Q3 2024 Conagra Brands Inc Earnings Call Transcript
Key Points
- Conagra Brands Inc (CAG) reported a nearly 7-point swing in scanner volume from Q1 to the most recent 4 weeks, indicating strong progress in Frozen overall.
- The company holds a 51% market share in Frozen Single-Serve Meals, up 1.7 points versus a year ago, showcasing continued market leadership and share gains.
- Investments in marketing and innovation are showing positive ROI, with the company seeing responsiveness and good returns on their investments.
- Conagra Brands Inc (CAG) is on track to implement its connected shop floor program in half of its facilities in the next couple of years, which is expected to be key to margin expansion going forward.
- The company's supply chain team is driving critical cost savings, providing fuel for growth and helping to maintain and expand gross margins.
- Organic sales in the Refrigerated & Frozen segment declined by 8%, with the optics being affected by noise in the Refrigerated part of the business.
- Inflation has slowed but is still present, with a 2.9% inflation rate impacting margins by 1.9% in the quarter.
- The company's volumes are still down, although there has been sequential improvement, and the exact timing of when volumes will inflect positively is uncertain.
- There is a lag effect in margin pressure when new inflation leads to taking new pricing, which can temporarily affect profitability.
- Conagra Brands Inc (CAG) is managing a headwind from absorption due to lower volumes and a strategic decision to reduce inventory, which impacts production in plants.
Good day, and welcome to the Conagra Brands Third Quarter Fiscal Year 2024 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Melissa Napier, SVP, Investor Relations. Please go ahead.
Good morning. Thank you for joining us today for our live question-and-answer session on today's results. Once again, I'm joined this morning by Sean Connolly, our CEO; and Dave Marberger, our CFO.
We may be making some forward-looking statements and discussing non-GAAP financial measures during this session. Please see our earnings release, prepared remarks, presentation materials and filings with the SEC, which can all be found in the Investor Relations section of our website for more information, including descriptions of our risk factors, GAAP to non-GAAP reconciliations and information on our comparability items.
Operator, please introduce the first question.
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