| Metric                        | Q1 2025 | Q3 2024 | Q2 2024 | Q1 2024 | Q3 2023 | Q2 2023 |
|-------------------------------|---------|---------|---------|---------|---------|---------|
| Volume Change (%)             | **-11.1** **[0001558370-24-013126_tmb-20240825x10q.htm:24]** | **-4.8** **[0001437749-24-011081_cag20240125_10q.htm:28]** | **-2.5** **[0001437749-24-000605_cag20231126_10q.htm:28]** | **-5.1** **[0001437749-23-027773_cag20230714_10q.htm:25]** | **-1** **[0001437749-23-009534_cag20230110_10q.htm:33]** | **-3** **[0001437749-23-000496_cag20221011b_10q.htm:33]** |
| Price/Mix Change (%)          | **3.2** **[0001558370-24-013126_tmb-20240825x10q.htm:24]** | **3.8** **[0001437749-24-011081_cag20240125_10q.htm:28]** | **6.8** **[0001437749-24-000605_cag20231126_10q.htm:28]** | **10.3** **[0001437749-23-027773_cag20230714_10q.htm:25]** | **18** **[0001437749-23-009534_cag20230110_10q.htm:33]** | **18** **[0001437749-23-000496_cag20221011b_10q.htm:33]** |

82b75676ab63e7be44d20a2498de562c5f1b611486f95855fc21f690cdadeda8

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

6715d330587eb1e59c965ce5d6026ebaaeb34bdb8e0a00946c4c0d309151f92f

Volume Change (%)

Price/Mix Change (%)

d5752fb0fb742dd3efe741117ac5800e78f6b7bee799e2ff4cf612fb221bd610

| Metric (USD Million) | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| United States - Grocery & Snacks | N/A     | N/A     | N/A     | 1,295.1  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | 1,286.0  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | N/A     | 1,182.7  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| United States - Refrigerated & Frozen | N/A     | N/A     | N/A     | 1,338.5  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | 1,202.4  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | N/A     | 1,086.4  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| United States - Foodservice | N/A     | N/A     | N/A     | 294.9  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | 272.8  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | N/A     | 266.7  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| International | 268.5  **[0001437749-23-009534_cag20230110_10q.htm:26]**  | N/A     | 270.7  **[0001437749-23-027773_cag20230714_10q.htm:19]**  | 279.6  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | 271.7  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | N/A     | 259.1  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| Total Net Sales | N/A     | N/A     | N/A     | 3,208.1  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | N/A     | N/A     | 2,794.9  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |

acd86781158a676374c18525dc74cff611c7af0b31539c1b2a63f351324f6765

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

931cab24c2c4eeb7f0e0b84be2ba395eb9b787c11bdc9e47aaad89f54c87faa1

Conagra Brands, Inc. is a leading branded food company in North America, known for its diverse portfolio that adapts to changing consumer preferences. The company operates through four main segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice, offering a wide range of food products **[0001558370-24-009764_tmb-20240526x10k.htm:2]** **[0001558370-24-009764_tmb-20240526x10k.htm:113]**. Conagra's product lines include iconic brands such as Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, and Angie's BOOMCHICKAPOP, spanning categories like frozen foods, snacks, and shelf-stable meals **[0001558370-24-011213_cag-20240918xdef14a.htm:7]** **[0001558370-24-009764_tmb-20240526x10k.htm:2]** **[0001558370-24-009764_tmb-20240526x10k.htm:3]**. The company focuses on innovation and quality to drive growth and maintain market leadership, actively reshaping its portfolio through innovation, acquisitions, and divestitures **[CAG_3374151_0]** **[CAG_3402548_3]**.

1. **Grocery & Snacks** - Offers branded, shelf-stable food products sold in various retail channels across the United States.
2. **Refrigerated & Frozen** - Provides branded, temperature-controlled food products catering to consumer needs for freshness and convenience.
3. **Foodservice** - Supplies branded and customized food products for restaurants and other establishments, supporting the foodservice industry.
4. **International** - Delivers branded food products to markets outside the United States, expanding the company's global reach.

d06a61695776e7f2b169523c0370422300606331f2c8fc9ad863f352a9e1c153

c31ef360e573bef8e32f48bd15232241f866512cf7ee2593637150739859278e

| Metric (Unit: Million USD) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Grocery & Snacks           | **1,349.9**  **[0001437749-23-000496_cag20221011b_10q.htm:24]**  | **1,243.7**  **[0001437749-23-009534_cag20230110_10q.htm:24]**  | **1,202.9**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **1,202.9**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **1,295.1**  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | **1,286.0**  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | **1,182.7**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  | **1,182.7**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| Refrigerated & Frozen      | **1,421.5**  **[0001437749-23-000496_cag20221011b_10q.htm:24]**  | **1,307.7**  **[0001437749-23-009534_cag20230110_10q.htm:24]**  | **1,151.6**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **1,151.6**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **1,338.5**  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | **1,202.4**  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | **1,086.4**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  | **1,086.4**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |
| International              | **258.7**  **[0001437749-23-000496_cag20221011b_10q.htm:24]**    | **259.7**  **[0001437749-23-009534_cag20230110_10q.htm:24]**    | **260.2**  **[0001437749-23-027773_cag20230714_10q.htm:18]**    | **260.2**  **[0001437749-23-027773_cag20230714_10q.htm:18]**    | **279.6**  **[0001437749-24-000605_cag20231126_10q.htm:21]**    | **271.7**  **[0001437749-24-011081_cag20240125_10q.htm:22]**    | **259.1**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**    | **259.1**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**    |
| Foodservice                | **282.8**  **[0001437749-23-000496_cag20221011b_10q.htm:24]**    | **275.4**  **[0001437749-23-009534_cag20230110_10q.htm:24]**    | **289.3**  **[0001437749-23-027773_cag20230714_10q.htm:18]**    | **289.3**  **[0001437749-23-027773_cag20230714_10q.htm:18]**    | **294.9**  **[0001437749-24-000605_cag20231126_10q.htm:21]**    | **272.8**  **[0001437749-24-011081_cag20240125_10q.htm:22]**    | **266.7**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**    | **266.7**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**    |
| Total Net Sales            | **3,312.9**  **[0001437749-23-000496_cag20221011b_10q.htm:24]**  | **3,086.5**  **[0001437749-23-009534_cag20230110_10q.htm:24]**  | **2,904.0**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **2,904.0**  **[0001437749-23-027773_cag20230714_10q.htm:18]**  | **3,208.1**  **[0001437749-24-000605_cag20231126_10q.htm:21]**  | **3,032.9**  **[0001437749-24-011081_cag20240125_10q.htm:22]**  | **2,794.9**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  | **2,794.9**  **[0001558370-24-013126_tmb-20240825x10q.htm:18]**  |

101481da3f76fae60b55d2c7ea90d98c5c973972faae5ec195b8b07a48a79401

653db5f2722a44c5cefc50263a8471f5f54f015b1e6ed7b3c65991dd9724e798

1. Given the increased promotional activity aimed at value-seeking consumers leading to a negative mix effect on dollar sales, how do you plan to maintain or improve gross margins in the face of rationalized promotions and deep lifts in frozen categories?
2. With your focus on portfolio reshaping and potential divestitures of slower-growth assets, can you specify which segments are under consideration and how you will ensure these moves align with long-term shareholder value despite possible short-term earnings dilution?
3. Considering the double-digit inflation in key inputs like beef and sweeteners exceeding your initial estimates, what specific cost management or pricing strategies are you employing to mitigate these pressures without compromising volume growth?
4. In the increasingly competitive meat snacks category, particularly meat sticks, how will you leverage brands like Slim Jim and the recent FATTY acquisition to defend and grow your market share against both established and emerging competitors?
5. Given the shifting consumer behaviors affecting convenience store traffic and the importance of this channel for your snacking portfolio, what targeted actions are you taking to offset softness in this channel and capitalize on growth opportunities in mass merchant and club stores?

2f4a33199c883d502e1a4903219668c0f946829feb714d123c3241f2a1f4b6a5

Foreign Net Sales

Total Revenue

9eeda4098e7019f7238c0b091447a97c3d75fd9dc9f71285ad1d92f09db1b9f8

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Net Leverage Target**: Approximately **3.2x** by the end of FY 2025.
  2. **Inflation**: Forecasted at **3.2%** of total cost of goods sold.
  3. **Adjusted Gross Margin**: Expected to be relatively flat compared to FY 2024.
  4. **Volume Recovery and Operating Margin**: Anticipated sequential volume recovery each quarter with greater improvement in the second half.
  5. **Merchandising Investment**: Highest level expected in Q2.
  6. **Net Sales Impact**: Decrease of approximately **$30 million** due to M&A transactions  **[CAG_3402548_6]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Organic Net Sales Growth**: Flat to down **1.5%**.
  2. **Adjusted Operating Margin**: Between **15.6% and 15.8%**.
  3. **Adjusted EPS**: Between **$2.60 and $2.65**.
  4. **Net Inflation**: Approximately **3%**.
  5. **Capital Expenditures**: **$500 million**.
  6. **Gross Productivity Savings**: Approximately **$350 million**.
  7. **Free Cash Flow Conversion**: Approximately **90%**.
  8. **Net Leverage Ratio**: Reduced to approximately **3.2x**.
  9. **Dividend**: Annualized rate of **$1.40 per share**  **[CAG_3393037_5]** **[CAG_3393037_6]** **[CAG_3393037_3]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Adjusted Operating Margin**: Approximately **15.8%**.
  2. **Organic Net Sales**: Expected towards the lower end of the range.
  3. **Adjusted EPS**: Expected towards the midpoint of the range.
  4. **CapEx**: **$425 million**.
  5. **Interest Expense**: **$435 million**.
  6. **Net Leverage Ratio**: **3.44x**  **[CAG_3379574_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Organic Net Sales**: Decrease between **1% and 2%**.
  2. **Adjusted Operating Margin**: Approximately **15.6%**.
  3. **Adjusted EPS**: Between **$2.60 and $2.65**.
  4. **Net Inflation Rate**: Approximately **3%**.
  5. **CapEx Spend**: Approximately **$450 million**.
  6. **Gross Productivity Savings**: Approximately **$300 million**.
  7. **Interest Expense**: Approximately **$440 million**.
  8. **Contribution from Ardent Mills**: Approximately **$170 million**.
  9. **Full Year Tax Rate**: Approximately **24%**  **[CAG_3369763_5]** **[CAG_3369763_3]** .

0a7e1465704a6ef836fa9f623f020176368f189bacab9612d996b48dbe7510e3

| Name                | Position                                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|---------------------|---------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Sean M. Connolly    | President and Chief Executive Officer                         | April 6, 2015      | Sean M. Connolly has served as the President and CEO of Conagra Brands since April 6, 2015. He was previously the President and CEO of The Hillshire Brands Company and held executive roles at Sara Lee and Campbell Soup Company  **[0001558370-24-009764_tmb-20240526x10k.htm:10]** **[0001437749-23-019879_cag20230206_10k.htm:7]** **[0001558370-24-011213_cag-20240918xdef14a.htm:22]** .   |
| David S. Marberger  | Executive Vice President and Chief Financial Officer          | August 2016        | David S. Marberger has been the Executive Vice President and CFO of Conagra Brands since August 2016. He was previously CFO of Prestige Brands Holdings and held senior roles at Godiva Chocolatier and Campbell Soup Company  **[0001558370-24-009764_tmb-20240526x10k.htm:10]** **[0001437749-23-019879_cag20230206_10k.htm:7]** .            |
| Carey L. Bartell    | Executive Vice President, General Counsel, and Corporate Secretary | June 2022          | Carey L. Bartell has been the EVP, General Counsel, and Corporate Secretary at Conagra since June 2022. She joined Conagra in 2016 and previously worked at Hospira, Inc. in senior legal roles  **[0001558370-24-009764_tmb-20240526x10k.htm:10]** **[0001437749-23-019879_cag20230206_10k.htm:7]** .                                          |
| Charisse Brock      | Executive Vice President and Chief Human Resources Officer    | November 2015      | Charisse Brock has served as EVP and CHRO at Conagra Brands since November 2015. She joined Conagra in 2004 and previously worked at The Quaker Oats Company  **[0001558370-24-009764_tmb-20240526x10k.htm:11]** **[0001558370-24-009764_tmb-20240526x10k.htm:10]** .                                                                            |
| Alexandre O. Eboli  | Executive Vice President and Chief Supply Chain Officer       | August 2021        | Alexandre "Ale" O. Eboli has been EVP and Chief Supply Chain Officer for Conagra since August 2021. He joined with 25 years of experience in global supply chain leadership, previously at The Unilever Group  **[0001558370-24-009764_tmb-20240526x10k.htm:11]** **[0001437749-23-019879_cag20230206_10k.htm:8]** .                           |
| Thomas M. McGough   | Executive Vice President and Chief Operating Officer          | May 2024 (expected) | Thomas M. McGough has served as EVP and COO at Conagra since May 2024. He was previously EVP and Co-COO and has held various leadership roles at Conagra since 2007  **[0001558370-24-009764_tmb-20240526x10k.htm:11]** **[0001437749-23-019879_cag20230206_10k.htm:8]** .                                                                      |
| Noelle O'Mara       | Executive Vice President and President, New Platforms and Acquisitions | May 2024 (expected) | Noelle O'Mara has been EVP and President, New Platforms and Acquisitions at Conagra since May 2024. She was previously Group President and CMO at Tyson Foods and held leadership roles at Kraft Foods Group  **[0001558370-24-009764_tmb-20240526x10k.htm:11]** .                               |
| William E. Johnson  | Senior Vice President and Corporate Controller                | June 2023          | William E. Johnson has been SVP and Corporate Controller at Conagra since June 2023. He joined as Assistant Controller in 2019 and previously worked at Kiewit Corporation and KPMG  **[0001558370-24-009764_tmb-20240526x10k.htm:11]** .                                                        |

e0e2ff0b4d5adc2aea78a30337fbda2979d7f6609bf642e544b41914517df502

| Program Details            | Program 1       |
|----------------------------|-----------------|
| Approval Date              | N/A             |
| End Date/Duration          | N/A             |
| Total additional amount    | N/A             |
| Remaining authorization amount | **$852.6 million**  **[0001558370-24-016392_tmb-20241124x10q.htm:36]**  |
| Details                    | The program is part of a share repurchase authorization aimed at managing the company's capital structure and returning value to shareholders. The repurchase authorization does not obligate the company to repurchase any shares at any specific time, and the amount and timing of repurchases depend on various factors, including stock price, liquidity, and market conditions.  **[0001558370-24-013126_tmb-20240825x10q.htm:36]** **[0001558370-24-009764_tmb-20240526x10k.htm:38]** **[0001558370-24-016392_tmb-20241124x10q.htm:36]**  |

17ff3fede2a0bdc07a448fb0daf721b7fa2d51737f984d4b9ce8d606e72944be

- Conagra Brands lowered its adjusted operating margin guidance to approximately **14.8%**, down from previous expectations, due to higher-than-anticipated inflation, especially in animal protein and egg costs that are not moderating as projected. \[2\]
- The company reduced its adjusted EPS guidance to a range of **$2.45 to $2.50**, citing the impact of higher inflation on operating margins and an estimated **$0.04** EPS headwind from unfavorable foreign exchange rates. \[2\]
- Conagra's net leverage ratio is now expected to be approximately **3.4x**, up from the prior estimate of approximately **3.2x**, indicating increased financial leverage due to lower adjusted earnings expectations. \[2\]

034c1d44e7397d0f341e2f6c861c1a961200fef900fc9e80e708ba5427269174

895378a92730f1d7bb580ad9f49363c21bfc096fa6b9d1d8de9e337b79623727

**Annual guidance for FY 2025:**
- **Organic Net Sales Growth**: near the midpoint of -1.5% to flat  **[CAG_3412074_3]** **[CAG_3412074_5]**  (no prior guidance)  
- **Adjusted Operating Margin**: 14.8%  **[CAG_3412074_6]** **[CAG_3412074_3]**  (no prior guidance)  
- **Adjusted EPS**: $2.45 to $2.50  **[CAG_3412074_6]** **[CAG_3412074_3]**  (no prior guidance)  
- **Free Cash Flow Conversion**: greater than 100%  **[CAG_3412074_6]** **[CAG_3412074_5]**  (no prior guidance)  
- **Net Leverage Ratio**: 3.4x  **[CAG_3412074_6]** **[CAG_3412074_5]**  (raised from 3.2x)  
- **Adjusted Tax Rate**: 23%  **[CAG_3412074_6]**  (no prior guidance)  
- **Capital Expenditures**: no specific figure  **[CAG_3412074_6]**  (no prior guidance)  
- **Contribution from Joint Venture (Ardent Mills)**: no specific figure  **[CAG_3412074_6]**  (no prior guidance)  
- **Interest Expense and Pension Income**: no specific figure  **[CAG_3412074_6]**  (no prior guidance)  
- **Inflation**: now closer to 4%  **[CAG_3412074_6]**  (raised from 3.2%)  
- **Gross Margin**: expected to contract by ~90 bps  **[CAG_3412074_6]**  (no prior guidance)  
- **Second Half Volumes and Organic Net Sales**: expected to improve versus the first half  **[CAG_3412074_5]**  (no prior guidance)  
- **Long-Term Leverage Target**: net leverage ratio of 3x by the end of FY 2026  **[CAG_3412074_5]**  (no prior guidance)  

e6385b4a06793c28793f0c5786cfaddc91fcf4d4d4c3926027a079c4a95f09ec

d8994ab83b5f07f3ccfa1154dc50671089f476d62dead50bf409bf365dc7f5c9

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 2005  **[0001558370-24-009764_tmb-20240526x10k.htm:120]**    | Present  | Current auditor   |

248d07bacfd9af1de42c7f2b50989c40611bc345df43f6fd375b2f41655beebf

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $3,195.1 million (-0.4% YoY)  **[0001558370-24-016392_tmb-20241124x10q.htm:29]** **[0001437749-24-000605_cag20231126_10q.htm:21]**   
- International Segment: $243.4 million (**-13%** YoY)  **[0001558370-24-016392_tmb-20241124x10q.htm:29]** **[0001437749-24-000605_cag20231126_10q.htm:21]**   
- Refrigerated Sub-Segment: $198.3 million (**-15%** YoY)  **[0001558370-24-016392_tmb-20241124x10q.htm:22]** **[0001437749-24-000605_cag20231126_10q.htm:21]**   

a4c928d0c97d899862ce4bc2435a45a1d9a8b75210b209f25240ee6d770e7cba

65ba7173c545b8a975923ec0714dd6e78cc94ceb6af316ee7980dfa8a6ed1af5

Volume in Grocery & Snacks segment (percentage)

Price/mix in Grocery & Snacks segment (percentage)

Net sales contributed by acquisitions in Grocery & Snacks segment (USD millions)

Volume in Refrigerated & Frozen segment (percentage)

Price/mix in Refrigerated & Frozen segment (percentage)

Net sales impacted by Hebrew National disruptions in Refrigerated & Frozen segment (USD millions)

Foreign exchange impact on net sales in International segment (percentage)

Volume in International segment (percentage)

Price/mix in International segment (percentage)

Volume in Foodservice segment (percentage)

Price/mix in Foodservice segment (percentage)

Net sales impacted by Hebrew National disruptions in Foodservice segment (USD millions)

6f8d3daa1bf7bd2f3766b889abc72429da5ac5619939dfafbe3672fe1c89a090

- **Conagra expects negative price/mix in its Refrigerated & Frozen segment for the full year**, with continued reductions impacting revenue growth.  **[CAG_3402546_13]** **[CAG_3402546_5]**
- **The company experienced an issue with its Hebrew National brand during the peak grilling season**, described as "unfortunate timing," which may have affected performance.  **[CAG_3402546_3]**
- **Deflation in edible fats and oils has led to pass-through price reductions in spreads**, potentially exerting pressure on profit margins.  **[CAG_3402546_13]**

e2ffe6b35695b1836fc1ed5de1233c454e729c23377408facf919e7eab6ffffe

1. **Portfolio Reshaping Plans**  
   **Q:** Are you focusing more on portfolio reshaping now?  
   **A:** Yes, with strong cash flow and balance sheet progress, we're focusing more on portfolio reshaping to drive better growth and margins. This includes investing in existing businesses, acquiring faster-growing ones like Snacks and Frozen (e.g., the **FATTY** acquisition), and divesting slower-growth assets if we can achieve at or above intrinsic value.  **[CAG_3402546_3]** 

2. **Input Cost Inflation**  
   **Q:** How are input costs affecting your business?  
   **A:** We've increased our inflation estimate from **3% to 3.2%**, mainly due to double-digit inflation in beef and sweeteners caused by supply issues like herd size and droughts. We're also seeing moderate inflation in chicken and milk and are managing these costs closely.  **[CAG_3402546_10]** 

3. **Volume and Price/Mix Outlook**  
   **Q:** What is the outlook for volume and price/mix?  
   **A:** We expect volume improvement each quarter, turning positive for the year, while full-year price/mix will be negative but moderating. Higher merchandising in Q2 is planned due to seasonal dynamics, and we anticipate absorption to improve, aiding gross margins.  **[CAG_3402546_5]** **[CAG_3402546_4]** 

4. **Impact of Hebrew National Disruption**  
   **Q:** Will the Hebrew National disruption affect future sales?  
   **A:** The disruption during the grilling season led to **$27 million** in lost sales and **$11 million** in additional costs and lost profit in Q1. Since hot dog sales spike between Memorial Day and Labor Day, we won't recoup these sales until next season.  **[CAG_3402546_3]** **[CAG_3402546_4]** **[CAG_3402546_11]** 

5. **Consumer Shift to Convenience**  
   **Q:** What consumer trends are you seeing in frozen foods?  
   **A:** Consumers are pivoting back to convenience, moving away from scratch cooking. Items that can be prepared in less than **5 minutes** are gaining popularity, benefiting our frozen business, which offers convenience and affordability.  **[CAG_3402546_2]** 

6. **Promotional Strategies**  
   **Q:** How are you approaching promotions in this environment?  
   **A:** Promotions have returned to pre-pandemic levels but remain rational. We're targeting promotions in frozen, focusing on quality merchandising frequency rather than depth. This strategy offers value to consumers and has led to high sales lifts without eroding gross margins.  **[CAG_3402546_8]** 

7. **Meat Snacks Growth and FATTY Acquisition**  
   **Q:** How does the FATTY acquisition fit into your meat snacks business?  
   **A:** Meat snacks, especially meat sticks, are poised for significant growth as consumers shift toward protein snacks. FATTY complements Slim Jim by targeting an older demographic with a premium product, strengthening our leadership in this fastest-growing snack subspace.  **[CAG_3402546_7]** **[CAG_3402546_1]** 

8. **Trade Down Dynamics from Foodservice**  
   **Q:** What are you seeing between out-of-home and in-home consumption?  
   **A:** Consumers are trading down, moving from restaurants to grocery stores and seeking value within stores. We've protected our Foodservice margins by exiting unprofitable business, focusing on convenience and value as primary consumer needs.  **[CAG_3402546_9]** 

9. **Ardent Mills Performance**  
   **Q:** Why was Ardent Mills' performance soft, and what's the outlook?  
   **A:** Ardent's results fluctuate due to wheat market volatility. Despite softness in Q1, we're holding our full-year forecast since the core milling business is strong, and commodity revenues can swing both ways.  **[CAG_3402546_16]** 

10. **Convenience Store Traffic**  
    **Q:** How are convenience store dynamics affecting your business?  
    **A:** Convenience store traffic has seen temporary softness due to channel shifting and inflation. However, we offset this with strength in mass merchandisers and remain agile to meet shoppers where they are, ensuring continued growth in our snacking business.  **[CAG_3402546_12]** 

11. **Advertising and Promotion Spending**  
    **Q:** Is lower advertising spend affecting category growth?  
    **A:** We've reduced A&P spend from around **4%** to **2.5%** by eliminating non-working dollars and focusing on digital and social media. Instead, we invest heavily in product innovation, which appears in COGS, driving category health without negatively impacting growth.  **[CAG_3402546_5]** 

45aadd2dfe7953c1f2057de794d5d591329fcd60aa08bb3daa0bcbd78d733ae4

| Year | Amount Due (Millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|-----------------------|-----------|-------------------|-----------------|
| 2024 | 1,000.0 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 4.30% Senior Notes | 4.30 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 11.8% = (1,000 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** **[0001558370-24-016392_tmb-20241124x10q.htm:9]** |
| 2024 | 500.0 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 0.50% Senior Notes | 0.50 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 5.9% = (500 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** **[0001558370-24-016392_tmb-20241124x10q.htm:9]** |
| 2025 | 300.0 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 2024 Term Loan | N/A | 3.5% = (300 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** **[0001558370-24-016392_tmb-20241124x10q.htm:9]** |
| 2025 | 849.0 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** **[0001558370-24-016392_tmb-20241124x10q.htm:35]** | Commercial Paper | N/A | 10.0% = (849 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** **[0001558370-24-016392_tmb-20241124x10q.htm:9]** **[0001558370-24-016392_tmb-20241124x10q.htm:35]** |
| 2025 | 1,031.1 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** | Current Installments of Long-Term Debt | N/A | 12.2% = (1,031.1 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** |
| 2026 | 500.0 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 5.30% Senior Notes | 5.30 **[0001558370-24-016392_tmb-20241124x10q.htm:9]** | 5.9% = (500 / 8,463.6) * 100 **[0001558370-24-016392_tmb-20241124x10q.htm:4]** **[0001558370-24-016392_tmb-20241124x10q.htm:9]** |

c66f0fedb050ad39232bab08a2362fcb4d032172f7ae0f3d0e2522a6a14c7d95

- **Return to volume and organic net sales growth in Q2 FY2025**, with **organic net sales of $3.2 billion**, up **0.3%** over the prior year, driven by volume growth in the domestic retail business.  **[CAG_3412074_4]**
- **Strong performance in key business domains**, including the Frozen segment, which has seen **five consecutive quarters of volume sales improvement**, and an **increased volume share position by 3 percentage points** in the single-serve meals category.  **[CAG_3412074_2]**
- **Continued commitment to brand-building investments** to drive top-line momentum, despite facing higher inflation and unfavorable foreign exchange rates, highlighting management's focus on long-term growth and shareholder value.  **[CAG_3412074_1]**

454fbe7d027277438d7ee9c24faff23b8501c6e350afe5755bbb4ca3b1e76bf2

- **Conagra has made significant progress in its frozen and snack domains**, using targeted shallow promotions to drive **volume outperformance and market share gains** without deep discounting.  **[CAG_3402546_3]** **[CAG_3402546_17]**
- The company is strategically **reshaping its portfolio** by investing in existing businesses, acquiring faster-growing assets like **FATTY Smoked Meat Sticks**, and divesting slower-growth assets, enhancing **long-term growth and value creation**.  **[CAG_3402546_3]** **[CAG_3402546_7]**
- Conagra's focus on **permissible snacking**, particularly high-protein and high-fiber products, positions them well in the **fastest-growing snacking subspaces**, reinforcing their market leadership and driving **strong consumer demand**.  **[CAG_3402546_1]** **[CAG_3402546_7]**

5e7bb7c0ce3d38fa583e600460992b5039a658b55e5a6639bca892a8f8aa9dc0

1. **Inflation Impact on Earnings**  
   **Q:** Is it harder to raise prices to offset higher costs now?  
   **A:** Sean Connolly explained that the **EPS guidance reduction** is due to increased inflation in the back half plus FX, not due to increased investments.  **[CAG_3411952_7]**  While there is inflation in **cocoa and sweeteners**, impacting a narrow part of the portfolio, the bigger driver is **protein costs** like meats and eggs.  **[CAG_3411952_7]**  They anticipated lower inflation in the second half but now face higher costs.  **[CAG_3411952_7]**  Instead of raising prices again and triggering elasticity effects, they chose to maintain **top-line momentum**, believing it's in the best interest of consumers and shareholders.  **[CAG_3411952_7]** 

2. **Leverage and Free Cash Flow**  
   **Q:** What is driving the increase in leverage targets, and how about free cash flow?  
   **A:** CFO David Marberger stated that the **forecasted leverage ratio** is now **3.4x**, up from **3.2x**, entirely due to reduced profit outlook.  **[CAG_3411952_4]**  Free cash flow conversion is above **100%** because net income is down, but free cash flow is on track.  **[CAG_3411952_4]**  They are pleased with their progress in working capital and inventory management and expect to reach their long-term leverage target of **3x by fiscal '26**.  **[CAG_3411952_4]** 

3. **Operating Margin Outlook**  
   **Q:** What's driving the expected margin inflection from Q3 to Q4?  
   **A:** David Marberger explained that **Q3 operating margin** will be the lowest of the year due to factors like increased **innovation investment** and higher inflation forecasted at close to **4% for the full year**, higher in Q3 than Q4.  **[CAG_3411952_5]**  Volumes are expected to improve sequentially, and A&P and SG&A will be in line with a year ago.  **[CAG_3411952_5]** 

4. **Competitive Landscape in Frozen**  
   **Q:** Have you seen increased competition in frozen, and how does it affect your growth?  
   **A:** Sean Connolly stated that while competitors are adding capacity in frozen, Conagra has been leading the **frozen category** for about **10 years**.  **[CAG_3411952_11]**  Their products and innovation are ahead of competition, evidenced by their **strong market share**.  **[CAG_3411952_11]**  They plan to continue driving and leading the category and remain the leader globally and in the U.S..  **[CAG_3411952_11]** 

5. **Investments and EPS Impact**  
   **Q:** Are incremental investments contributing to back-half EPS pressure?  
   **A:** Sean Connolly clarified that their decision to invest in driving top-line growth is **not new** and has been built into their plan for the fiscal year.  **[CAG_3411952_2]**  The investments are **working**, with trend lines improving over the past **5 quarters**, particularly in frozen and snack businesses.  **[CAG_3411952_2]**  In Q2, actual spend was lower than planned; they redeployed those funds to Q3 rather than reducing support.  **[CAG_3411952_2]** 

6. **Protein Snack Trends**  
   **Q:** What's driving the trend toward high-protein snacks, and how long will it last?  
   **A:** Sean Connolly noted that protein and fiber are **super on-trend** right now, and they are highly concentrated in those benefit areas.  **[CAG_3411952_9]**  They acquired the **FATTY Smoked Meat** business, adding to their portfolio alongside **Slim Jim** and **Duke's**, creating a **trifecta smokehouse**.  **[CAG_3411952_9]**  He doesn't see these trends changing and believes being **protein-centric and fiber-centric** is advantageous.  **[CAG_3411952_9]** 

7. **Healthy Choice GLP-1 Messaging**  
   **Q:** What are your plans for the Healthy Choice GLP-1 On Track program?  
   **A:** Sean Connolly discussed adding a **"On Track" wayfinder** with **"GLP-1 friendly"** language on Healthy Choice packaging for consumers managing their diet, including those using GLP-1 drugs.  **[CAG_3411952_8]**  Although the number of users is small and some are dropping off, Healthy Choice provides an excellent solution for those seeking to maintain progress after GLP-1 use.  **[CAG_3411952_8]** 

8. **Advertising and Promotion Timing**  
   **Q:** How is A&P spend shifting between Q2 and Q3?  
   **A:** David Marberger explained they spend the most on trade merchandising in **Q2**, but some spend shifted to **Q3**.  **[CAG_3411952_10]**  They are ramping up **A&P** starting in Q3, aiming for A&P percentage to be in line with the prior year by year-end.  **[CAG_3411952_10]**  There's a slight increase in **innovation investment** expected in Q3.  **[CAG_3411952_10]** 

9. **Consumer Value Behaviors**  
   **Q:** What best practices address consumer challenges and value-seeking behaviors?  
   **A:** Sean Connolly emphasized that benefits like **convenience** are unshakable trends.  **[CAG_3411952_3]**  They've nudged consumers back using investments in **innovation, advertising, and high-quality trade**, focusing on frozen and snacks where their brands are resonating.  **[CAG_3411952_3]**  This strategy has been effective in driving growth.  **[CAG_3411952_3]** 

10. **Impact of Thanksgiving and Hurricanes**  
    **Q:** Was there any benefit from Thanksgiving timing or hurricane impacts?  
    **A:** Sean Connolly stated there was **no Thanksgiving timing effect** on their company, as shipments and consumption tracked closely.  **[CAG_3411952_1]**  He also mentioned a **very small benefit from the hurricane** in the Grocery & Snacks segment, but not material to overall results.  **[CAG_3411952_6]** 

5f56f54fb6893966fec4bd14951188b2729b5f6e6bfc68fea1a45671b6ae8679

Conagra Brands Inc (CAG)

Financials