Conagra Brands Inc at Goldman Sachs Global Staples Forum Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Leah Jordan - Goldman Sachs - Analyst : So with that, I'll get into our chat. I think to start us off, Sean, you have been CEO of Conagra for about 10 years. There's been quite an evolution of the portfolio over that time. How do you view Conagra's portfolio today? What were the key steps along the way that makes you feel like it's positioned well for the longer term today? And where do you see opportunities for further refinement from here?

Question: Leah Jordan - Goldman Sachs - Analyst : Okay. Great. Yeah, I think that sets us up well today. But before we dig in a little bit more to your brands, would love to just take a step back and talk about the consumer, just given the broad range of your portfolio. Obviously, you said it's a dynamic macro environment. But what trends are you seeing across brands that skew lower income versus upper income? And have you noticed any meaningful shifts across channels or eating more at home?

Question: Leah Jordan - Goldman Sachs - Analyst : That's very helpful. And I think as the consumer is being conservative, I think a lot of our conversations sit around promotional activity. And you guys have been doing less than pre-COVID levels. I guess, to what risk is there to normalize from there? Why are they more efficient today? Or just how are you thinking about your promotional strategy in the current environment.

Question: Leah Jordan - Goldman Sachs - Analyst : Great. That's very helpful. And I think as we're talking about promotions, maybe at a high level, if you could just comment on the competitive environment that you're seeing today, how you think about your price gaps, and maybe what you're seeing both from private label and smaller brands?

Question: Leah Jordan - Goldman Sachs - Analyst : Yes, tariffs. That's been one of the biggest questions we've had. Maybe we'll just jump there since you opened the door because I know a lot of investors are curious about that. Obviously, it remains a very fluid environment. Obviously, we continue to have update announcements this week, and I know it will continue to evolve. But could you provide more color on how your input costs are exposed, what's the potential impact, and any mitigation opportunities you see?

Question: Leah Jordan - Goldman Sachs - Analyst : That's great. That's very helpful. I think sticking with the cost side of things. So outside of tariffs, you've also noted increasing cost pressure across various commodities of your input costs. I guess what are you seeing in terms of your inflationary input costs today? How much is locked in at this point? And how do you think about your ability to pass through pricing in the current environment?

Question: Leah Jordan - Goldman Sachs - Analyst : Yeah, absolutely. Great color. So I wanted to go back to your two main segments, frozen and snacking. Maybe we'll start with frozen. You're the market leader in the category. You spoke about the return to volume growth, and that remains positive there. What trends are you seeing in this segment? And how do you view the long-term opportunity in the category? And do you still think there's any education that needs to happen for the consumer to adopt it?

Question: Leah Jordan - Goldman Sachs - Analyst : No, that's great color. Maybe just switching to snacking. The category broadly across the industry has been pretty soft. But as you noted earlier, your trends have been better than that. Maybe you could talk about the trends that you're seeing and why you think that your portfolio is resonating in the current environment?

Question: Leah Jordan - Goldman Sachs - Analyst : No, that's great. Obviously, permissible snacking, we've seen the trend. I think other companies are seeing it as well. I mean we've seen them lean in with innovation. They've been buying up brands, too. So it does seem that the competitive environment might be increasing for these categories. So how do you view your ability to defend share here, especially for categories like meat snacks and popcorn?

Question: Leah Jordan - Goldman Sachs - Analyst : That's very helpful. So putting a lot of the pieces that we've talked about together, I wanted to go back to the FY26 guide. I know we're all looking forward to that next quarter, soon enough. We've talked about a number of puts and takes, some are on the cost side. Obviously, the trends in your business on volumes doing well. But as we look into next year, what are the high-level puts and takes we should think about? And how do you view your ability to preserve margins? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 12:55PM, CAG.N - Conagra Brands Inc at Goldman Sachs Global Staples Forum

Question: Leah Jordan - Goldman Sachs - Analyst : Great. That's very helpful. I think that gave us a lot to think about, and we'll be looking forward to the guide next quarter. But I think you opened up the door to my next question on your free cash flow comments. Obviously, you have made great progress reducing your leverage over the last few years. Just how do you think about improvement from here towards that 3 times target? And how much can be done by debt paydown versus reacceleration in the business at this point?

Question: Leah Jordan - Goldman Sachs - Analyst : Great. That's very helpful. So obviously, the debt paydown is the top priority. But maybe we can just dig into capital allocation a little bit more overall. How you think your -- about your priorities, given the solid cash flow that you're focused on, and maybe more detail around M&A and where you see opportunities there. You obviously announced plans to divest Chef Boyardee recently. And just how are you thinking about M&A broadly going forward as well.

Question: Leah Jordan - Goldman Sachs - Analyst : Great. I think we have time for me to sneak one more question in, so I will. I wanted to follow up on something you mentioned we were talking about the outlook for '26 around the supply disruption that you had within frozen for a couple of categories over the last year. Obviously, you brought the co-man on and made some improvement there. But just if you could provide a little bit more detail on where we are in the recovery. Is it still tracking to the August time frame? And just how you view your ability to regain all the share within shelf space there.

Question: Leah Jordan - Goldman Sachs - Analyst : That's great. Thank you, Sean, David. This is a great chat. Thank you.