Conagra Brands (CAG) 2 Oct 242025 Q1 Earnings call transcript

Good morning, everyone, and welcome to the Conagra Brands Q1 Fiscal Year 2025 Q&A conference call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Melissa Napier. Ma'am, please go ahead.

Thanks, Jamie. Good morning, everyone. today live us today's session joining results. for for question-and-answer our on Thanks joined Sean some morning and again, during this Once I'm by discussing financial our may this session. and David CFO. We Connolly, be statements making forward-looking non-GAAP measures Marberger, CEO; our which earnings section SEC, reconciliations of descriptions for information, be see our with our materials of filings the our comparability the on introduce including factors, information non-GAAP prepared website and release, Please found GAAP our presentation in remarks, and please the can Relations to question. risk Investor more items. Jamie, first

our Ken And today question first comes Goldman from from JPMorgan.

ask to wanted two I questions.

First, have in bent your not business, and you all see that makers a Obviously, your out hearing snacking and your from certainly commentary tone a we What there snacking a lot right most other was better little snack of now. snack Popcorn on are But positive almost great. on, is even than brands of you the what really seeing more protein your or seeing? we're Popcorn other tone makers, doing business. are

are right just seeing giving a to of What sort trying out is execution? now? advantage Is the portfolio? you So there it that that's sense it of get you

Yes, two, on extremely realize. snacks. it's fiber-rich businesses Snack in it's couple of Ken, And it's a number bit one, Sean. than from snacks snack people larger focused snack other a our ways. protein business. it's business And a I think is different also quite permissible of non-DSD and Number

years we of building business. space, chip of have snack kind a of scale space been kind substantial permissible we So out we've the stay in now, the for and

space. very broadly in kind product. snacks. Obviously, to an our the mix who in or the prepared healthier, can FATTY rich that huge of fiber a seeing to We're premium where excited we're in is meat-stick and meat is in pivot to seems and is. in those snacks, snacking top But as toward there's the are because subspace rich particular, protein snacks, what us consuming that's priorities be anything people you gives So among is business remarks bulk a permissible snacks, clear more our the snack in fastest-growing of sticks, add of all the that's even see more

understand And are more than of comments made away in then the There's eating food? cooking your lot scratch industry what -- dinner. how of I seem of because Okay. the showing because about me on But frozen quickly about would data picking cooking that's cost a that. food. frozen and up frozen that costs scratch partly home. from being to a It

a So that few the or Sean, quite accelerating I do Is data data. in know, restaurants just know pickup trend? how your months? pickup actually significant don't from you're last would it the show over in thought shifting you seeing it much really consumers I a an happen.

year science of toward stuff. behavior things ground or Well, we I us cooking, that. a see because giving really A is a And very rice, and A team talking more pound bag this what demand is see so interesting some our think it's beef, question affordable of data. scratch I'm shifts interesting. we constantly ago, did like

be minutes. be things more than that some to tends is a pivot in we're data But a we Our now, what from items. Even And its point store ago of the seeing shift less seems what the specifically, would you running be saw there's well convenient strength the that prepared products canned tomatoes, of behavior environment. in course. scratch like X year in cooking the do to seeing we're the guys can out back now in perimeter to

on space. the for in and large over capitalizing consumers So because I frozen been we growth out of consumer that pointed have in back happening. our part pivoted years, convenience has engine which We frozen XX affordability. are to a pivot that convenience, see

be about and the we're in we anybody as frozen leaders the We a than space, just in are more else gaining as result. active should as

So to most this and the frozen XX tremendous that's of back we in one kind for offer had convenience, the areas practice, unshakable business. with our the confidence but we we invested consumers the that of last nudge all tracked benefit consumer need is years, to what we've single

comes from Lazar Barclays. from Andrew Our question next

Sean, more of in me, if around your take this if greater reshaping, should a sounded I'm maybe pointed not near-term sort have I made much we maybe if clear a progress bit at least appreciation in this it clouded of thought I'm think, more, in of earnings frozen seen to in in each like And like your past. those would be least on maybe getting of of be today's mistaken, it too I remarks I at snack very back definitely But even notably within a portfolio. But now And other maybe obviously I direct portfolio, a bucket curious to seem longer-term commentary been businesses, of various dilution, progress little a and large different there's most guess domain. to some is of it's some core, of maybe but value from sort prepared parts than creation. Conagra point to the role remarks portfolio the plays good outside. understand to light growth portfolio so to the and right, often has leaky parts portfolio, it reshaping. of benefits mean today's you at made the appear times. the business Because I prepared comes less by with

Yes.

unpack Let you. me that for

have you grilling respect getting do to our Frozen. you True reshaping, is and a unfortunate First, three innovation, the it as assets. moving. With National that But two, flat, our Number long know. the I timing. the I've you a minor just your has with to portfolio we Hebrew portfolio perpetually said to to flat Number in three, deal will way and number and as especially all wedding. like North one, we in a that say having growth many businesses issue businesses in tire of Snacks or times, margins, kind it's like ways. issue, acquire divest reshaping own, in term on season It's growth better the seek we and for we been And faster-growing invest better slower we keep

said, remarks, mentioned progress flow But getting this. our to as make in while continuing to I more put our have a to I leverage sheet So on of our X.Xx. position progress strong and our in balance put focus us cash target prepared all as

that comes value. with a that acquisitions, as not So in means go than you to fit, talking would if above really a number that if to at divestitures, when strategic generate for it's and quarter. And not slower it's this an a bolt-ons, FATTY we're exit growth candidate a or it more intrinsic asset saw or

hitting years, debt to we've cash now can bit this if be we're make we're quite ensure sheet the And over So and to the create and destroy that very and we and the in active continue we a target. balance think value. we sheet done we've not and more value progress reshaping balance that disciplined of it, got on going our to place, do the flow

organic still the a we if maybe I in, bit sequentially quick were. it Obviously, And take for even estimates been It improved National sounds would you'd follow-up. also, be or greater mean the where out a a quarter Hebrew XQ reinvestment. -- it came maybe but Street improvement, some it of hope little still as you but maybe had not then right, I amount thought was disruption, is quite sequential guess, where like gradual

of or that year reiteration visibility even you you full confidence start of of in the I right might what have seems the year pressure the right second the half. not the that So like thought more sort going of I'm the half it the maybe to guess maybe but it is second sort seeing gives be approach the given weighted, than just more is seems way? the the in at

there lot in why no quarter, that's to today. unpack And the it of a Yes. we're trying was question, noise so

two miss QX, a after the the point. other will expecting where vantage second Dave in the is it's and from In mix, terms guys Foodservice, largely what and Foodservice. But is of bottom Andrew, consensus, another One organic my this just versus in dollar after be. we make are to I that unpack sales line is expected we places, you point are

as disruption, me, snacks, frozen well, to was didn't is our not and was as that expect that working outstanding. quite Hebrew investments the we and performance positive in are volume our fact noteworthy scanned share National our the While

endeavoring to can on packet fundamentals. me. noise so on lost in quarter. of detail the That's core we're a it's enable So lot why not we in clarity the There's on

two back just I kind to about of factors mentioned. to other talk over So Dave -- this the

Yes.

-- So quarter. to give and when going SG&A. was was on had trying perspective we be originally some were some on didn't to guidance, QX, Andrew, there's strong. wraps It expect quarter. It gave lowest we we to some be on We to gave we margin be QX our sales color our going lowest

out that to don't try guidance QX. on But give know, specific we there. So you as put we

than So or we for in consensus. plans other internal different QX. than line It just National our situation, than better the Hebrew were was

And so we'll manage that.

by then color forward, year. our quarter the on merchandising in going of did the full comment of amount. highest QX sales make some of As and I quarter that year our It's we would look call I year. the QX the gave good trade highest be also a terms

margins a to gross the of That's We volumes expect and moderate in a do QX. of to of tailwind expect that because positive. our absorption important because down headwind. really we'll get So see headwind been absorption and tamped key a than that's have forward. start as positive, inflect it. We start That was part variables But volumes as our down. some to going do more get

forecast. We So talked unfavorable. a our part QX about that's being of sales mix big in

move expect forward that normalize as We to as well. we

forward. and to very we are pleased expect in we to that we productivity, with continue Our as accelerate that QX, move

forecast playing So it's up for pretty big $XX additional the one, and out of million, our the lost thought -- impact, are, and took XX QX. we $XX two points. secondly, million inflation sales like profit hit then lost much basis then cost the right in of Hebrew that lost And the differences we now overall the

expectation feel So we guidance. are inflation, those to have sight far ROI offset what quarter, like strong given we're a and to Hebrew the so to that see merchandising continue with our with we're things, the And in two improve and going line holding two to and our absorption momentum will volumes expectation headwinds on flip. of start seeing given why we productivity the we each that that's our

pretty it's originally built year. the with but there, consistent So way lot for there's the a the plan we

comes next Howard Alexia Bernstein. from Our question from

questions. two So

The about price first one higher trade tomato the here is then now increase, lapping a next commented to you as just goes have think from especially product that that where be I And investments I going are follow-up. quarter? spend the we're price/mix

Yes.

we forward. to our mentioned, expect overall we Alexia, as sales improve to So going continue

So each we quarter. volume expect improvement

year-to-go, the we going expect full to a but sort in price/mix year positive. that moderate that volumes decline that for do expect start So saw to should saw decline negative, that of forward. be and We year-on-year we rate be we of QX will

the but higher of it's holiday as it's some in going So more merchandising so quarter -- promotion well. it there's have the higher there. into QX, sales we season, is -- holiday a And beginning seasonal yes,

that we we and So given the above planned. the be way sales to the It's it I don't context more out it's taken QX, just of have dynamics. spend want flows, seasonal that what

follow-up, a of a taking of sort more as then And it. question. step a back Got

been you SG&A today number recognize spending of bit more focusing laid that pretty I advertising on within years, maybe a promotion on promotional, a and promotional out For line and is you've still although less little the rational. that

by X.X% trends there some your pullback I of share of are you is light lower significant average. Is fairly at good, that spend saw being sales, -- growth in pullback, think the of in the the particularly looking fiscal category 'XX, X.X%, was than peer advertising affected this but quarter? that the seems about which

the And it Yes, The line as Alexia. frame investment multiple places what's I'll in make to in where A&P The we brand is in the in which innovations, we sure, building, the innovation. than some product opposed actually more of line, below P&L. higher in peers into place is in more investing how and put packaging COGS. brand emphasis significantly up terms innovation of in building probably shows our higher goes it quality quality

XX of have health of frozen, innovation an relentless, as at the the greater So annual has we a the are Meals on almost category been magnitude we key to has an back unmatched And a we Frozen us we're scope said from grower. the driving category opposed and example, over time. now, turn A&P. category in unmatched years happened more That to basis. terms of we probably Look of do -- kind going to on frozen ago the innovation that decliner to as

done number line, the as the just Now we've Instead, efficiently in we particular, from we've the because we and investments realm, of what as in-line so our over and social kind in in to brand A&P to investments form unmatched last innovation innovation. within low of ROI digital the X.X%, taken eliminating to with traditional A&P rate that X-ish by invest has years largely resonance the largely that our in TV. can nonworking It's dollars eliminating been like we we can, do focus success COGS of is years, more you've the working as the line terrific. managed continue TikTok, our seen in influencers Insta,

comes from next question from Leah Goldman Our Sachs. Jordan

up the you comment for more could plays out and in a on of on a see And that? share distribution how to you competitive more and opportunities? you edition meat see follow all category that FATTY the category. any the broadly. discussion. into to potential gains you environment the there, But it's noted Leah. of just color snacking on Slim is Maybe today missing Jim the positioning outlook new I It's how called sticks one wanted high-growth notable Great

Yes. Great question.

because what's meat potential really of overall that $XX meat sticks got is Here's and one you've snacks specifically, and or and billion-ish the lot you'll the is happening and in super a growth more an carb beginning snacks sticks The more variety. latent meat of shifting addition from broadly space, categories snack for interesting. snacks growth that, here category of we're it's material poised into see protein experienced first snacks explosive things specifically specifically. When protein to sugar -- like see there's

large Meat old Sticks. additions stick and cereal, So grow. in varieties the seen categories emerge if what to was the the a you lot meat sticks like one we've would FATTY see the you or, of world. thing, of cookies in days, a a space think as that's back category meat new And That's of normal Smoked

of additive that with more demographic. Slim And so we've do to sophisticated product, Slim Jim since because to what inception. It's been skews tracking product premium we that a business Jim its an older kind to younger demographic. skews a FATTY more is

got it's we trifecta already we're I and Slim in portfolio another to and So now and quiver. our a Jim we've the meat snacking and fastest-growing fit And incremental, with thought as got market our was terrific we've the which the said, Duke's. space leader smokehouse, now in arrow it sticks,

guess, seen across then any your brands also the you given Have the to consumer portfolio? And you challenged. they follow-up, historical expect in just levels? my why assumption revert the differently that shifts they're back wide this norms, remarks, for given they to And to Great. in not current responding promotional the of said remain I you challenged, activity below anyway prepared environment? behavior should activity still Are promotional remain XXXX given in kind further

were promotions supply rational. toward of of eyes the back the think world Sure. but happening see that in levels, of promotions in They've moved suppressed because to key me is kind kind my predictable issues. chain thing were there I Well, is remains it for what's because pre-pandemic

about have the we've things value-seeking is happening. exceptional of in one reminder that very seen diverse the a it's promotional But there a mentioned It's is experience. number targeted specific. of when has And that effect some we we broad and behavior portfolio, we it been not shopping one, frozen. frequency the consumer have offer in kind depth. and it's merchandising quality been really and that still two, is activity Number Our products has been value. challenged And

a products versus we might of lifts we've high put what those that when That's promoted products is have we done the incredibly what But sales, we that because the display. about. Dave are seen at creating historically be negative of a on those talked that seen. things in that they that's a products, mix the dollar have gross And while and our dollar effect perfectly one be might unit mind is basis Some on mix we've fine margins to tend per equivalent.

form to back a with through ultimately offering of the keep what and to really the trying is we doing business really value getting flows we're households is and the that bring households. tremendous promotion a our good that's great relationship we're our do which what So consumer cash for lifts, is portfolio, of because long-term value-seeking strong

comes question from next Modi Our RBC. Nik from

the of restaurant just You on between all weak. Sean, and also right? few wondering traffic at But businesses in-home, many have have consumer there's Foodservice assume the sharp value some lot We've struggled I that out-of-home been the you and and if have these past of opine kind meals points could obviously QSRs a the months and quarters. that seen noise then have the over to interplay. very some you price companies has of

your on a from you seeing love consumer that behavior I of are from would perspective. So kind standpoint guys what just observations

see think eat the I and away-from-home at, grocery the restaurants as into And store. the trade value of of in see downs. people sense, Well, home toward then types downs you more people obvious from of and eating simplest from within the is value, types do one seek you restaurants away trade

so And that. seen we've

managed so protect to pricing the we've Our after unusual as do today, back and the after margin has heard to this that in our Foodservice, claw that. to you've remarks in focus cycle, worked super we been hard COVID environment in of and kind

do that long unprofitable and the continued the managed at for most happening It's live And much do the ways pretty value-seeking is behavior. you're One the pivot stores. Foodservice that to the into list. the think banner pressures just it's dynamic under we right away the will the it obviously people to mentioned, store really of of by then benefit exiting to as goes term. But are we've is business, their I what within of necessary -- to lives. from home it's line, areas is are which top from top happening the ultimately, some the the convenience thing them But but at poking for

And if Dave a input of that ask terms things are moving direction, just would you give can the or maybe and wrong anything of state be I of question in union right helpful. the on just would kind costs that us a the highlight to in there

Sure, Nik.

a and on us. seeing take cattle big some from year. inputs, just just heat. herd a our it's just expansion, our it So just that's for spend issue, X% impacts had material estimated to we lot estimated. increase a our forecast for the at the originally really, coming seeing -- in spend lower weights double-digit higher we beef, from it's lack manufacturing warehousing, originally and this on for everything few the We inflation, beef to of biggest that we're than overall We're had a it's for is our of as of it's us, And that's and things. our areas. we And estimated even and material X.X%. The down inflation supply the the estimating a change and transportation, top, We're now the in

There's drought. one supply mostly by just driven tighter sweeteners. is conditions the Another some

input smaller more some for inflation like in inflation milk, So seeing what in for spend other that's double-digit categories -- but big us. a us. We're areas are seeing moderate We're chicken. these inflation

we we that's that can handful really that latest inflation. best of But categories call take a it's try we overall we and closely, the do. to coming manage we if So see can, do, the manage watch kind can on positions and we everything of down to where we our

Peter comes question from America. of next from Our Galbo Bank

beef the always clarification Dave, maybe detail I Hebrew on on to National. a cycle, thanks fun wanted for just make a the topic.

comments, until rest it meaningful really of of expect in now a you we think seasonality shouldn't I that be and sticks few year? season And issue of have next the it's wait a had we fish think in to business the of that then Sean, year. behind years that you given in similar ago. more Just It's a with grilling kind the your kind I rebound

you So just that. clarify can maybe

Labor spike. has dogs seasonal a is of is But that Day, there between Hot and business that on of baseline baseline. a kind top Memorial Pete, Day a

So of good if on back following the don't it chunk get to out you that, miss season. a you

right. absolutely You're

store Sean, in of I the and product then snacking some a declines. been think, of And talking of lot kind the Jim traffic nature of store around There's kind you investors cyclical maybe, spent convenience Slim Okay. a important channel. is about convenience obviously versus amongst structural time pretty just debate,

anything So or about within you're just hearing the views that channel specifically team thinking on there just from curious, science snacking. demand how you're

it amount obviously snacking were huge was then been people value. of the cycle moving of COVID into the from literally At super of because then through beginning fair today. onset safer passed, channel because it's in know, COVID, big stores had it a shifting was of of after Well, the well small it all stores space. channel as COVID Sure. then the a But they pricing out the pursuit and and there's you we thought was

Foodservice, So can peak may mass not they gas be go also club and cyclical be you at inflation moving and Those you more kind transitory saw convenience the get store. tend of merch. And of through into people challenged cycles, to stores dynamics. volume the saw because Foodservice not their

So we try remain agile. to

convenience in to strength merchant you I now the temporary example. an in see we're think tend as club right mass what there's is any to stores, softness degree seeing

customers. a agile are. got of all shopper they of where it's and So with meet got we've the businesses We've kind be -- these just to huge

Our next question TD from comes Robert Moskow Cowen. from

maybe was think some could follow-up. you Frozen entrees there deflation fully frozen forward. lapped with you I how help of think was And about year in to guess? I price you next last that other then therefore, Are quarters? you And I still more And and Have then categories? off? just also, few you in margarine, the wondering had that in kind that level quick us rollbacks does & going a -- for the if price/mix Dave, pass-through living Refrigerated

Yes.

so cadence price So the reduction, in & for kind terms of QX. see of we'll price/mix Rob, of still Refrigerated mix in negative Frozen, some

we'll we sort through wrap. QX, As of to go start

So the second will on that. wrapped fully half, we be

shouldn't see driver kind So question? that of on the what down we in your was terms of But second timing.

Is there like commodity-related this a like like on for in margarine, oils deflation pass-through just division, for example?

Yes.

deflation fats edible price passed pass-through seen oils, We've we spreads which in comments we've and So so our was in And today. our obviously had reductions through. my are oils. that businesses, and prominently that on have

Okay.

-- rest continues change there's a year in for continues that the underlying the that the of for commodity... So unless

QX, After on that. we're wrapping Yes.

You're wrapping on that, too.

Okay.

your Okay. sales. follow-up. between on Meat the IRI Snacks Nielsen and I data And data then There's the a think, a discrepancy,

this -- look pretty in in is says presentation things shipments? different. in your data a overall year-over-year a Nielsen Your you -- the strong. quarter think is Snacks your business up Meat is this do today little Like retail and that

significantly is are, participating the can't that. the broader snacks we're to pleased and very universe we see where But compete as are in and we you But outpacing in universe, two the of to showing business We're in from can sources. very strength you the the data the I between add pleased mix. we data, FATTY kind we've the to Rob, difference with the speak got just overall. we're

For little data, the Slim the quarter, below increase kind volume we're Jim IRI increases for in X% from of seeing Slim volume Jim.

as Dave, little? that down Or that up dollars a about What Okay. though, is does well?

Dollars slightly. down are

from Palmer Our next from question Tom comes Citi.

frequency on from consumer I shelf. percentage And I was sales You ultimately, driven not you to what's the the of Relative levels? to think are there come? a think guess, promotion. some about shelf. kind on noted still Or you lifts of on higher the levels, decisions changes and we'll see maybe to that's portion just items of wondering promo full do on promotions of do by back pre-pandemic

that single-serve on Frozen -- it's Well, quality with try meals, we within we display. our mostly been drive business biggest particularly, our the promotion drive quality to and try business on frozen and to

to So drives we just opposed try in aisle, we shelf modest caps that decline. the because the the has to that our a on in try end shelf price -- just to get highest normal a tag space frozen lift to what into is addition the ultimately as

a it's the those we're really is to after at drive the So maximum quality of display end aisle what frozen lifts.

was there can but And a the years. almost lowest on for a run know be was I one Ardent. bit implied of light the this rate year. fluctuations, quick the It in X

Just of about rebound the any might think anything in was see if that And thoughts to when we kind there maybe in on slight XQ notable business? that drove the downside.

with the it before, can fluctuate volatility No, wheat based and I talked market. Ardent's mentioned on my we've on about results comments, and

and business. core great the bit go of at that's the it the more is margin a positive. the and it's way where business job servicing a customers. flour be this revenue, volatile is strong. and and very They products can and can the Ardent commodity And of volatile business be down a of then milling remaining The part selling other So it do

in So year we're were because holding but than but QX, our little with to be now a right volatility ways. bit the volatility, softer holding to both wanted we we're the forecast There year we for swing the really be can Ardent. going some is

Paribas. from question Gumport BNP comes next from Our Max

the to expectation improve that is market a through really dynamic or year, category to is regard for it With share a volumes the expectation?

in categories which in It's strength is great frozen is key the percentage saw domains the a of to snacks. mix, Max. We've as share, are you our got -- a growing, see. a good numbers, particularly share fair But broad-based, of our

that does mean, Yes. I right. look market And share, Great. on quite impressive. you're it

about highlight key a getting because for And think the are drivers invested there's share talking on a market just feels in if what maybe I of quarter. the cycle? you of increase was price lapping but you're still price taking first volume first? volume you couple for you also that in I'm ahead that help think outperformance wonder the similar on price that perhaps you first. you're ago a years I any competitors think curious basis? It what were and then your to do

good each answer of different the a a question. domains. It's It's in

the space to see frozen we take basically. frozen returned happening growth, as the you if goes space Conagra in frozen has in driven we is category first, category what the go. The by So

So not is deep discounting. what we've done there

the major the We consumer cooking. not on the of the would I fatigue some saw heading So incentives. saw to We convenience. scratch to back price put under desire get of

so we portfolio. In the price a our a we've getting them. help little -- by responsiveness giving so in to but the It's bit what drives different there. dynamic to merchandising the And terms and of That in seen strength them And that started good we there. nudge discount, shallow later a aisle is we end the snacks, I architecture outsized category on seekers. in been a And strength happens. been display snacks we've value can of them because typically along the remind in for you're of -- about think dealing pack product importantly, more with support

permissible particularly and on like choices. big tailwind share is when business So we high-fiber selling is what in pivot it things the talked toward is But that. which of our smaller growth snacking, a high-protein, about to snacking Jims, case comes earlier, Slim sizes, the overall just

be the ending for I'll Melissa remarks. gentlemen, turning question-and-answer back at session. over the time, to And this any closing ladies be we'll floor and

questions. our you Investor call morning, again, for once thank with Relations all and us this out please So reach for any to additional joining

for be ladies you question-and-answer concluding and do we'll joining. that, for today. presentation We And the thank and gentlemen, session with

disconnect lines. now your You may