long-term today’s remarks

for open it to questions. line for to you back I’ll listening. pass the operator now Thank the

first [Operator ahead will Instructions] question. Andrew Barclays. Please question with come Lazar from Our your with go

so thanks Good Hi, morning. much.

sorts how a of of hopefully. as in back on pricing that period volume pricing transition a concern And there sales environment like pivoting sounds talked and timing negative think the of of align. it’s to could moving investors curious, the between point if few among from more aware, sort I’m about a terms fiscal the be fiscal environment sort too realize of hard put years past curious as there benefit consumer I you’ve of unfolds operating the vim and ‘XX about it perfectly fine some Sean, don’t a of of Because we year growth this, So organic the much. anomalous comments light do shifts, normal perspective. the as ‘XX sales to of pattern clearly year of Thanks on growth in how wanes? some out some you’re organic from is ahead, how playing recent you but an of I’m behavior see your so course,

it and Andrew, I’ll you color. big morning, here, more some flip Dave give sure. the Yes, let then to Good with picture me to start

macro, be of normal more that’s back transition and right. to you’re XXX% everybody. a going First, true It a is year to probably

as improve. will trends Dollars occurs year will there volume gets wrapped a and that unfolds. come down, effect as the will yes, obviously, be pricing Second, settling

can Third, that exactly factors And play. be as from reason at month. is that month there is time are the linear to effect not you imagine, specific to simple likely settling for

supply of you’ve So consumer the got particular behavior shifting chain the ago dynamic. disruptions period year months, we’ve in got

us dollars all prudent while everything And this, growth see. say, feels So organic sales year what shape X% on more. we to standpoint, of guide can for for I’d Dave, given is you net we trends from a of unpack little the volumes, trend That expect. given full in don’t we as do bit a that improve we the year unfolds. And the expect

Yes.

So our net approximately of Andrew, let guide – X% me organic sales. gave we

a there different the went that on into lot dynamics landing of So are sky.

just So to of go kind the to try give and color I wanted try you some and through to takes key with to help puts cadence.

to beginning going not the by give of the exact so – will on first But numbers pricing ‘XX we wrapping thing at is be quarter, obviously. QX. fiscal We’re

So mix it deliver starting significantly QX QX. stronger will after but price will that, in slow

mostly canning As supply you recall. with can chain know, then we and is had ‘XX at today, in disruptions our innovation shipping our that of in the Jackson in in second slate started our wrap year. half, We showed starts if we and QX. strong impact obviously on already fiscal It’s plant shipping. meat The kind that this several you that look have

As Sean of wrap. starts kind as as to as far and look year, we slower at of rebounding estimating the a volumes we’re talked about, how pricing

deflation improve move a through few year pass-through some There So as is volumes specific going on guide we volumes. do in full a give year, the fiscal expect categories. we’re but not we to to

on some our So a few our brands. prices of lower that dairy result in edible will pork oils,

as which we mostly in We growth with fairly supply consistent couldn’t during and and trade And International it’s that promote constrained those brands then businesses will will strong year. our incremental we do we for in and were just Foodservice year. expect business, to, have much we want merchandising ‘XX the as ROI, this and around

So get you some color X%. hopefully, on that to we how the gives

Thanks so much. Appreciate it.

from will with JPMorgan. Our next ahead come Ken question Please your question. go Goldman with

wanted asking is any bit there. customer I if And levels Hi, abnormalities about the quickly you see thank are and that shipments in where I’m your you. even add part less medical, to reason were basis you XXX Refrigerated terms just channel that what of maybe it inventory in of ask today the seems your takeaway. saw measured impact & the in we back Frozen if than a point little

a looking get you of just ahead. trying how that So see to sense

inventory Yes, Ken, levels versus any Dave. don’t see our this where historically. significant in customer difference is been we’ve We

at was about, and you’re & talking look our for you is down the price/mix If what Refrigerated XX.X%. which volumes quarter, were Frozen, XX.X% really

for X.X% the was quarter. consumption Our

to So XXX there shipped was about basis Ken. a we below consumption by – do plan about that, We points.

below of in in shipments expected we So Frozen. QX & to consumption we Refrigerated QX consumption ahead shipped year-to-date because be

we normally we full look if ship to year, you basically consumption, do. So the at which

of there a for that drove So were Americold XXX unusual yes, Refrigerated the & no was point negative customer impact situation And Frozen dynamics basis for the that. volumes quarter.

Thank pass will you. on. it Great. I

Our with will ahead from go question. question Stanley. next come with your Please Morgan Kaufman Pamela

morning. Good

Good morning.

in from inflation you anticipate modest the about you pricing additional few Can in lowering prices talk mentioned then outlook to increases? fiscal lower categories more prices in last ‘XX, although well? here? You you other years. list offset Do pointed fiscal those having taking And pricing compared more expect you product to key the categories. to do some to few it’s as a across much ‘XX

Hey, Sean. Pam, it’s

this me I and tackle whatever miss. going Let Dave

talking number a categories not portfolio, in got that of large pass-through terms scope. the more ingredient. we’re might got what call piece, deflation significant small a about really And as are So of you we’ve big surprisingly, – picture we’ve know, you single

that are on the actually those have ingredients side. And made of – deflationary some are of

those the So that exceptions or down. go tend up are to

seeing fiscal And of coming things products outlook. the year so our dairy, meat some we’re during like down that are oil

piece a it. So that’s of

in in to the it’s taking pricing helps to terms surgical In back But getting us continued but the yes, that Dave level, that. really inflation. some company – range we’ve the overall still is offset a X% us. are got select on of tackle with – pricing, categories new at and covered game as productivity inflation It’s the we that

year. and it us add is in cause come anything pricing it few us, take with you We’re Dave, to some that? but to in early going it’s to still want businesses able see the a to surgical to down,

just we we pricing will I we our early on would reiterate, in to communicated ‘XX. took pricing then products just effective from there tomato-based and QX, obviously have wrap pricing add, be see And will QX. fiscal the customers,

We’re seeing tomato ‘XX. significant inflation in fiscal

your we Pam, price price contained no, those pass-through downward rollbacks in limited That’s broad-based or very highly in the question, don’t last single to our categories see more adjustments way portfolio. a to across And Yes. ingredient, category.

Great, your versus Can thank guidance XX for to into unpack And you on basis XX you. reinvestment? that just through expansion points that gross of What’s expansion. operating embedded margin SG&A bit? a margin

Sure.

operating the improvement. improvement coming guided we margin from is So margin to primarily gross

as So together should the same approximate the they taken did of sales fiscal ‘XX. percentage A&P and in net SG&A

wrapping some So talked the and are netting and a then productivity gross which absorption are that negative about, about. chain pricing for And the pleased then programs fiscal Productivity our talked QX improvement margin that be drivers had disruption where on business million, we tailwind just to the targeted then mix, and some ‘XX, in that with should about investments. price right now very supply the key margin I of overhead $XXX against fiscal QX of ‘XX. costs I the talked we we’re

So to would say, drivers, to the they are I the key guidance. get

you. Thank

ISI. David Please with question will ahead. Palmer Evercore come from Our go next

strong. of going best us diagnosis you’re there. for pipeline doing looks and categories I frozen Thanks Conagra your the some and share some and those you’ve your to snacks. good you in speak them. to growth I’m Thanks. perhaps key losing slowed a is wondering to few is tell categories I and like are categories But to for are outlook going what’s those innovation great so popcorn entrees, ask you? maybe growth mean, frozen vegetables, energy long-term much. It these and have just question you Those that lately. shown wanted of what categories not are be obviously, a if these, on key frozen on obviously, could because

Hey, David. Sure. It’s Sean.

we was us strong juggernaut the a and I for super QX with saw to presentation been it ‘XX, quite has in now. business space. But year. some overall, future of of the bullish time frozen noise Americold have objectives lot a a discussed. we for lofty number very we Obviously, in today as plan fiscal Our broader shifts remain that that on had of deliver And behavior our the In long-term you consumer another through shares, tools over our more overall, we been chain in experienced, good supply vegetables. like the very certain we saw performance as CAGNY, pleased there gains overall. mind, in keep on short-term in with playbook. low are share respect which category, share vegetables, With in challenging we’ve categories categories in feel to long-term, disruptions Obviously, our made you the tier, windows, at the we we but not of And focused commodity discussed on premiumization more earlier.

playbook we over central to commodity bit finished drive to pick bag continue in we more respect of remains across volume to prepared of product slowing really vegetable vegetables. industry would sync our there a as So an mainstream improvement then been have really premiumization be volume with right snack strategy to eye birds a value or the dollar more kind decline. of just element there about and that a any up a is And volume and trends category where down now, some there has expected of other with see food than

And travel, behavior, a do shift aimed outlook short-term consumer is we more like in can to to Rather, label interesting it at consumer trade point stretching of we point tied things be other cover and we a a expenditures that budgets phenomenon, And as slowdown to softness, in but to mentioned, does that data materially have it their down likely private forward. very is factored that’s into not our behavior something related a what I to, multi-category again, does appears to it’s like of see SNAP. or that bit that the shift. So go like likely as that. is

to keep mind of consumers. on and brands invest top to and other including snacks going with popcorn We’re our frozen

Thank you.

will Ross come Our go next Cody ahead. with from question Please UBS.

I questions. and color our just can want there. And taking to one. so, in for I’ll Americold recover quick Do follow-up the pause a fiscal expect the disruption. for on If you you real start Thank you morning. Good when? for those detail sales next my you before ‘XX? Thank second to

Dave. Yes. it’s Cody,

So disrupted we were that shipments. in obviously, on situation,

we up to of up catch month backed the May. had So during were and

So didn’t QX out, would anything flip we QX. quantified which just that for into get

shipments didn’t the just ultimately out get door. it’s So that we

So that’s that.

Cody, some out ship of probably while. couldn’t that stock in regarding we when is that, a Just we for were stores

the they purchase they if and consumer sure that they that products, something couldn’t I’m shopping needed So in our to looking trip, was one else. of make to buy grab some

not this that probably the at that point, get We’re consumption water bridge. under back. is loss to But going

And then assume that the into next sales watermark high detailed be for question, before that tangental the for just to you wrap to is XQ? XQ shipments for and XQ of Understood. the would organic also because the just ask year XQ fair price that around it my going I from

We Cody, from the mentioned, will price don’t quarter, we impact have guide I mix. – by still but QX, we big as

Ardent than we that. you quickly, And real just to to to then I Mills. It expected. continues want Thank for Understood. pivot better perform

How that $XX at the on weak of And income in million $XXX guys you for JV the visibility million? does to of spike prior contribution guided the what You north prices. million for to do have prior noted assume year. prices? And the weak think calls, I point $XXX was you this much

Yes.

come level you them is level. you really can We of personally in that to Ardent. with business came made very lot fiscal have the the They guiding can to The in only assume they and where so been I details a is profit we are to have with consistent that visibility, business. similar of a appreciate and the pretty review we thing have young great We through a ‘XX, continue It’s business with It’s business. XX-years-old. that right, have it’s in, business such the at investments The grow. closely.

continues of a aspect their then to the So, business, do well, business they really core trading have too. and

that’s a business competitive So, it. has of it’s in It advantage a growing. lot

on business. really business. a And bullish so the are we It’s really great

I Thank you. pass it on. will

with ahead BNP from your with question. Max come Paribas. next go Our question Gumport Please will

the is that to that nature? And called am points of the out, data I seeing Thanks in With to any Hi. in then Thanks you very question. curious you what commonalities short-term for there you share? if category the shift much. suggest consumer regard behaviors are impacted it’s that

Conagra change the when exactly of that’s XX-week a price because And terms and off I I about elasticity modeled effect, And that basically everybody ago. the the all from data. in question, is to was lagging of change in Max, when where you out is to volume talked look on the that that and change that. between we space an difference consumer over dollars just really in to entire data, the people X-week unit see and a what improvement and it get the ago not as the at by periods. categories volume last in an just summer. it’s five year volume pointing data really everybody’s see peers data a scanner the same ago uncanny, the extremely X-week I the X% diary we And XX-week that, are behavior. you trying I out, in would several look just off a initial probably if when trends. data figure wrap terms don’t of volume things that band and are looking seeing performance it’s And food terms nearing at down served think you are when to this, A basis, versus year period us the or out. is see we is channel noise lot trend a in what improvement price, do sync as the of of the the across XX much we or And versus for Even it answer wrap of you a years category, place of volume improvement data I past individual in X shift out in exact at our data you of of pull kind came unit that think should Well, ending you if have period included tight better it. see there. behind And roll in by what’s pointed base last see roll an exactly, to versus at like bit is you to that whether And you

are we carefully. so it studying And

eating thing a trade Importantly, know it’s alternatives. less. back down. It the cutting looks aren’t I not lower-priced down and call I people hunkering within categories like individual for sure, to And optically more what one a

they So, their to making it’s choices – manage budget. are

expenses, time period just As imagine other that to continues extended for it’s how of seen start haven’t eating happen. which an suggested, to likely people and I unless I cover less, hard

Understood. Thanks very much.

question go Our Sachs. with from come Please ahead. next Jason Goldman will English

of turned for and Hi. the rest, way, on folks. ground me a Thanks by Oh, Good already. slotting great lot year. can We you in. a morning,

few And that supply drive intention net What mentioned pricing the promotions enough this are expect lifted. You targeted would their that those you your more to to a constraints to and being brands constrained, intensity now brands? be rename that were promotional deflationary? are

Yes.

certain opportunity And we haven’t there. give XX%. expect me on have I like without And those on some are category of the more now going is In is we Conagra, always an promotions past, there simplest to because supply I that incremental our sense, will Jason, in want competitively. how what’s you those. positive Let building are environment, drive to speed do just of for been see have is hot as it Again, topic hand This servicing promotional of at chains mentioned tipping full really above volume holiday the we we okay change. to what promotions with ROI. the you a that a kind is

sell fire the where season. most didn’t year during We the fish our some Lenten example length you fish promotion last because on we usually recent that a in promotion we high because was line. do So, season ROI in had very fish on do lot a of the

of of can that’s type even the was holiday had do an more because we and previously. where thing the demand chain been very constrained example some kind issues – of So, things Eye supply with Birds

So, going to I think are drive think on should help because do going volume. a And that’s quality more that. it’s frankly, thing category to good it’s healthy you competitors thing. investors see a good And

discount, shopper are off we what fans to we last did train plenty a deal. is of where the that We drained conversely, deep X of years, kind low ROI and Now kind buy that. not period that of big the promotions Conagra all on over it on got that of swamp of the of history, stuff. its

the categories in space. of least grow how companies one simple. for It’s are this promoted or is you categories. that reason the We And not

categories look with category grow it on support, Palmer’s Frozen, do years You high-quality when change realization. we And what at for and that playbook, did the dollar it innovation, great display. point just Frozen and marketing didn’t David quality the anything. then when was innovation drove from growth and playbook real we To around

to some promotions. that we like are kinds with we to in environment stimulate probably harder choices players other to So, don’t resort deals and But see back is those more making the current of the consumer cutting likely units.

of have that seen not to-date. lot We a

first So, again. this that’s wouldn’t a good sign. be surprised isn’t to rodeo, see that we our But

is the really, we And I competitive what’s for business. will detail, say will carefully. that monitor our best do only we So,

come to quarter. but And give don’t the carrying inventory know guidance, Understood. you Mr. quarterly back Ross’ to his in am Sure. are you point, in first going I to question. I rebuild

Mills still has wraparound pricing. got have Ardent You momentum.

looks first the full that with declines flawed up anything you a that of year line remainder gross really bottom are solid and set of you the would quarter. year. to seem easy comp. that guide, in got for have the it another are Is You and And It context like margin really top throughout expecting suggest there thought process?

can it you the we because think directions, and this And about different and got I pricing. way before year, simplest and the flow the Jason, I intend are you year in that, got is to think you they ought volumes. that dollars think cadence wrapping move I right, the

see, ever wrap for by do And and will in to volume so early have quarter improve. as guide soften. just of are are pricing going you are is don’t to yes, then trends that, And then variety dollars that. to that a you there, going going we as we reasons, you one not And carryover stronger is should

The linear how mentioned other in quarter-to-quarter is know it terms like flows. in month-to-month, it to this not to would base but way, Andrew, going terms I as a wasn’t to everybody of that in I thing drive be And to that’s the wrap got and of linear it’s have we settling are the have do. that business – to we for got continue what effect this will get the factors period through when long-term we a these going to lot of occurred. and we just be

pass I it you. Thank will Understood. on.

Our Bank America. from come next with your go Peter ahead will Galbo question of with Please question.

question. guys, taking Hey for good morning. Thanks the

morning. Good

morning Good Peter.

the Dave, increase to a and just of little target. trying I math, the do bit was dividend on of just leverage back envelope the

below help that? confirm to know would guide, that just you a I a little year? you us wanted CapEx Thanks. seem this cash can with you – land Just I bit but just flow have it would for out free $X.X like billion, but

Sure.

‘XX. significant look you fiscal capital. in made We if really ‘XX investments and at So, ‘XX, working

‘XX, flow our fiscal not with great free cash able as end at we is, are shape to like did the we being good inventories, debt wanted convert our to. in service levels. But news to down So, we pay high we are

need. We have the we inventory that

fiscal to So, look as at of we guided ‘XX, net expected leverage we X.Xx.

in with been slight We ‘XX. fiscal in expect to And we debt tailwind has working fiscal for to pay where cash expect actually down it a capital flow headwind, be discretionary ‘XX. ‘XX a

flow in if this which capital $XXX CapEx, So, million to, modest approximate ‘XX in we free on guided should business. we working cash improvement, you at conversion with look XX% a Conagra

look at assumptions dividend the debt So, payout and and pay-down on that that’s and we on drives allocation. it, capital everything all how the else

much. it. Thanks very Got

Powers from Deutsche question with Steve next come Please go will Our ahead. Bank.

morning. thanks. Hey, Good

as talked Number Number two, you to behavior, think think a temporary, think of in that disruptions one. net are about that on those benefit full you question but have a what it’s how to the of consumer kind way you about the these chain wraparound is, as about items couple then elaboration couple deflationary transitory one, I of aggregate within Is temporary Is of – on from some supply of that of pricing, of and kind the as lastly, clear. down that’s number top that year ‘XX and for couple the a terms pockets catch the talked about basis, that and perspectives transitory a you hunkering already, Just line. just the on there the – we The you sort ‘XX? assuming correction. way years. quantify wraparound on in of year. up over on And quantify assuming of is in pricing of shift I net what to a the are

is there that ‘XX assuming are for go improvement as i.e., improvement you that really comes duration ‘XX Thanks. you forward, the or the we of in are So, is we down and and of with seeing hunkering beyond? late the

Steve, with for start Sean. the it’s flip back I to Dave Hey part. the will end and it beginning

of because this our perfect of multi-company at without diagnostic is information, softness. So, what I getting some kind was at looks multi-category

it Our is conclusion transitory. is likely

that the normal Our of more in consumers as type in revert it, adjust. outlook the to and and our of call assumes earlier headwinds first will the guide behaviors of assumes half that, year year, really some those

in In fact, getting changes. the people back that back knows, there some and as a it speculating there school is phenomenon are are are summertime you who get to groove, people

quickly conservatism year. the Dave, go it of don’t baked some in of what back how we it We that just some give in a terms it’s but we to front we on to color have a you. suspect you going directionally to know, precise day about part of it, not exactly is kind But trying peg over month. or to to we in are thinking when yes, to the are there normally

just that. Yes. such quarterly is would going to desire get know Steve, are I just everybody there we a to burning but do say for I just information, not

really some else. pricing of and to answer my I disruptions in of the methodically to through with kind go tried Andrew’s the and wrapping and question, on think everything I items pretty guidance the of color around kind cadence

there is together a to like estimate. put feel pretty good I there So, enough

Yes.

thank you First of both. all

And what baked if cadence for On on you know to kind just it annualized in focused took On the actually aggregate. about am basis, I the last disruption in on the net we second year, pricing basis? less part, that the one. chain of number just what catch an annualized of supply quantify thinking of trying that wraparound and any, what benefit, up, you deflationary when Dave, is you to I is an kind the have givebacks do – then and then what want more just pricing net

Yes. – And get I get the given just figure because and don’t want don’t we to dynamics want into exact volume net we through, kind And you just you get with getting of to pricing. volumes. out then very that then precise into Sean impact the talked on

drivers. I think you know So, the

outcome guiding are know You we to. that the

it. keep will we So,

you Okay. very Yes. Fair Thank much. enough.

Thanks.

Spillane America. go with of ahead Our Please your next question. with Bryan is from question Bank

follow-on part manage just asked a that actually end about That to by Is takes a we of the fiscal little Peter my to there you the now will what or sort thought. the Xx? working and longer guys. you capital deleveraging helpful. need pay-down that morning is term thinking year ‘XX. longer to how That’s Xx Good cash conversion maybe a impacting maturity you guess I bit free get behind probably that of was flow see anything to of questions.

to seeing there. we kind XX. on free tried on we all, our good of a first down is the how actually color Paying debt give see Yes. I cash anything – don’t should out No. we put This some we of material I the time ‘XX. flow. have that No, are is first date put that impact priority.

clear that. I So, crystal will be on

going rates with interest the obviously, where on we of debt. that’s are, variable. up, our of X% XX% we so that still XX% cost have fixed, pushing about is rates And are Given debt interest that it’s

have to is financial to down us. cash real that paying benefit So, a going

‘XX debt. So, beyond. flow generate really very down the our and That’s motivated to discretionary pay we priority for and cash are

I should extension with on the be slight on inventory before? year, pacing side tailwind that’s And then working capital of perspective, an capital guess the source working mentioned? we through you as working management about Is is there from anything the anything there comment the capital of thinking an the just key

So finished do we on with, the we days but that are generally, to too, very right. a we comfortable business, seasonality ‘XX at the have hand

So, flow, quarter. when through inventory our you our as go the look we we usually at into build quarter second first

back for it normal So, year work build of and the sort seasonality But capital as course that’s the will progresses. inventory see comes our year, during an build the of Conagra. then you

Got Dave. Thanks it.

you. Thank

will ahead today question last question. from come your with Smith go Matt Stifel. with our Please And

peers softer in ask part Hi. elasticities on level. that X:X elasticities, historical more elasticities fourth quarter, below consumer but follow-up your Good of the line the know store. weakened question morning. I Wanted with the to level, in that overall a Conagra softening fiscally and overall moved has the have led for and elasticity total Conagra’s and to relative to historical we seen has peers more towards And the were

in guidance the So, first was that questions, when you the line thinking the the near seen we half is impacting of disruptions other other we with think more answered more comments of elasticity holding fourth and have some some what is have quarter are recently, or of the Americold about current in how the trends? and year about to you

elasticity No, you a I what simplistic think is in too you calling manner. are are looking at far

and price volume that’s factors happens in are saying You change by because your elasticity there change, with many at volumes. at calculate that into total can’t looking elasticity go what total looking

has That remains for have too but level including pricing get a those peer And shown our pricing here, true change a actions recently in brand brand technical time norms. to analyses period and analytics a consistently, to elasticity level historical benign compared remains action. for pricing a It So, in not at that set. response Conagra. response demand true measure to consumer consumer to been following

just things there. It’s I is it to pricing As a versus bit a but cost a time, of they elasticities, they environment. shift benign for broadly historical are mentioned ahead are norms, in set referenced, directionally a they coping buying softened tactics a more stuff of to These behavior tactics our of prepared particular The in like about overall remain a talked period little include groups. action the of rather QX, brand’s I remarks, animal. the different response I higher my the not and a consumer less peer

at the net you want of look and to that to cumulative if just are may how effect consumers specific are you brand get what volumes are to to coping get into that the product, higher And got if judging attitude true. the more of granular into analytically analytics the is whole different that is But to prices, they really say, them science. you So, going more and you get you both a want that’s the macro well, of are value understand and conclusions. consumer lower, with

I that detail. Okay. on. Thanks for will it. Appreciate pass

would question-and-answer our session. for I to closing Napier Melissa This turn to concludes back over like conference the any remarks.

hope wonderful we has everyone this Relations And a any address follow-up us happy that joining for Investor you to you Thank have. morning. day. may is questions

has Thank now concluded. attending very conference today’s presentation. The you much for

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