CAG - Earnings call transcript Q4 2019

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Operator

Good day. And welcome to the Conagra Brands Fourth Quarter Fiscal Year 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded.

to conference like Kearney. to now would turn over the Brian I go Please ahead.

Brian Kearney

Thanks joining morning, for Good everyone. us.

you making during some remind forward-looking I'll that statements today's we call. will be

not that in While we we that will measures. SEC. documents Descriptions are faith, we we References referenced. those growth, factors to adjusted items organic the including impact sales achieve. guarantee measures earnings Please statements release be period financial items, refer risk in for on are we the net discussing comparability making will do to additional Also included have non-GAAP of items. exclude results the the believes filed management information any some for comparability about the our good the with see

to or website, of in be earnings which of directly found found Investor adjusted most in be can of section reconciliations comparable the release either our measures those the press the Conagrabrands.com. can in measures the slides, both earnings GAAP The Relations

be measures Legacy to Conagra recently Foods Finally, we to with as as income expenses refer References Brands associated business. making Brands Conagra will Pinnacle or Conagra the Legacy exclude Brands. well any that acquired total to references

With over Sean. that, to I'll turn it

Sean Connolly

and everyone, Thanks, Brian. our fiscal fourth quarter earnings for Good morning, conference thanks joining XXXX call.

We have discuss. a lot

with start to take away want let’s what So, you I from today.

to First, we remain Conagra the implement continuing to long-term we Way growth. will by confident that value profitable deliver

Conagra serve legacy will Our Way and well unwavering into commitment the to future. both, Pinnacle the Conagra

to is report several milestones remarkable originally continue make but Pinnacle our deal key required than that year track. we anticipated, stabilizing hit Fiscal deleveraging major and We’ve the XXXX to more pleased was transition. initiative integration We progress of a on did business. a I’m attention that

of our Mills them was saw in quarter result These discrete as due transitory joint conditions businesses for issues to accelerated unfavorable as largely on This we results the morning, you disappointing. late Ardent as headwinds. a QX see behavior a well our as non-economic from market in few issues As were competitors our this release venture. and

unpack performance in Now, organic on several I QX our XXXX, the to because XXXX steps, very long-term -- want we of enhance a our I'm but going I important the took and inorganic moment, of do, guidance to fiscal These comment fiscal the before drivers Dave year, in as we to to health increasing market will our in and later. on-trend will XXXX robust XXXX. major That reiterating growth guidance in business. another more a slate us fiscal play help guidance provide is innovation earnings fiscal for offense innovation. also information of factor organic our both bring

I’ll meat-alternatives. wrap our by on plant-based some within sharing opportunities thoughts up

the we that space. very Now growth Gardein, in capitalize exciting to explosive are well positioned own we on this

frame I portfolio. to up progress our So, the our before big the for was of we Way Fiscal foundation details I quarter, year. want principles XXXX the into the by deploying Conagra significantly very playbook advanced transformative good securing We the during and across picture. the us jump made

and that is be you of growth be dictate cut mind top way innovation you The can Growth can’t important prosperity. that lean, agile but to and Our principals has not counts. so equal. your to consumer essential it’s capability to be is all

brands our brought to-date largest an with XXXX our on the emphasis with Fiscal supporting marketing of efficient also launch innovation slate along programs.

see, two years. can the over we’ve sustained had past As a consumption result, growth you

growth in the organic for second We a also net delivered row. sales year

algorithm. new, paying result with and brand approach disciplined off. on long-term particularly portfolios deliver Our innovation which to solid us is provided to snacking a building, rock has our The foundation across our and growth frozen from

and Big our accelerated the positioning synergies brands acquisition added scale, during leading fit Pinnacle’s Conagra. at Pinnacle frozen brands change obvious realizing of Pinnacle the successful the next increased was attractive integrating platform, and progress categories. an of We’ve tremendous Three Foods made growth. completion iconic a the that for to businesses, Our year enhanced in wave our return

We and margins by assets. ‘XX fiscal reshape growth for better continued overall non-core divesting better portfolio during to also our

the it at Let’s a without look SAP the a take a to we financial tremendous the at the hitch. successfully Pinnacle end team the a business. closer systems Starting by slide on Conagra’s legacy integration order-to-cash year. effort We took This and platform. went of ERP off with fiscal integration milestone critical and Pinnacle’s on nine, achieved transitioned

late the In continues fact, smoothly, million we integration and synergy on closed synergies. have the in October, recognized to run $XX across transaction Since board, our of remains schedule. the capture

report sheet balance having through with fiscal a million our end and credit XXXX grade quarter investment close reduced From net debt of from the a of track fourth and to acquisition solid the on $XXX ratio that of perspective, the a remain by plan, million to remain committed I'm the achieving in we fully $XXX in the pleased debt times maintaining fiscal rating. of X.X EBITDA year. to goal our X.X to We adjusted leverage deleveraging

our just came and stabilization in our performance. the I'm very quarter. major the strategic the of this profit months Pinnacle our toward high feel we to happy operating progress begun Wish-Bone Eye, end in Three Duncan business with that Birds portfolio, and net seven expectations We've Hines overall, business playbook to closing after QX. Legacy Pinnacle Turning brands, report implement progressed The at Big sales value-over-volume in and acquisition. about guidance, good all to

innovations. news resulted market our expected, sales products layer in performing in working. right the approach as approach the The the We're As on year. shown the that velocities, decks a increase in our to later low which that declines value-over-volume pruned implementation graphic base demonstrate are on short-term in our market sales we the the is is for SKUs base performing The good new as the to of new the coming well. stronger innovations building this clear to

Conagra business. the Let's Legacy move on to

QX fiscal our meet overall expectations. that XXXX financial future, and trajectory positions did us long-term results not the for our in confident we’re well While for our

Our by hampered unique were for which of several we items, unpack each will QX you today. results

competition by our million. drove basis of The impacts negative guidance shortfall net Conagra organic promotional three-fourth equates in Hunt’s, of miss QX that this share included drove from to of that $XX which missed our Boyardee XXX growth sales items unexpected businesses. and time view intensified about business in our points, market Legacy renting Marie to the quarter. about as sales Callender's transitory This We this Chef this a happens time.

let disrupt these are We to building. going approach to events our disciplined brand near-term not

and were been have We experienced manufacturing issues co-packer also related in unexpected addressed. nature in one-off and quarter. These some the challenges

items in driven performance of venture expected joint Our during Ardent and our EPS lack weak a miss quarter, combined was the primarily due Mills volatility. lower these than by with prices market to wheat

merchandising modernize our and changes take profitability. an Marie optimizing dynamic a Callender's trays the quality changes modern important bowls, ‘XX profiles and for transitioning portions improve Callender's Marie significant higher was to at closer Fiscal These this ingredients, included brand. rightsizing brand flavor Let's undertook look to as SKUs. year and simplified, attributes affected lower how from adding we with performing

result took heavy new replaced. and Callender's months a than recent brand significantly these Marie Unfortunately, health higher via meals a our far better, short-term prioritized and our some is As they underlying have competitors velocities items growth of approach the promotion. of different the in changes,

to one significant drive XX growth. highlights Slide was incremental where or product example, discounted our promoted competitor's

and some be to that prosperity. difficult, market the quarter, are fourth stay Holding We’ll true the way and merchandising our could down valuable Conagra compete. don't had different competition a when our sustainable became profitless we displaced more believe move especially path on that to competitors Marie approach. principled we aggressive through playbook principles of and As renting as is anticipated Callender's. to a making viewed very that can share the our the choices Way be for short-term price heading We fast support of

return will and value not eradicate. may share protect the continue take worked habit volume here short-term we from we to to adopt that to the our not term. so as over to look for approach long hard we old time to to But, We actions build a time will

effects unanticipated grocery to disciplined our in our of approach We experienced pricing also some portfolio.

As see can cost of XX% slide on the steel year-over-year. increased you cans XX,

in can is price stay to gaps and of not wide see partially simply Hunt's that increase saw we X.X%. actually of we a flat label instances all decrease tomato experienced our declines. Boyardee and to we canned justified business, shelf inflation pricing price that volume. quarter, to would other cost, increased took some But, Hunt’s reflected the the the we ignore price the than for competition our translated In consumers actions price. volume lost end did As in and increases said on pricing expected offset higher we that we and too what private By increases. announcing were Chef anticipate quarter, Last you

a role in can in that the significantly merchandising support took elasticity becomes in too and on merchandising quickly year. was the case uncompetitive, Boyardee volume increases impacted Similarly, QX. increases When or Chef windows throughout wide Callender's, leadership brands, decrease the Hunt’s we impacts price gaps QX, these its of exacerbated respective were Marie in Chef Each has category. price on-shelf Boyardee, expectations. and by In a of was and grow our these be beyond that short-term the

we change will not response, In principles. our

of will we’ll pricing believe makes hyper-promotional the be it that remain by tactical defend our where We proven sense. to aggressive competition we have and And historically, But, growth in actions key. is to continue face the profitable behavior unsustainable. agile share

quarter. manufacturing P.F. were during isolated Our the and second us in transitory QX production Peter co-packer factor Chang’s, issues. affected and by Duke’s, that impacted Pan challenges was

food related been we for disruptions place these restored. issues enterprise. issues the across Importantly, of the and been customer addressed properly identified in resources to safety that manage Root have has are service confident and each have and we cause right and the corrected quality

QX joint quarter, markets than Mills volatility the anticipated the during reduced was by in wheat impacted prices the lower Ardent impacted EPS Ardent’s our also profit results. Mills weakness venture. and negatively in eroded wheat Finally, Ardent

of thrown variety not headwinds QX our our meet off not Ultimately were we to But, presented a course. results expectations. navigate. did

quarter. of Legacy challenges, year. frozen all Conagra to the talked we were of meals also a signs and While our strong about performance in results progress the business, that positive business clear have there we snacks With single-serve continued respect continuation had saw from QX our during our

delivered performance our We international foodservice solid also during segments in the quarter. and

remain Dave for on remarks. our on target on we flow during deleveraging with add flow year and goals. Finally, over-delivered more will track cash our strong cash detail the our his free

in in ever single-serve delivered QX, frozen nearly one the delivered QX XXXX, single-serve X% frozen Slide growth fiscal total continued XX% the of weekly which was sales in quarter. best TPDs this quarters we've average in growth the still we of that XX had on We and meals growth in Notably, lapped portfolio. our meals. shows we top

in sales key well as we're our as we with pleased very category in this look the progress. So, in at TPEs, continuing trends our the trends as

not Our in results, approach category on is only frozen positive meals. it's also impact single-serve growth having our overall a driving

want Our on unsustainable we're aware and this in seeing action. growth, We promotional why activity. competition of part they of is believe certainly of the it's some the

and rigorous Our a but not brand driven approach innovation. price, to renovation strategy is and by modernizing our through premiumizing

can far our XX better see on of than that driving performing slide that and growth is competitors. You innovation key our

snacks snacks, retail snacking our the continues popcorn, seeds. grew details sweet snacking two-year to business, contributions Legacy growth our Overall, meat quarter. from expectations. which Slide our XX.X% in the portfolio turn Let's on QX, basis sales in XX and every fourth a Conagra we exceed to key in included treats, delivered dollar which vertical,

in improvement sustained a show unveiled following approach we year's where to see snacks. can new performance, NACS our our last You

meals also the segment continued well foodservice segment strategy equities. base build These our driven fourth execution a have by continuing and higher in the the margin strong strategy expansion. our drive foodservice to our performed international benefited value-over-volume strong quarter. value-over-volume iconic to results of Canada, to in implement considerable revenue We're throughout snacks successful our realize brand brands our Our segment frozen and quality power growth fiscal of in our in The been reinvent efforts in accomplishing and modernize Mexico, particular. ‘XX extremely in quarter internationally

products innovation spend the innovation of brand some bold just XXXX. with flavor slate for shows simplified year. modern to our ingredients want time we’ll again, some Slide XX Yet this previewing attributes, I have in next for delivering robust fiscal labels and be store profiles. we and frozen

products, which well very to will shipping some responded these soon. start of have Retailers

the the products their half first We expect XXXX stride in these in of and reaching see fiscal the hitting to half. marketplace full second

optimized with to meat build snacking snacks That with snacking We in have forms continue success our strongest plans pack new provocative launch fiscal the XXXX new to our includes these and bold price flavors, line-up of innovation upon of to-date. architecture.

We’re also our brands coves innovation. snacks extend growing can neglected into market, and salty through we the launching our of where

trends. brands that innovation, fiscal jells treats the snack portfolio have sweet products this will meet with our With significant XXXX. reaching confidence spaces we that pack co-branded Hispanic maintain growing out demand like reinvigorating see reframing modern and snacking audiences to unlock to are We its Fanta here. you momentum in clearly We're our

We Pinnacle also for the have plans portfolio. big

have You leadership newly some on acquired innovations on contemporize of targets. to capitalize we We opportunity can a believe see our those slide upcoming brands XX. tremendous key growth to

to we One talking area haven't long-term opportunities you we Gardein, think or attention all opportunity sure a portfolio Gardein ahead meat-alternative where real the the brand. capitalizing in on than the now of than space. greater in the is that the We I'm growth on plant-based about lot of you've innovation jewel there's no illustrates time previously far Pinnacle portfolio spent forecast market. brand the see a that seen and enormous recent better

a Gardein a solid at leadership and role plant-based has foodservice presence in meat-alternatives retail. in

XX% meat-alternatives product this of think analysis the we're an example, know, there's of percentage in gets you viewed achieve exciting, of sizing milk cow's how billion, plant-based just opportunity. analysis as opportunity on even the it both here a is That means this that can be Here's reasonably Because total our fresh start as of could market for percentage other Based opportunity meat. contain all of our substitution Based here's meat-alternatives. exciting. more shouldn't now opportunity predict the high-growth almond we range segments. a of We foods about plant-based a share these categories, we fiscal just And where and could internationally. milk really by XXXX. that in in be for the the thinking opportunity meat, opportunity the the shows between on view, U.S. space And $XX

So, the are financials compelling.

showing surprised the years, annual It four and $XXX just on already. the largest numbers think, now by brand than space XX, slide I large over size retail many in meat-alternative of sales is and million past channels. in quadrupled may you of Gardein be more brand is across how with at has second the the the foodservice

and be of capacity expect will are continued on to growth we capacity coming coming we we expanded resources in to to operational be produce in just already Importantly, And them line used These well new support because will the have underway, well-positioned that months. fall more XXXX. we be than anticipate the burgers.

take a at While of instructive plant-based lot step a look meat press burgers going to these are getting really and it's consumption. in what's back days, on

overall the right Slide annual XX number animal per person average demonstrate numbers of proteins. proteins. animal consumption the eaten of type the by meals The bars outlines to of of

I animal Chicken fish. also and would market see, can patties burgers most important, extends pork, home. the and but the As far beef well from this significant consumption in popular hotdogs even you or of beef. are beyond the home protein away both by is U.S., in highlight

cover animal all for proteins day parts. occasions eating Importantly,

relative is guide for size serves are whether answer the clearly trying to as for alternatives, alternatives. if useful consumption really And the plant-based in is animal market view Our protein about chicken interested of wondering think plant-based you're that opportunity how eaters yes. the a

alternative focuses plant-based meat retail just on channel. XX Slide space within the the

like the are largest protein for alternatives available driven you that beef can burgers by time. retail to been here, a see at veggie plant-based long today, the fact As products have alternative

alternative fastest to is built beachhead, the a this far. alternatives However, substantial growing and plant-based have by chicken space

about, over there’s of The particularly provides the products, of with well-positioned the meat-free plant-based good meat-alternatives. that if segment rapid day alternative soon across space there is of offerings in And consumers Gardein under-appreciated a or already that meat a care there’s a several segment. the brand capitalize to chicken portfolio extremely next already years, that believe diversified be This includes the parts. a product. chance all deliciously to We growth is Gardein will on

to we known see of is Gardein this well going reach. opportunities established brand. Gardein’s also and to We’re well but expand grow plenty

in burger platform compete we this process beefless better burger. And up of segment. generation an of burger are in current underdeveloped. is a creating to next improved First is Gardein’s a popular

growth this, retail compete across plan the to accelerated do we in and at hotdog we also foodservice. we As and expect sausage But, important categories.

winner Conagra plant-based in reach We than better consumers categories can alternative of iconic is proven muscle aroma, in the leverage innovation we’re will across across these to What focusing believe capabilities, each else taste, anyone have and the and on appearance believe is delivering multiple what we plant-based categories protein. portfolio. superior culinary best brands, do which our

Day, key retail velocities, with the that to you co-branded profitable Investor and ideally a Brands, attributes plus and about of we this Across equals Gardein me Way modern positioned. trade, our space. perfect growth. foodservice heard believe During that leveraging of is formula channels Conagra Iconic for talk brands, tenet is superior Conagra and

We benefit. packaging, will brands the entire together best the capability, in portfolio excited Overall, Gardein power to have opportunities contributes algorithm. and of innovation us modern we’re meat-alternatives. help our leverage. the the broadest culinary with differentiated This pipeline our reach about long-term plant-based

Looking quality and implementing growth at we’ll continue Conagra ahead, deliver confident Conagra prioritizing by to value-over-volume. remain Way we the that long-term

We action tap to continue leveraging marketplace; execute we’ll Pinnacle to will also introduce to plan innovation the our the to meat-alternative into on-trend the plant-based including Gardein opportunity. continue brand

be We expect dynamic. the market highly will continue to

principle-based we fiscal confident long-term a XXXX our and navigate We will will as a goals. remain to we’re marketplace. meet and QX, need and guidance difficult our dynamic delivering But guidance to notwithstanding committed both on agile stay deliver our we that

turn I’ll to Dave. that, it over With

Dave Marberger

Thank morning, you, Sean, good and everyone.

Pinnacle XXXX it year for up both questions. before fiscal through walk I’ll Conagra and the and open for morning, we This businesses QX Legacy

walk through moment the and the our primarily acquisition the the to sales excluding quarter. by Trenton I’ll and fiscal for outlines Pinnacle for respectively, quarter a fiscal but hitting full start the I’ll of detail Foods. full Compared XX.X% reflecting net were year-ago fourth were performance the X.X% XX.X%, for in net more sales and key points. quarter here year. down the up period, XX year Organic Slide

While the the we discussed, growth X.X% the our or not challenges, QX growth for are year long-term as expected, year, last and organic guidance did algorithm. ‘XX believe above which quarter not do quarter we the transitory, year's as fiscal sales come net rate. issues the impact organic Sean fiscal in Despite delivered we of in is

the quarter year. up are the and Adjusted increases for up operating in by XX.X% driven fourth was Pinnacle's inclusion XX.X% primarily profit. profit full These of the

few points A margins. on

Our adjusted year, up prior margin operating XX range. basis and was fourth quarter and was guidance points the full XX.X% our above versus year XX.X%,

While full leverage lean shift adjusted for A&P points. marketing benefited as SG&A impact gross synergies. margin gross margin the basis operating Pinnacle from above-the-line well have of marketing, we and where XX operating our at of environment to retailer decreased reflects adjusted margin relationship as our line increased ongoing commitment investments the the year, to This from a

For adjusted EBITDA approximately to previous XX.X% EPS months for the year. billion, $X.XX $X.X down of from while rose increased the EBITDA fiscal results. versus the quarter, XX.X% prior was inclusion Pinnacle's of adjusted diluted reflecting year, the full the quarter, XX% year Adjusted approximately seven

items the X.X% diluted shortfall as $X.XX, adjusted expectations. in year, EPS full our the down versus negatively performance For impacted and QX Ardent Mills the was transitory

the that fourth support segment for both saw a a investments even and versus periods should to ago. into after year improvements building. retailer sales Slide full quarter XXXX. the provides fiscal the the be and summary changes in quarter net increases noted fourth taking we XX in net fiscal by year of price for sales account quarter our drivers XX and brand same year of mix, our Slide year, full outlines It

growth snacking snacks impacted Sean the subtracted end-market business sales basis X.X% divestiture discussed. strong businesses, and grocery For net the continued sales points and by Wesson sales of performance declined X.X% and Despite sales were items from QX organic the net quarter, by net respectively, our as net transitory oil the XXX the rate.

prior the year. largely full organic net and sales snacks line For with year, the grocery in fiscal remained

across multiple and Marie Choice, and Callender's brands, The including benefit from Healthy continued to segment refrigerated Banquet, during frozen innovation QX Reddi-wip.

These a offset benefits in than decrease net these lesser Callender's, continued QX. Marie and that merchandising were certain to declines in lower-than-expected However, and more manufacturing a sales support refrigerated resulted challenges by a P.F. on headwinds organic led recall businesses. the in in to Chang’s reported extent,

segment the with sales growth, net the reported and net year full however, good X.X%, of respectively. sales organic X.X% For and

Wesson net impacted results year. Sean the Conagra the full the business the impacted business, As segment the divestitures for in by oil approximately quarter foreign was combined were reported implementation our mentioned, The growth quarter of playbook segment’s improved of Del Monte to sales negatively to by fourth exchange. which also Canadian led The and rate and numbers X.X% by reduce XX.X%. international

these were Notwithstanding quarter, the X.X% for international’s X.X% full-year. factors, sales and the up up for organic net

the the For of were of price and net foodservice for the year. continued billion the with segment’s QX impact year X.X% $X.X pricing. the for and XX.X% inflation results full in the increased Pinnacle Trenton net and year. facility business strategy quarter the were down by reduced reflect and aggregate. value-over-volume sales but sale the $XXX in the rate XX% of our sales full segment’s X.X%, quarter fiscal Wesson Volume X.X% organic respectively, and sales down reported expectations for growth oil The net the execution and line mix quarter, were net the our in sales quarter, full and divestiture justified organic sales Organic million respectively. The X.X%. declined of

the side outlines the approximately we year. related of includes left headwind a our the during the year basis XX challenges QX and the important full experienced page It's see that keep manufacturing X% adjusted of isolated quarter. benefit points mind the recalls in margin to you for XX Slide versus on QX, gross takes prior on puts to the and and

during can profit in the XX.X% was adjusted decreased you Moving quarter, including XX, Conagra adjusted Pinnacle XX.X%. operating slide operating increased margin profit and QX. Conagra’s to that X.X% Total see Legacy operating Legacy adjusted

loss adjusted as primarily by profit operating profit packaging. and oil in as to well down also faced of segment costs, the Wesson packaging the in metal divestiture grocery of the the was due business, challenges and snacks with negatively transportation snacks in The QX and manufacturing the associated grocery we impacted the segment, In was higher quarter.

adjusted productivity QX. impacts The offset profit improvements as by due decreased discussed manufacturing Realized operating part in transportation were and X.X% lower sales, earlier, refrigerated and higher segment’s costs. well we input frozen net the in and merchandising as to

operating The adjusted business Trenton margin in to million Pinnacle, operating QX, our foodservice produced XX.X%, segment’s operating adjusted impacts lower chain profit expectations. X% related including the supply to totaled the and expense while the facility. increased of our in in with corporate realized productivity line adjusted was margin margin of $XX and Pinnacle’s expanded due sale to for quarter XX.X%, mix, price profit, the favorable the operating

to increased slide Legacy totaled by On The basis Total operating year see full a XX up margin XX.X%, XX.X%, year adjusted Conagra profit you Pinnacle XX.X%. adjusted was year operating ‘XX profit and ago our XX.X%. operating profit fiscal guidance above Conagra ‘XX to to operating above points $XXX can of Conagra’s margin that million range segment’s XX, range adjusted Legacy margin XX.X% was adjusted increased of XX.X% for operating fiscal the adjusted adjusted was guidance year operating and XX.X% XX.X%. our X.X% versus and

ago. the outlines a of XX QX EPS Slide decrease drivers adjusted year our versus

acquisition than adjusted the $X.XX and ‘XX, head $X.XX of EPS now divested discussed, from $X.XX, fiscal $X.XX in we ‘XX. income Conagra service expected was fully EPS as postretirement was quarter. this $X.XX manufacturing by challenges Legacy total the see, was decline have from can we was businesses, decline resulting adjusted company and pension from pension from in $X.XX lower approximately Mills into which funding Pinnacle wrapped The the Ardent from decreased fiscal a you plan during As larger reduced

the a pension XXXX. our reduced full increased by of year, for Legacy the just Mills. Pinnacle retirement headwinds year company X.X% in service Adjusted The reduced adjusted $X.XX $X.XX headwinds the decrease EPS from $X.XX and fiscal EPS of despite year outlines I ago. XX Slide Conagra versus mentioned, drivers acquisition EPS for $X.XX of income Ardent for total adjusted

Slide schedule of trailing flow the and progress we X.X demonstrates ratios XX our make in target of to enhancing Overall, X.X with on XX net debt we year. clear position summarizes this financial net times. months a our information and adjusted continue to cash fiscal overall ‘XX remain to EBITDA debt

the reduced close the total of pro by and to forma ‘XX. we as $XXX of QX, adjusted fiscal was times acquisition million. ratio estimated end end, net the in XX-month Pinnacle Between EBITDA debt year fiscal of debt X.XX our for And trailing

free $XXX full million of exceeding For fiscal the year, Conagra generated of cash flow, million. our guidance $XXX

As we ratings. credit state, investment committed grade to we solid consistently are

$X.XX, contributions slide As the remove divested our noted now you business. in guidance our On the Gelit morning. from earnings XX, historical release, ‘XX that our we to can are EPS by reaffirming essentially solely profits fiscal this see we've reduced estimated ‘XX fiscal

earnings changed for range guidance Excluding we Investor Company's provided Gelit, from Day adjustment not the in April what the XXXX. has at our

outlook metrics. outlines across all XX fiscal slide our XXXX And

guidance are Note X% approximately fiscal compared expectation XXrd rate to We be at ‘XX’s updating that week. excludes slide of metrics to X.X%, the of provided week. X% our of our impact Day. Investor the range sales of XXrd growth net include in impact to the All this other the prior on organic the this

expected we to in to operating synergies the XX.X% free the implementing margin net cash the the increase organic a flow ‘XX to way playbook. adjusted while expect sales. we XX.X% synergies expected in in to and generate improve Also, estimated ‘XX, of Pinnacle as range expect continue integration benefiting to improve from Conagra fiscal of fiscal to cost continue We Pinnacle

‘XX. billion We fiscal expect $X free reach approximately for cash flow to

committed remain provided also we Importantly, Day. we at long-term our to the algorithm Investor

on Gardein opportunity of financial fiscal we Sean benefit the sources through new Pinnacle accelerates highlighted from and growth, opportunity look of progress the to synergy As the capitalize ‘XX like full earlier. year we our acquisition,

conclude formal to I’d remarks today, my turn To like to slide XX.

being With during Here, margins. distribution, growth more ‘XX weighted more sales half heavily growth, respect second guidance. see broken the as and into net planning to innovation-related higher underpin can buckets, trial the repeat the our the our fiscal investment assumptions anticipate second results two year sales ‘XX important related be our towards and fiscal first Overall, we I’d ‘XX. that of growth half the organic summarize builds towards throughout year. half organic These weighted fiscal the we with

We in environment near also that categories QX experienced in highly expect the in we continue select to term. promotional the

As Sean will and have before we seen to in we how situations remain respond competition. mentioned, these agile

expect fiscal the saying half we’ve of since Consistent ‘XX. been with to second December, Legacy improve we sales in to continue what Pinnacle trends

improve half, second lap We for in experiencing. half as crops expect also input been to ‘XX, in the ‘XX second elevated just cost the we half expect I as higher margins innovation-related inflation had of fiscal And the transportation during that and business the by be mentioned. investment will to first the Pinnacle, of fiscal the

We also the expect through the year. synergies course we move as to of increase

Finally, margin Pinnacle the continue late gross until we we acquisition dilutive expect year-over-year be to October. our will to anniversary in

the remarks. take and McGough, as pass That Sean, to questions. Darren to for you Thank concludes I my are your operator I’ll Tom now Serrao listening. it ready

Operator

you. Thank

Lazar of [Operator question We Andrew will first now today The ahead. comes Barclays. begin Please go Instructions] session. the from question-and-answer

Andrew Lazar

question. the Good and for morning, everyone, thanks

Sean Connolly

morning. Good

Andrew Lazar

I guess, here. sort two-parter of a

and guess can with Pinnacle term, elasticity. raise experienced challenges that out broadly, inventory at And legacy then, investors that is, merchandising result. deal, question we’re are some of more not in the investors some the fiscal lose continue today guidance you results, XQ that terms seeing reductions, always why of competitive there And top-line guess, the a ‘XX, least some momentum I some in in light that’s top-line range? the And the is concern business, the to of Given case I core challenges fiscal and ‘XX the the Company on or some that expected near recently? the its focus have what could of confidence how as in Thank you. more the among well play noted

Sean Connolly

do to in first, take literally notion work which for had it’s Andrew, but appreciate notion not me reverse that Pinnacle, in this of can that’s QX that just with to The in accurate. to Let of been on us. terms grab efficient has order, issues we I stream nothing easy highly this, an faced a distraction.

they they my is recalls about in factors in As assumed that they picture competitors, few the transitory did the add events expected, is example. non-economic if is not how of these But, saw items, one minutes the each -- were I here they mostly a Ardent macro decision QX, our in like out not thought. so issue really to not But and the you an story. big of QX to think Mills by repeat, I are forecast, I pointed but up ago, fiscal the of kind expect remarks step were we is and isolated were things quarter miss ‘XX that back, about that and mostly do in

more requiring efficiently. year If did that undoubtedly traction a ‘XX wrapped see But those whole, we a we Conagra innovation had you continued transition end-up we was for around expected. We as very look and in did our a meals of advance our arms transformative and fixes at ‘XX acquisition quickly frozen snacks. remarkable We near-term Brands. than made did agenda. And

that terms got on in Now, integration. and of track stabilizing business we've

play both clearly due in But QX and disappointing, it was to is, a broad was position largely issues. we are innovation but pipeline our is transitory fact now, offense, the and full. to

why we feel we have the about fiscal still despite And advancing of So, in playbook. we ‘XX, bump, in that's clearly very drivers top-line terms speed the good place. are our

really the best stride what works like Our very yet we’ve confident marketplace, we second all will and innovation we're we it hits see. that as the in pipeline is the it in had its way half,

high on guidance for as hurt losses raising of year, we Dave, improvement at transitory of experienced and recovering want largely data the you do terms in that well. think about this doesn't as to you ‘XX, that to that? of the can end some scanner end beginning sales volume fiscal the In the our see we’re build

Dave Marberger

Yes.

So, fiscal of from we changed previously. estimate haven't sales our in we were ‘XX net where

business that missed by we back. expect reasons, we come will QX because So, driven transitory

fiscal XX guidance. is we of for the ‘XX base lower, basis the our so we're math So, holding that fiscal adds growth, added but to so ‘XX sales, points estimate the

Andrew Lazar

Thanks very much.

Operator

go next from with Goldman comes ahead. JP Our question Please Morgan. Ken

Ken Goldman

talked in the bit will expected. about a the quarter. being fourth that what you morning. ‘XX, Good the previously be the because saying you headwinds worse half first Hi. that late I'm little than seems And in XH It quarter

modeled? you second But, into will XQ than is or anything you what's ‘XX. guess to the of the initially bleed better than they implication curious year back I initially guidance. annual I anticipated just assume And the have half, in XH I you're your maybe if maintaining the of guidance. the am you're better right, thinking half So, somewhat half be about ‘XX, bottom

Sean Connolly

you’ve shape Ken, the obviously, curve two we’re not got but for to right. guide the of going quarters,

be we stronger we said along, of QX next that to in HX going expect As And transitory is to now issues, that QX. came half obviously, light recovery loss year stronger transitory all than a HX. due or

it moving In We've are the vast I QX, a lingering around. of think QX mean issues into here. that that terms like Things and a things does wouldn't way. got QX about always worse portfolio

Some risk approach opportunity things that, with we manage opportunities to expect. things other anticipate. didn't which offset for will come means in below what dealing a We that initially we we and look

on today talked half exceeded snacks little year bit our obviously other things, a expectations. the in So, of the Gardein, we’ve this back call about got the I

we add that it to kick the that in that? half year, of lot I our your think changed expecting innovation ways we’ve is, that. like some feel to our the about on dynamics has really a got probably and we But, we've other really multiple to that we've haven't some on So, competitive upside We're near-term year. to picture year, things got got got these good navigate. cadence can do big we go to year point, that you back the in marketplace half. the We’ve and getting its back do the start Pinnacle that on to the really in build lost then should we've second last particular, footing and of Dave, get year. really as of half, momentum those were as to first get And talked before, part want into middle the we TPDs to the in the

Dave Marberger

to Yes. comments relative And just pretty the in we increasing our my half significantly one that I prior hits for and I’d thing. investment that years. add mentioned first in innovation are

impacts just but that profit, net not So sales.

second well. flows that as half, So, half first dynamic

Ken Goldman

visibility then frozen from enough so in when talked you. me. for like Do I'm to surprised, about follow-up business that and promote the And from you from isn’t that, your your reliant you you, risks advertising merchandising shifting to as have Thank customers competitors your took one competitor some what of are your become more can that marketing guess, merchandising to with isn't some the on theirs? the merchandising do? wins the broader question of competitors of really this promotions you of redundant I is, going of

Sean Connolly

line it's we is below piece, No. On that talked the money, the have answer that to the the Because that wasn't anything. doing moved as no. latter we degree below before line money

not as multitude that’s So, it money And moving you're when a away, instead spend anything doing away. taking the of not anything, brands. many a across tools of a talked lot times, covers you're we’ve of multitude

hard we this quality very in count Here about got is aggressive some is competitor. high anticipate those on about on particular the we this would things. is time we're have to one It first what displaced it of very Marie, say seen that that not we’re time and we And merchandising I a talking brand, from a where year talking industry.

And left And In as it’s sustainable, when price-based human consumer is after. time, consumer if what buy it to market got and behavior little not move, to left deal. it happen trained deal a product with rather playbook. or line and time. time you're a competition, to a a design over We'd approach, not actually this From not is really our if we've put encounter volume you our But But your sales that's this with it. time of we value, we from will up learned, in know the study we fashion. enterprise new and into that's that consistently quarter, over center profitability quality resources and deviation got the with of in our some it follow stay behavior. to kind personalized based standard any moving innovation, north what there's and and given time focused our very line to in even financial weak then know to all because as on Conagra’s deal history, fact, anybody, we on called does well time, as over you it we're is

Ken Goldman

you. Thank

Operator

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

Bryan Spillane

gross color bit should ‘XX. Dave, for little I how guess from wanted profits to gross everyone. morning, you profit, just Good more on about get thinking we a be

some ‘XX, line supporting inflation of just little some other But if talked terms bit in pricing new above any can sense contemplated think, just investment inflation, XXXX? for the gross that might us fiscal margins if cover of products. there's COGS some give you and for I factors influence the a to about of in

Sean Connolly

that. Yes. Bryan, try me unpeel let to

year on the overall, pieces a But of inflation, saw specific not the margin generally lot and on it question, of gross dynamics. given the of So, guidance we that margin, heavy half because first there's the speaking, now have inflation, we in transportation we ‘XX right gave moving moderated. operating to your is

then we dealing like of we that related go and inflation inflation, be X.X%, to area. mix Although some we're in we going and where to the think into proteins, the the now weather overall with. portfolio ‘XX, we're But of something X.X%, finished areas this there's obviously probably we're fiscal given seeing as in year, increases close that

deliver continue on do taken related pricing and comes, took to that as a roll expect and have We we deal we productivity. then, into year. with to our year realized we've saw, actions And to you that. next this lot as inflation steel, of that we we’ll And pricing to had inflation

justified. pricing brands, plan and will it taking develops certain inflation on it’s see we we XX inflation and As if where hits

So, we manage go. we dynamics have as just to those

think, in rate As and of year-on-year, related second more innovation be healthy the investment the it in half, and to it year, the up. an of there's half the increase a have investment, although be overall relates still we first the going for I investments, definitely won't in will to

to will be the half. kind another benefit that So, of second

And sold. second margin, first investment in you half, as overall, puts out of for more So, there's together, more and over even between it's come all half. whole well. that put cost That's there's benefits kind then, takes and year those synergies gross goods things what’s that G&A but clearly of the

the improve second move we that the and So, increase, will well will as as year as synergies half. ramps up, into the margins

Bryan Spillane

And year? don't that. it, just the capital spending know if I give for thanks for you missed did right, guidance I on All but

Sean Connolly

not not, we gave remarks. it flow. our No, on cash free did We in

flow, still So, cash we're $X cash free overall, free in flow. billion estimating approximately

Bryan Spillane

you. Thank Okay.

Operator

Our Strycula next Steve with from comes Please ahead. go question UBS.

Steve Strycula

to of of question, get they piggyback year. just Hi. Andrew little glide of as the Good kind the sales throughout bit Lazar’s kind move organic a path we better Sean, on to understand the as morning. wanted of

help sales, gate QX, QX, in of of out definitionally the positive we kind in started least be for the organic investors to to we of where just at got understand follow-up. should trajectory And should Given business? then, I've the

Sean Connolly

like typically I Again, Yes. it hack to It's position give we last that guidance We in didn't that of had year. something to do a a want quarterly And were where lot. I like not don't do. to Steve, here. we

first you the obviously in first well, this kind got we've marketplace second as got a investments in new coming that of means we tell story. can behind. I pointed the QX what year, is Dave some items that think will the invest half, that because we've in of half I is out, Obviously, as half

Pinnacle of business, are new decks also We the we for some in as particular the on our innovation. doing the in midst clear value-over-volume

the kind the of of the without those curves. what terms is slopes on to that year, quarter-to-quarter, giving bend we trend expect we from the specificity second as before we first in of So, month-to-month into the move said half half

ahead as at in we've we some especially innovations the as TPDs, are possible, and Pinnacle traction. getting and of times accelerate that I think, can there that they're many to demonstrate a the it customers, of new work plan marketplace grant get because on, And some working innovations when we'd respect cadence. that been into we've we going of leave in these continues, where with has normal part trying a these some to it said new got in

now. kind how and we update But you trajectory on of that's we'll that to flexible the it stay right we see So, changing. see should continue

Steve Strycula

two-thirds with a Dave, synergy to then, And way in about contribution the frame million it right kind ‘XX that fiscal year? for the piece, SG&A, on Okay. should right number to to this $XXX the third maybe of that is still think we cogs, is

Dave Marberger

will by and and Steve. hasn’t split We of the still to, between had about sold our SG&A cost That’s ‘XX synergy, total XX% guided $XXX end realized the goods of we’re million of of fiscal be synergy Yes. right, and changed.

Steve Strycula

Okay.

year, that So, nothing margins year? cogs, should the for to close that flat with quarterly $XX full be give million enough coming gross piece, if should for full we’re the through but us about that

Dave Marberger

a Here to guidance, don’t be but to going clearly again, it’s tailwind I the want us. give specific for gross margin

Steve Strycula

All right. Thank you.

Operator

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

Jason English

cycles sort looking business innovation, seen at I Chef year, really looks you’re the Boyardee, as look innovation that? and innovation Marie progression and with what mine distribution be that Hey. looking distribution, falling for biggest year, of portfolio you highlighting, Are the we’re probably the performance the about this points Hunt’s, had. Good rationalization we another sort growth. mode away through is we the -- morning, distribution you weighing folks. as slate we gone the we you seen this, on is of that rebuild leg of may innovation on of or replacement found But out the base kind the think you’ve with mentioned to what’s came data, we where Can accelerating for the But, in including of which way. of part Thank it in cycle of suppose the you of declines conditioned think like through about and of And we’ve in. performance? this you’ve declines. sliding cleansing me as sort Callender’s, kind your in three driving Sean, brands I at past all the have netting talk innovations total entering

Sean Connolly

bit of everything, a It’s little Jason.

of give you of break diversity me Let to it. the for down kind of you, example try an it

well. gone between the and some will out, the product up new example, got gap in on got dynamic. example So, Hunt’s we new Jim the have Callender’s is a then out, two back. come gave, velocity and drive against and there’ll short-term high I our we’ve case helpful reduce But it. be at show of products scan TPDs if Jim other Marie one the I reasons good part for on pretty and piece Swiss coming actually TPDs means where we’re Miss of down, in; a That’s window they be can of facings times. they as things other that but back that And put examples quarter every the think a to misleading out playbook the I’ll is That’s Slim point was which on, of aggressively. that it’s be as Slim doesn’t a I growth. TPDs restages have we’ve old the are good going it doing where coming quarter you it a study where bit going TPDs point also can products last to usually also more

because the growth. kind look results business TPDs, items total when pick the and got facings sales it as velocity overall particular well up to higher at of the You usually as velocities, to it we drives reduce on intentionally of in

on. got going you that’s what So,

we differently assumptions. when built ‘XX the things just fiscal out think, whole on And some certain overall, I on we planning build clearly I these as back look we this year, expected based for plans than plan. played

the we co-packer and follow-on like We for to for plan a For certain inflation, didn’t non-economic didn’t tinplate this, example, didn’t behaviors issues. recalls our for price some of obviously plan in needed categories. huge we players plan over so

including all some we’ve pretty we’ve well these But got, Pinnacle Pinnacle’s So, fact right it’s some of fiscal we slate navigated considered, things wrapped we arms the and our now, of well. been challenges. a things that pretty think ‘XX innovations dynamic anticipate think around about got environment we as we the didn’t

best consecutive this innovation organic a to which growth, something I with going build yet. our forward our is in gives that slate environment. We that on have And to not here, foundation earlier, all posted year out point pointed solid as think of second can us which we

to positive as move first and strategic things kind from pretty planning sack horizon. I'm half of overall, second we throughout half about So, how our up

Jason English

helpful. more That's And one for me.

mentioned start beginning planning the You the of the assumptions with year. that you

we’ve competitive before you before it that when seen abate this can through it you But, companies the to suggested as pursue progress volume-over-value, intensity You've ends take years year. poorly. expect as

you guidance, what's the it part to in to gives if that risk not what confidence So, it question, And abate? that second does abate? your will fact

Sean Connolly

take Company level, because example, Well, our it but to a an if at doesn't long at as can a abate category years to it to very as you multiple simply afford a for categories. you sustain long it look across can't abate portfolio, total time usually take

it. able tomato to if many portfolio do an other hold be the when from affordable for strategy. as just in you're enterprise, today, of too this the just not draws it long, part to So, doing face that you're the too using expensive inflation, to a it’s is doing example It just resources P&L too to especially

we’ve from It to historically and transitory need do So, has that it can things. be always we seen there be before. help do that to almost if those we to things time-to-time are some it proven transitory,

it. navigate how that's So, we’ll

Jason English

Thank you. Okay.

Sean Connolly

Thanks.

Operator

Growe with go next Our ahead. comes question Please Stifel. from Chris

Chris Growe

morning. Hi. Good

Sean Connolly

Chris. Hey,

Chris Growe

Hi.

responding question to abrupt for a And clear on environment the challenges. it's had quarter. obviously of to how Just the first you, these in in this kind you're not change yet me promotional

you're it respond challenges? on about? half like of the gross the is And as a So, you to in margin to responding. that the these selectively Is think pressure sounds selectively way point year, first that

Sean Connolly

Yes.

not But, respond should a narrow nature, in absence will to the rent things window, market we try of and share study. because approach consider absolutely Principally, and just then like. at it of probably our these think things somebody I we want from to responding. what all we’re should tend for want to to think automatically, case competitive wouldn't say these in a wise transitory hey, That response response sustain a on longer be kind doing we every and we going conveying look is don't to us. unveil we're things each than be even

look will see things these every at each lot thankfully, don't portfolio. and the of across we We -- a

case-by-case in will some now. as does we kind at get come We haven't look And it that's this much it behavior into on quite a basis. of time details seen on up, But I’d and probably it.

Chris Growe

relation to another just then, And in question fiscal Okay. ‘XX.

Any Do some to recur, think occurred ‘XX, a Ardent the want of understand that maybe you I ones comes get factors $X.XX to other about that it expect Obviously to up coming fiscal on you unique in bit year, to is support this of that I So, outlook? out year-over-year. differential improve that get mind fiscal -- year? make factors which for Mills. just EPS sort better, call ‘XX the that rate don't one growth based unique for help of your

Dave Marberger

for is of Chris, guidance, landed for our related but the to we give where given fiscal generally don't ‘XX margins, roughly volatility the line we're business, fiscal planning ‘XX. specific we posture in

will that's that. generally So, plan we how

a ‘XX. year-on-year, lot fiscal as of into there In terms of you go puts are and takes

out of challenges, were had to costs margins some specific gross XX specifically some manufacturing the in called our write-offs. recall of basis I on think, we points and I pure QX QX, impact just that clearly

of in next year. they not So, QX recur will

discrete they So, costs. are

We some that's a ramping that synergies But, also in are synergy to of so drive innovation slate. big up, that be investing have benefit. our obviously we're going back to

to related clear a So, going increase be in investment. innovation our there's

and guidance, we feel we a on inflation, and we fiscal plan, we came -- that, So, ‘XX realize about just there's takes quite that so we year have it planned, all, went we and planned as our scenario up also of with lot good and we but our But through coming it, productivity, balances. we're have it. drove puts

Chris Growe

for you Thank that. Okay.

Operator

comes of Robert Suisse. ahead. next question Credit from Our Moskow go Please

Robert Moskow

plans tactical then, Hi. having of invest plans I confusing a to consumer. And and on you few to Thanks. Are just brand, that thought a where's it be Gardein to take Have frozen from? the one That the what coming had from an here. about a the noticed gets it investment particularly years? next other brand, really in you for Gardein pack? clearly already you've Pinnacle? the category. leverage incremental having to if behind, it brands in co-branding proposition, through really two The And you're Is not, little products, risks question, risky brands for Thanks. you’re that planned tends beyond you good further good this talking

Sean Connolly

Yes.

all, served at build the to we and we always, acquired about talked Day, we First Rob, at spent we of asset. CAGNY we’ve it why attractive since viewed it, as Investor capacity. it Gardein That's an capital growth

changed, quite to was I it I quickly think, it gathering the all as steam for space, this think what's can of has we it's that as ahead done. see acknowledge fever hard consumer pitch, done

is all of pretty good it investment of is got this a So, that the it. But upshot be the so on. bigger is mind, take margin. not on the behind bigger? investment of will that a Potentially that bit than advantage opportunity quite keep we're Does mean tax Gardein market counting in to that gross has EBIT.

over horizon, kind those additional the to those further. a we back the fuel compounding will in So, tailwinds, of will curve growth sell and sales pick plan up get invest we strategic if we generate more, even we as for accelerate that sales

a cycle here outlook. XXXX So, it it's And on prospects helps of our the us that long-term better additional upside to we've just going and Gardein. got kind much our virtuous feel fiscal about overall

that this And space, With sell example, about how velocity game sausage respect alternative, kind approach, hotdog new is a Choice stand but over icon and modern we the of to let so to absolute that will single-serve as brand alone as it's this brand. Gardein. has But find that pure alternative, a try chicken single-serve burger is juggernaut an Choice explain power such into an Conagra we in each Healthy meals. we're velocity. Gardein to every a new of the case, alternative, icon these look kind consumer that name attributes learned meat blood meat that a the not meat is attributes and used modern particular a we brand to years, frozen to one window have example. over will partner is it's brought several product, attributes at To year, a we the a one just Healthy again to in degree space. always alternative, have for over thinking In of branding now space know that established this and bring an in things be the brand a meals, and for In new we the when consumer. here over as of stronger where the is But an we're in next the going looking me be. of is alternatives to

breakfast, space, already out business almost all in credentials parts, million buy chicken credentials bowls consumer types. to the And alternative because in the across credentials protein used credentials buy the in XX there, alternatives. example they dinner Choice, we we lunch, and Healthy a credentials presence have and based have taste, where Gardein, space, meal -- may tremendous $XXX Choice So they day for in texture, a in plant buy Healthy has X XX meat will aroma in and year,

and the in works the space of this with has of So, instead Choice for base alternative plant a up single-service as think thousandth stronger credentials us. even meals, in brand, power tremendous healthy Healthy we icon of the no plant-based which Gardein with credentials, showing

Hines see sweet before. are size what We cobranded like in And the business it we way, there, perfect done where treats we by with similar with doing we've Duncan we our things Oreo. right now,

So, ingredient make evident flat, is within consumer getting, not be of a piece. and this confidence is what inside the the X This purchase at to that good a kind immediately experienced. quickly to they're an really it them it’s break and evening going through seconds point way give to of

is a holistic plant-based this that but of think that kind the actually is that not way to optimum proposition So, meals risky that's build we in ubiquity in space.

Robert Moskow

Okay. Thank you.

Operator

question David comes ahead. Our go Please next with Citi. from Driscoll

David Driscoll

on is ground. something. I you some I going hour. This over go And But you. wanted the taking Thank Great. back to to appreciate clear the given question,

So, your stock is obviously reacting negatively.

as It upgraded just fourth your You’ve for about got Sean, be can worse something? problems dying you progressed. quarter the quarter year. next revenue like the sounded clear within the

your mention responses that of was one better. some your getting maybe did data questions things of you Nielsen a So, in confidence giving -- were one question you to that

confidence in why single-serve label? you has have end be guidance as these recovered pricing canned you confident tomatoes the ‘XX? ended events here? to gap Do that can did fourth were have from that the so maybe you going the point? the at So, on negative that you private the it has bridge raise promotional Is things revenue frozen closer meals, quarter, that worse for knowledge this getting If just of can got to fiscal and

Sean Connolly

it better a function looking if David, that Chef example, year right end it's saw activities change you'll of we ago in than of that the what were and dropped ago, merchandising QX the see, it's not the ago we a off. look you'll versus at when a what's results you happening So, optics were as you of more QX. period. results, quarterly this year reflects a an Right? function the now; of happened in at see didn't fact that recent there at year; end significant And year get just

and get of months didn't tomatoes, it merch, of was the the within two quarter. period just the the toward expecting the the the unfolded, fourth as XX strong that put, In at private at and we end drop-off the we quarter some a pricing year period of fairly merch the end the XX, discussed, our challenges simply which last were we the well of quarter, us and of which canned and label hit are terms these Chef really actions level Marie as manufacturing as

what really about. that's So, it's

QX. we in but that do QX the have we things then improve and portfolio value-over-volume will things and innovation doing QX slate. We folding the as upgrade move be be We'll also still will to in will

particularly quarter, in going how year kind But period there it in business really Pinnacle unfolded and fourth and that’s the XX. a we period So, on back lot up get the running. XX our as this of

David Driscoll

if it’s so goes it’s prices a could that given raise operations, do related I much. in private doesn’t the cost But, mean of a up If difficulty the disappointing you can label separate. had follow-up, pretty the canned bit but when the I

just guys portions we this not acting it, not portion hear the products hit but the the in the but residual portion of you amount all you your that focus label about is on well. negative today respond do the just think opportunities portions I sound Analyst they these doesn’t from at canned how Day what sell get to you it like canned can product portfolio, and Why very great private these all but amazing those exciting new going when leftover of So, portfolio of that that? out? feel this just How I get your then to so would new within the get lay portfolio. that you exciting on would hurts activities of really and oddball mean, suddenly

Sean Connolly

-- grocery we contributors, that’s got heading, a question, We businesses got we this basically call number of with Yes. a expect them. under is fair -- we saying what which it’s David. We’ve put reliable that

fullness in of them the expect time. reliably contribute to We

canned We Hunt’s is frankly Chef. have of contributors businesses businesses It a food years, that one variety have been a is last has bit over can as those good of of reliable very quite of will to to example for from several time. reasons non-economic time a by from this competition. kind behavior discussed happen that quite possible that time all today the time we see quite we’ve That the

often happen to But, it be transitory. and doesn’t does to tend tend it

label to overreaction. active a an we trying years And these But what time. I'm the as of over things notion contributing don’t a bit drag reshaping that kinds divesting last in not as contributor if of perpetual say company to we going that to chronic been is So, as that that no five kind reliable reliably is longer the the our accomplish. a in that’s I we’re all includes evaluate portfolio. things the space are of on find have you’ll don’t think

not I just did as you perpetual paint as always reliably want that So, foods wouldn’t we’re contributing what quarter. canned this We not been when notion that’s just to that. at more looking -- to of we experienced. label a

been flow portfolio frozen. lot is, the like growth a experienced high business and fact, fuels it’s off thrown it’s a of cash, lot In elsewhere in cash historically of we’ve what for a

David Driscoll

Thank color. the appreciate I you.

Operator

go Our today from question David comes Please last ahead. Palmer Evercore ISI. with

David Palmer

the the imagine come Callender’s you fiscal you’re and you are or safety are I than original today can a that ‘XX for are the fiscal versus out planning Boyardee half. If us about first have quick it impression given that things Hunt’s follow-up. with true, investors mean, as need could positive offsets Chef ‘XX likely past least about coming more I a Thanks. your guidance. guidance that’s perhaps and is at thinking you that Marie which eating a more hit the what margin original said negative into to in into what for tell I your optimistic keeping to And plan, together thinking same was versus

Sean Connolly

what QX, recovery on expect I end call it’s QX we not think, ourselves sitting the It’s a the a of guidance because at experienced really the real sales; for here would repeat. we’re that. again, to not issues patting of back don’t I the high we for in ‘XX raise

of a contribute for Pinnacle, as basically segments, most businesses not some which only frozen we’re just counting we innovation that transcends but an the And very year of and snacks strategic CAG our is will the is the on robust all along. in getting So, and Legacy also some part underpinning really, to to same from plan organic. back that that plan place operating lot

counting So, now innovation but tee performance, excited the we're continued up opportunity, that's this we're navigate just bigger last really which point we’ve it to seeing on we move the doing that us through a and help opportunity, as things about we're Gardein is on fiscal a other us seen but years, like well 'XX not on XXXX. our few to And that continue serve we're will slate.

David Palmer

perhaps canned And recovery already just of potential of actions, after the going get Hunt’s then, the confidence pricing talked Boyardee visibility Thanks. the that there or out that's a box? about timing and what's priority and tomatoes to penalty follow-up, a Chef promotion you the

Sean Connolly

I But, quickly on we by keep you're those timing. I'm exact share mentioned going one ways, number we different mean, These are it. market come through we'll power And businesses. rather it, businesses. to merchandising earlier, about of as that price right, I businesses. get not their are brands relative dry unbelievable will right, we of gaps you market navigate How may talking both our our out not number of on that; get categories. good to Well, on give going but got recover a volume it in our when far that. here two these we share can I'm disclose

hold, of it's is and how So, we’re exactly get that a unfold is to today. that just to question to going when detail that going here going not into quite

David Palmer

Thank you.

Operator

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

Brian Kearney

you. Thank

this been your may interest anyone has Brands. web a team Investor as on Conagra any in release. will So, the is have. call Thank that recorded The press for as for archived reminder, Relations discussions and detailed follow-up available you be our in

Operator

attending has The for today's now you conference concluded. Thank presentation.

now You disconnect. may

Conagra Brands (CAG) 27 Jun 192019 Q4 Earnings call transcript