Financial Data and Key Metrics Changes - Reported net revenues decreased by 3% to €760 million, with organic sales declining by 3.6% and volume declining by 3.7% [23][24] - Gross margin increased by 90 basis points year on year to 27.8% [24] - Adjusted EBITDA decreased by 1.8% year on year to €120 million, while adjusted EPS fell by 5.4% to €0.35 due to net sales contraction [26][30] Business Line Data and Key Metrics Changes - Net sales for growth platforms rose by 36% year over year in the first quarter, with chicken performing particularly well [15] - Retail sell-through was slightly positive at +0.2%, indicating that sell-in led sell-through by nearly four percentage points [23] Market Data and Key Metrics Changes - The frozen category in Europe remains healthy, with growth recently accelerating, driven by improved volume and value gains [12][13] - The category has outgrown the overall food industry by nearly one percentage point over the past decade [12] Company Strategy and Development Direction - The company is focused on long-term health by continuing to invest in brands and products despite current headwinds [11] - A new master brand advertising campaign is set to launch, emphasizing the taste appeal and nutritional profile of frozen food brands, particularly in the fish category [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from retailer inventory destocking and increased consumer value-seeking behavior, leading to a revised outlook for organic revenue growth [10][29] - The company expects organic sales to return to growth beginning in the second quarter, with profitable growth anticipated for the remainder of the year [23][31] Other Important Information - The company repurchased €49 million of shares and paid €25 million in dividends in the first quarter, marking a 152% increase in total cash returned to shareholders compared to the previous year [9][28] - Adjusted free cash flow conversion ratio fell to 24% due to higher working capital pressures [26] Q&A Session Summary Question: Impact of retailer destocking - Management noted that destocking was broad-based across 12 to 13 countries, with greater than expected impacts [36][37] Question: Outlook for category growth - Management confirmed that the category remains healthy, with expectations for market share growth despite some softness in the UK [40][41] Question: New product innovation and consumer shifts - Management indicated that new consumers are shifting from both smaller brands and private labels, with a focus on snacking occasions [48][51] Question: Input cost increases - Input costs are primarily rising in proteins, particularly chicken and red meat, due to demand and external factors like avian flu [58] Question: Pricing strategy amidst consumer trading down - Management acknowledged that consumers are seeking value, and pricing strategies will be a combination of various factors, including advertising and product innovation [64][66]

Financial Data and Key Metrics Changes - Reported net revenues decreased by 3% to €760 million, with organic sales declining by 3.6% and volume declining by 3.7% [23][24] - Gross margin increased by 90 basis points year on year to 27.8% [24] - Adjusted EBITDA decreased by 1.8% year on year to €120 million, while adjusted EPS fell by 5.4% to €0.35 due to net sales contraction [26][29] Business Line Data and Key Metrics Changes - Net sales for growth platforms rose by 36% year over year in the first quarter, with chicken performing particularly well [14] - Retail sell-through was slightly positive at +0.2%, indicating that sell-in led sell-through by nearly four percentage points [23] Market Data and Key Metrics Changes - The frozen category in Europe remains healthy, with growth recently accelerating driven by improved volume and value gains [11][12] - The UK market is experiencing some softness, particularly in the ice cream segment, which is expected to impact margins [41][68] Company Strategy and Development Direction - The company is focused on long-term health by continuing to invest in brands and products despite current headwinds [10][30] - A new master brand advertising campaign is set to launch, emphasizing the taste appeal and nutritional profile of frozen food brands, particularly in the fish category [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by retailer inventory destocking and increased consumer value-seeking behavior [9][10] - The full-year organic revenue, adjusted EBITDA, and adjusted EPS growth ranges have been lowered due to these challenges [10][29] Other Important Information - The company repurchased €49 million of shares and paid €25 million in dividends in the first quarter, marking a 152% increase in total cash returned to shareholders compared to the previous year [8][28] - The company expects to achieve profitable growth for the remainder of the year despite the current headwinds [23][31] Q&A Session Summary Question: Impact of retailer destocking - Management noted that destocking was broad-based across 12 to 13 countries and various segments, with greater than expected impacts [35][37] Question: Expectations for category growth and market share - Management indicated that the category remains healthy, with expectations for growth in the next quarters and a slight recovery in market share [39][40] Question: Insights on new product innovation and consumer shifts - Management highlighted that innovations are increasingly catering to snacking occasions, attracting new consumers from both frozen and fresh categories [47][50] Question: Input cost increases - Management clarified that input cost increases are primarily related to proteins, with no significant tariff impacts currently observed [58] Question: Pricing strategy amidst consumer trading down - Management acknowledged the volatility in consumer behavior and emphasized a balanced approach to pricing, innovation, and advertising [64][66] Question: Outlook for organic growth - Management expects a combination of volume and price growth, with volume growth anticipated in the second quarter and pricing strategies to kick in later [67][69]

Financial Performance - Total revenue was €760 million, a decrease of 3% year-over-year[22,25] - Organic revenue declined by 3.6%, lagging behind retail sell-through which grew by 0.2%[12,22] - Adjusted EBITDA decreased by 2% year-over-year to €120 million[12,25] - Adjusted EPS decreased by 5% year-over-year to €0.35[12,24,25] - Gross margin expanded by 90 bps year-over-year to 27.8%[12,22,25] Cash Flow and Capital Allocation - Share repurchases amounted to €48.9 million and dividend payments were €25.3 million, collectively up 152% year-over-year[12] - Adjusted free cash flow was €13 million, representing 24% of adjusted profit for the period[29] Guidance - The company tempered full year expectations given 1Q destocking, evolving macro environment and commitment to preserve brand and product investment[12] - Organic revenue growth guidance updated to 0-2% (previously +1-3%)[31] - Adjusted EBITDA growth guidance updated to 0-2% (previously +2-4%)[31] - Adjusted EPS guidance updated to €1.82 - €1.89 (previously €1.85-€1.89)[31]

Core Insights - Nomad Foods Limited reported a decrease in revenue and adjusted EBITDA for the first quarter of 2025 compared to the same period in 2024, primarily due to retailer inventory destocking and the timing of Easter impacting sales growth [1][5][6] - The company has recalibrated its full-year sales, adjusted EBITDA, and adjusted EPS expectations, anticipating organic revenue growth of 0%-2% and adjusted EBITDA growth of 0%-2% for 2025 [4][5][6] Financial Performance - Revenue decreased by 3.0% to €760 million, with organic revenue declining by 3.6% driven by a volume decline of 3.7% [5][6] - Gross margin expanded by 90 basis points to 27.8%, attributed to supply chain productivity improvements [5][6] - Adjusted EBITDA decreased by 1.8% to €120 million, while adjusted EPS fell by 5.4% to €0.35 [5][6] Management Commentary - CEO Stéfan Descheemaeker highlighted strong gross margin improvement and ongoing investment in growth platforms and innovation, despite challenges from retailer destocking and macroeconomic uncertainties [2][4] - Co-Chairman Noam Gottesman expressed confidence in the company's growth potential, noting the strength of its leading brands and portfolio in the healthy frozen food category in Europe [2][4] 2025 Guidance - The company has lowered its full-year revenue and adjusted EBITDA outlook due to unexpected retailer inventory destocking and higher input cost inflation, with adjusted EPS guidance now set at €1.82-€1.89 [4][5] - The adjusted free cash flow conversion guidance remains at 90% or greater [4] Key Metrics - Adjusted EBITDA margin for the first quarter of 2025 was 15.8%, compared to 15.6% in the previous year [35] - The company maintained a strong cash flow position, with cash and cash equivalents at €329.8 million as of March 31, 2025 [23][24]

Core Viewpoint - The current market environment favors stable earnings and strong cash flow, making Nomad Foods (NOMD) an attractive investment opportunity in the frozen food sector [1]. Company Overview - Nomad Foods is a leading player in the European frozen food market, owning brands such as Birds Eye, Iglo, Findus, and Aunt Bessie's, which provides it with durable pricing power and a loyal customer base [2]. - The company focuses on branded frozen foods across Western Europe, which has proven to be a lucrative business model during uncertain economic times [2]. Earnings Estimates and Growth - Recent earnings estimate revisions have garnered attention from analysts, with two analysts increasing their estimates for both the current and next year [3]. - The Zacks Consensus Estimate for 2024 EPS has risen from $1.95 to $2.15, and for 2025 from $2.11 to $2.31, indicating confidence in the company's near-term execution and long-term profitability [4]. - Nomad Foods is expected to grow earnings by over 11.4% this year and an additional 7% next year, which is strong for a consumer staples stock [4]. Valuation Metrics - Despite positive earnings revisions, Nomad Foods trades at a forward P/E of just 9.3x, significantly lower than the broader market and most consumer staples peers, presenting a compelling entry point for investors [5]. Cash Flow and Financial Health - The company has consistently converted a healthy portion of its earnings into free cash flow, allowing it to reinvest in growth, pay down debt, and return value to shareholders [6]. - Nomad Foods is positioned well in a market that rewards consistency and stability, making it an appealing investment choice [6].

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Core Insights - Stocks typically face challenges in May, making it difficult to select top momentum stocks, but the Richard Driehaus strategy, which advocates "buy high and sell higher," can be applied to identify potential picks [1][2] Driehaus Strategy Overview - Richard Driehaus emphasized a preference for investing in stocks that are increasing in price rather than those in decline, which aligns with the philosophy of the American Association of Individual Investors (AAII) that uses the percentage 50-day moving average as a key criterion [2][4] - The strategy incorporates a calculation that compares the month-end price to the 50-day moving average, along with a positive relative strength indicator, to identify stocks in an uptrend [3][4] Screening Parameters - The strategy focuses on stocks with a Zacks Rank of 1 (Strong Buy) and a Momentum Score of A or B, which historically have shown better upside potential [5][6] - Key screening parameters include: - Last 5-year average EPS growth rates above 2% to ensure improving business performance [7] - Trailing 12-month EPS growth greater than 0 and above the industry median, indicating superior earnings performance [7] - Last four-quarter average EPS surprise greater than 5%, suggesting better price performance [7] - Positive percentage change in the 50-day moving average and relative strength over 4 weeks, signaling an uptrend [7][8] Selected Momentum Stocks - Nomad Foods Limited (NOMD) produces and distributes frozen food products globally, with a Momentum Score of A and an average trailing four-quarter earnings surprise of 5% [9] - Hawkins, Inc. (HWKN) is a U.S. specialty chemical and ingredients company, holding a Momentum Score of B and an average trailing four-quarter earnings surprise of 6.1% [10] - PCB Bancorp (PCB) provides banking services to small businesses and individuals, with a Momentum Score of A and an average trailing four-quarter earnings surprise of 7.4% [11]

Financial Data and Key Metrics Changes - In Q3 FY 2025, net sales increased by 4% year-over-year, with volume growth of 9% as the company rebuilt after transitioning to a new ERP system [12][26] - Adjusted EBITDA grew by 6%, reaching $364 million, primarily due to higher sales volumes and lower manufacturing costs [31][32] - Price mix declined by 5% compared to the prior year quarter due to planned investments in pricing to remain competitive [27][32] Business Line Data and Key Metrics Changes - North America net sales grew by 4%, with volume improving by 8%, driven by replacing lost volume from the previous year and new customer contracts [28][29] - International segment sales increased by 5%, with volume up by 12%, despite soft restaurant traffic in key markets [30] - Adjusted EBITDA for North America increased by $15 million to $301 million, while the international segment saw a decline of $8.5 million to $93 million [34] Market Data and Key Metrics Changes - QSR traffic in North America declined by 2% year-over-year, with hamburger chains experiencing a 6% drop in February [28][29] - The company anticipates a mid-single-digit percent decline in potato prices for the 2025 crop in North America, while prices in Europe are expected to remain flat [19][20] Company Strategy and Development Direction - The company is focusing on a value creation plan with the help of Alex Partners to optimize operations and drive growth [9][10] - Efforts include restructuring plans aimed at delivering at least $55 million in pre-tax savings for FY 2025 and $85 million for FY 2026 [12][51] - The company is committed to improving customer relations and expanding its product offerings to meet evolving customer needs [16][18] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer uncertainty has increased, impacting restaurant traffic and overall demand [13][18] - The company expects continued pressure on pricing and margins due to competitive dynamics and inflationary costs [44][45] - Despite challenges, management remains optimistic about achieving full-year guidance and is focused on cost reduction and operational efficiency [46][47] Other Important Information - The company ended Q3 with approximately $1.1 billion in liquidity and a net debt of $4.2 billion, maintaining a leverage ratio of 3.4 times [35][36] - Capital expenditures for FY 2025 are targeted at $750 million, down from the previous year, with a focus on modernization and environmental investments [38][39] - The company returned $151 million to shareholders in the quarter, including $100 million in share repurchases [40] Q&A Session Summary Question: Impact of crop prices on QSR contract negotiations - Management indicated that customer contract negotiations will begin in the summer, and while potato prices are expected to decline, other inflationary impacts will also be considered [57][58] Question: Opportunities from Alex Partners agreement - The focus is on cost savings, productivity, and a data-driven approach to identify growth opportunities across the entire P&L [61][63] Question: Q4 gross margin expectations - Management explained that higher fixed cost absorption and other input costs will impact gross margins, with a forecasted decline of around 700 basis points [69][72] Question: Connell plant future plans - The company has decided not to sell the Connell plant and is conducting a strategic review of other options [100][101] Question: Weakness in QSR traffic - Management attributed the decline in QSR traffic to consumer uncertainty and macroeconomic factors, while noting that French fry attachment rates remain strong [108][119] Question: Changes in capital expenditures - Maintenance capital expenditures are about 3% of sales, with additional spending for modernization and environmental initiatives [136] Question: Competitive landscape in QSR contracts - The company is adjusting its contract schedule and is open to new ideas and innovations to drive traffic for QSRs [138][139]