Conagra(US:CAG)2024-07-11 12:00Financial Data and Key Metrics Changes - For fiscal year 2024, organic net sales were $12 billion, down 2.1% due to a prolonged volume recovery in the domestic retail business [21] - Adjusted gross margin expanded by 58 basis points, and adjusted operating margin expanded by 34 basis points year-over-year [8] - Adjusted EPS for the fiscal year was $2.67, with a net leverage ratio of 3.37 times, improved from over 5.5 times [10][22] Business Line Data and Key Metrics Changes - In Q4, organic net sales declined 2.4%, driven by a volume decline of 1.8% and a 0.6% price mix reduction [23] - The Snacks business saw positive consumption trends, helping to gain market share, while Grocery and Foodservice segments experienced volume declines [24] - Refrigerated and Frozen segments showed volume increases, with Frozen single-serve meals returning to growth [12][24] Market Data and Key Metrics Changes - Approximately 65% of the portfolio held or gained volume share in Q4, marking the fourth consecutive quarter of share gains [11] - In the Snacks domain, 80% of brands held or gained volume share, indicating strong competitive performance [12] - The international business delivered strong sales growth, driven by results from Mexico and global exports [24] Company Strategy and Development Direction - The company is focused on maximizing consumer engagement through strategic investments, aiming for gradual volume improvements [18] - Continued brand building investments are planned for fiscal 2025, with expectations of stable adjusted gross margins despite ongoing inflation [19] - The company aims to achieve $1 billion in cost savings by the end of fiscal 2025, targeting a net leverage ratio of approximately 3.2 times [17][32] Management's Comments on Operating Environment and Future Outlook - The management anticipates a challenging consumer environment in fiscal 2025 but expects a transition towards a normalized operating environment [18] - The company is encouraged by steady volume improvement and market share gains from investments made during fiscal 2024 [31] - Fiscal 2025 guidance includes organic net sales growth projected to be flat to down 1.5%, with adjusted EPS expected between $2.60 and $2.65 [20][32] Other Important Information - The company repaid a $1 billion senior note in Q4 and improved free cash flow by approximately $1 billion over fiscal 2023 [30] - Capital expenditures increased by 7% to $388 million, with dividends paid amounting to $659 million in fiscal 2024 [30] - The company plans to resume minimal share repurchases in fiscal 2025 to offset dilution from equity incentive plans [32] Q&A Session Summary Question: What are the expectations for organic net sales growth in fiscal 2025? - The company expects organic net sales growth to be flat to down 1.5% compared to fiscal 2024 [32] Question: How is the company addressing inflation and cost pressures? - The company plans to achieve approximately 4% cost savings as a percentage of cost of goods sold to offset projected inflation [18][32] Question: What is the outlook for the Snacks and Frozen segments? - The Snacks segment is expected to continue its positive momentum, while Frozen is anticipated to maintain steady growth [12][24]