CAG - NYSE

Good morning. This is Melissa Napier from Conagra Brands' Investor Relations. Thank you for listening to our prepared remarks for the Conagra Brands second quarter and first half fiscal 2025 earnings. At 9:30 eastern time this morning, we will hold a separate live question-and-answer session on today's results, which you can access via webcast on our Investor Relations website. Our press release, presentation materials, and a transcript of these prepared remarks are also available there. I'm joined this morning by Sean Connolly, our CEO; Dave Marberger, our CFO; and Matthew Neisius, Senior Director, Investor Relations. We will be making some forward-looking statements today. And while we are making those statements in good faith based on current information, we do not have any guarantee about the results we will achieve. Descriptions of our risk factors are included in our filings with the SEC. We will also be discussing some non-GAAP financial measures. Please see the earnings release and the slides for GAAP to non-GAAP reconciliations and information on our comparability items, which can be found in the Investor Relations section of our website. I'll now turn the call over to Sean.

Thanks, Melissa, and good morning, everyone. Thank you for joining our second quarter fiscal 2025 earnings call. Let's begin on Slide 4. Our second quarter results reflect the fact that we continue to win with consumers despite ongoing economic pressures. We saw a return to growth in Q2 as we drove volume improvement, an organic net sales increase, and market share gains, demonstrating the continued strength of our innovation and strong execution by our team. These results highlight the enduring power of our brands and the effectiveness of our focused investments, which have reinforced our leadership in large important categories. While we expect our top-line momentum to continue in the second half, our profitability will be pressured by higher inflation and unfavorable foreign exchange rates. Accordingly, we are updating our financial guidance for the remainder of the year. Our revised guidance reflects both our prioritization of continued momentum with the consumer and our expectation that the inflation relief we previously expected in the second half of fiscal '25 is still forthcoming, but in fiscal '26. As I noted, economic pressures continue to shape consumer purchasing decisions. We're still seeing value seeking behaviors, with consumers prioritizing affordability and maximizing value. Across the industry, manufacturers are deploying a similar playbook to address these challenges, increasing investments in advertising, promotions, trade initiatives, and innovation. These measures are designed to appeal to increasingly stretched consumers and drive growth, but the consumer response to these investments has varied significantly by category and by company. On Slide 6, you can see Conagra's investments have driven a strong response. In Q2 of last fiscal year, I stated our commitment to invest more to put the inflation-driven volume declines in the rearview mirror, with the goal of returning our portfolio to growth. Since then, we have seen our investments drive steady progress, and in Q2 it was satisfying to see that return to growth materialize. And since we believe future cash flows and long-term shareholder value will best be served by way of continued top-line momentum, our strategy will not change in the second half. Let's take a closer look at how this strategy translated into our performance this quarter. On Slide 7, you can see how our proven playbook, which centers on modernized products and focused investments to support our innovation, have driven positive volume recovery in our key domestic retail business. This builds on the trends we've seen over the past year. And while the revenue mix was a bit different due to the value-seeking behavior shifts I discussed earlier, our track record of navigating today's difficult operating environment reinforces our confidence in continued volume recovery. The effectiveness of our strategy and resiliency of our portfolio are particularly evident on Slide 8. Here you see our outstanding share performance throughout fiscal '24 and the first half of fiscal '25. 67% of Conagra's portfolio held or gained volume share in the second quarter, marking the fifth consecutive quarter of share gains. And our share performance is even stronger in our highly strategic frozen and snacks domains, where 87% of our portfolio held or gained volume share in the second quarter. Further, our share performance again outpaced our near-in peer set. In fact, Slide 9 shows we outperformed our closest peer by 24 percentage points. Turning to Slide 10, as I emphasized last quarter, our volume progress and strong share gains continue to be driven by our disciplined approach to brand building rather than heavy discounting. The industry merchandising environment remains rational, with two key metrics providing a clear picture, the share of volume sold on promotion and the average discount on promotion. Our volume share sold on promotion remains consistent with historical norms. Both today and in the pre-pandemic period, the volume of our sales on promotion remained below our closest peers. When we do engage in promotions, the discounts are targeted, reinforcing our commitment to thoughtful brand management. Said differently, Conagra remains less reliant on promotions to drive volume and maintains a disciplined approach to prioritize the long-term health of our brands. Turning now to our domains, beginning with frozen. We continued to see strong improvement in Conagra's frozen consumption as demonstrated in our Q2 volume sales, shown on Slide 11, which have been improving for five consecutive quarters. And when we take a wider perspective, as shown on Slide 12, our Q2 volume sales growth continued to outperform the total edible category and the overall frozen department as well. This growth is driven by a return to convenience, contributing to strong volume share gains in single-serve meal brands like Banquet and Marie Callender's, as well as increased share in Birds Eye Vegetables and our multi-serve meal brands. Taking a closer look at single-serve meals, our largest frozen category on Slide 13. Conagra represents the majority of volume in the $6.4 billion category, an outstanding achievement in today's dynamic and competitive environment. Our investments have enabled us to drive steady share improvement in this category, and in the second quarter, we increased our volume share position by three percentage points versus the prior quarter. Moving to our snacking domain on Slide 14. Our snacking portfolio continues to perform well, although rising cocoa prices combined with delayed winter weather in many parts of the country contributed to the Swiss Miss decline. When you exclude Swiss Miss, snacks volume increased 0.6% for the quarter. As you've heard us say before, while products like Swiss Miss may experience short-term impacts due to seasonality and weather, these tend to recover as winter finally arrives and equal out over the year. Further, we continue to benefit from our advantaged portfolio spanning permissible snacking subspaces like seeds, meat snacks, and popcorn, where our brands saw increases in volume sales in the second quarter. Turning to staples on Slide 15. We continued to see encouraging volume trends delivering sequential volume sales improvement during the second quarter. This business provides tremendous utility to consumers and tremendous cash flow to Conagra. And some of that is coming from innovation. For example, we're excited about the continued strong performance of our chili business, including Wendy's chili, which recently introduced its new No Bean variety. This success underscores Conagra's ability to innovate to meet evolving consumer preferences. While we're happy with our top-line performance through Q2, we do expect two factors to pressure the second half of the year, inflation and FX. On inflation, last quarter we told you we expected it to peak in Q2 and then fall in the second half, driven in part by lower costs on proteins. Our latest forecast projects that relief on protein costs will be delayed until after the end of the fiscal year. But to be clear, we do still expect these costs to fall as animal supply strengthens. We also expect some deflation on crop-based inputs as fiscal '26 unfolds. Given this updated outlook, we are not locking in commodity prices at the peak. Instead, we'll continue to monitor costs and prioritize the top-line, with the goal of going into next year with continued strong consumer momentum. Regarding FX, our International segment was impacted in Q2 by a strengthening U.S. dollar, which is expected to persist through the second half of the fiscal year. Despite our updated inflation and FX outlook for the second half, we're maintaining our commitment to our brand-building investments, recognizing their critical role in driving top-line momentum, and strengthening consumer loyalty over the long-term. We will implement limited new inflation-justified pricing actions in a couple of areas, which we expect will help offset some of the rising cocoa and sugar prices. At the same time, we remain disciplined in our efforts to maximize cash flow, prioritize debt reduction, and actively reshape our portfolio to position the business for sustainable success. Taking into consideration the headwinds we anticipate in the second half, as well as the dynamic consumer environment, we are updating our guidance for fiscal '25. We now expect to come in near the midpoint of our organic net sales range of down 1.5% to flat. Adjusted operating margin is expected to be approximately 14.8%, and adjusted EPS is expected to be in the range of $2.45 to $2.50. With that, I'll pass the call over to Dave to cover the financials in more detail.