Core Insights - Private equity firm Brynwood Partners is selling its pizza division, Great Kitchens Food Company, to Rich Products for an undisclosed amount [1] Group 1: Company Overview - Great Kitchens Food Company, formed in late 2020, is a leading U.S. manufacturer of private label take-and-bake pizzas and expanded its offerings in 2023 by acquiring the Uno Foods Division from Uno Restaurant [2] - The company sells private label and branded food products nationally through retail, food service, and e-commerce channels [3] Group 2: Transaction Details - The sale of Great Kitchens is expected to close during the first quarter and is part of an active deal-making period for Brynwood Partners [3] - Brynwood previously divested Harvest Hill Beverage Company for approximately $1.5 billion and acquired Chef Boyardee for $600 million, indicating a strategic focus on food and beverage brands [4] Group 3: Strategic Implications - Rich Products, known for its cookies, donuts, breads, and pizza crusts, aims to enhance its pizza and flatbread platform through the acquisition of Great Kitchens, which will allow for improved capacity and crust innovation [5] - The merger is seen as an opportunity to accelerate innovation and elevate industry standards, according to the leadership of Great Kitchens [6] Group 4: Industry Context - The transaction reflects a broader trend in the food industry where companies and private equity firms are reassessing their assets, with notable recent acquisitions including B&G Foods' purchase of Del Monte Foods' broth brands for $110 million and Smithfield Foods' acquisition of Nathan's Famous for nearly $500 million [6]

Group 1: M&A Activity - Brynwood Partners' CEO Henk Hartong III is looking to pursue more mergers and acquisitions (M&A) following the acquisition of Chef Boyardee, indicating a proactive approach in the current M&A environment [2] - The Nutriment Company, led by CEO Anders Kristiansen, is exploring M&A opportunities to drive sales growth, particularly in the fresh pet food sector [3] - Nomad Foods' venture arm, Future Foods Lab, is focused on "functional nutrition" and has a pipeline of acquisitions planned for the near future, with aspirations to reach $1 billion in revenue by 2025 [5] Group 2: Company Strategies and Market Focus - The Nutriment Company specializes in fresh pet food for dogs and cats and is expanding its presence in the European market, indicating a strategic focus on growth in this segment [3] - Holie, a company founded in 2018, has launched a range of better-for-you cereals and is expanding its market reach from the Netherlands and Belgium into the UK [4] - Captain Fresh's CEO David Suarez noted a decline in the plant-based meat category, attributing it to product quality issues, which suggests a need for improvement in this market segment [6]

Financial Data and Key Metrics Changes - Conagra's organic net sales for Q1 2026 were $2.6 billion, reflecting a 0.6% decline compared to the prior year [18] - Adjusted gross margin was 24.4% and adjusted operating margin was 11.8%, both down from the previous year but slightly better than initial expectations [18] - Adjusted earnings per share (EPS) were $0.39, down $0.14 from the year-ago period [18] Business Line Data and Key Metrics Changes - Grocery and Snacks segment net sales were $1.1 billion, representing a 1% decline in organic net sales [19] - Refrigerated and Frozen segment also delivered $1.1 billion in net sales, with organic net sales up 0.2% [20] - International segment organic net sales declined 3.5%, while Foodservice segment returned to growth with a 0.2% increase [20] Market Data and Key Metrics Changes - 44% of Conagra's portfolio held or gained volume share in Q1, an improvement from Q4 fiscal 2025 [7] - Frozen portfolio volumes improved by 3.2 points compared to Q4 fiscal 2025, with significant share gains in frozen vegetables, meals, and prepared chicken [8] - Snacks business saw strong volume in protein snacks, but faced declines in specific products due to promotional timing shifts [10] Company Strategy and Development Direction - The company is focused on growing its frozen and snacks segments while investing in supply chain resiliency [16] - Conagra is maintaining a disciplined approach to capital allocation, with $450 million planned for capital expenditures [15] - The company successfully completed divestitures of Chef Boyardee and frozen seafood businesses, using proceeds to reduce net debt by over $400 million [13] Management's Comments on Operating Environment and Future Outlook - Management expects inflationary pressures and weak consumer sentiment to persist, reaffirming full-year guidance for fiscal 2026 [5] - Core inflation expectations have increased to the low 7% range, primarily due to rising costs in animal proteins [14] - The company anticipates organic net sales growth for the second half of the year as supply constraints ease [28] Other Important Information - Conagra reduced net debt by nearly $1.1 billion compared to the year-ago period, ending the quarter with net leverage at 3.55 times [25] - The company is on track to complete its supply chain modernization efforts, including the Baked Chicken project [12] - Adjusted SG&A expenses were unfavorable to the prior year due to higher incentive compensation and advertising spend [22] Q&A Session Summary Question: What are the expectations for organic net sales growth? - The company continues to expect organic net sales growth in the range of negative 1% to positive 1% for fiscal 2026 [26] Question: How is the company managing inflation and tariff costs? - The company has been able to mitigate a large portion of tariff costs in Q1 but expects higher net tariff costs in Q2 due to inventory utilization [28] Question: What is the outlook for the second quarter? - The company expects organic net sales to decline in low single digits in Q2, driven by recent consumption trends and trade expense shifts [28]