Conagra Brands, Inc. (CAG) Earnings Call Transcript & Summary

All right. If we could just find our seats, we'll kick off our next presentation. We're thrilled to welcome back Conagra Brands to the CAGNY stage. Please first join me in thanking Conagra for again generously sponsoring yesterday evening's reception. Conagra is in a very different place this year, having moved past much of the supply chain issues from a year ago, and now seeing underlying business momentum moving in the right direction. So too is the company intently focused on free cash flow and has put together several strong free cash flow conversion years as it looks to maintain the dividend and continue to pay down debt. With us today are CEO, Sean Connolly; CFO, David Marberger; and SVP of Growth Science, Bob Nolan. Thanks for being here, and over to you, Sean.

All right. Thank you, Andrew, and good morning, everybody. Thank you for joining our 2026 CAGNY presentation. We are really glad to be here and really glad to have the opportunity to share this presentation with you. After we were all here last year, and it was a bit of the fellowship of the miserable, we figured you're probably ready for a little bit of positivity. So you'll be the judge, but at the end of our presentation today, I think you'll agree that at Conagra, we are successfully driving a return to growth. This is our legal disclosure on forward-looking statements. If you have any more questions on this, please go to our website. All right. Let's get down to business. This is our agenda for our presentation this morning. I'm going to kick us off with a brief presentation on who we are and where we stand in terms of business performance. Then I'm going to turn it over to Bob Nolan, our Senior Vice President of Growth Science. Bob has an interesting presentation teed up for you regarding how we will win the battle for what we call superior relative provocativeness. And then our CFO, David Marberger, will conclude today with an update on our financials. For those of you who might be newer to our story, just a quick minute or 2 on who we are as a company. Conagra is $12 billion in organic net sales and virtually all of our revenue comes from the United States. We are squarely a domestic company with 92% of our revenue coming from the U.S. And we compete in highly attractive categories with a long-term history of growth like frozen food, where we're one of the biggest players in the world. And importantly, within the categories where we compete, private label is underdeveloped relative to the food average. And our portfolio is made up of market-leading brands. In fact, as you can see on the right-hand side of this chart, 81% of our revenue comes from brands that are #1 or #2 in their categories. And importantly, our brands offer something for everyone. After all, consumers today are incredibly diverse. They have different preferences, different tastes, different priorities. And our goal is to maximize household penetration. So we have a variety of brands to offer them that meet their specific needs. We have premium brands like Healthy Choice, Reddi-wip, Marie Callender's, brands that are tailored to deliver great value like ACT II popcorn, Banquet meals, Snack Pack. And we have a great stable of insurgent brands. These are smaller, high-growth brands that often appeal to younger people and consumers who shop in alternate channels who fancy themselves in being early adopters. So brands like our great FATTY Smoked Meat Stick, which was our most recent acquisition, Angie's BOOMCHICKAPOP popcorn, and a new brand you'll hear more about today called Rebel Roots. Bob will hit on that a little bit. Why does this matter? Why do we want brands that offer something to everyone? Because the name of the game is maximizing household penetration. And if you have a very diverse consumer base, you need different brands that do different things for different consumers in different places. That's the way our portfolio is built. Here's how I want you to think about our portfolio. We compete in 3 consumer domains: frozen, staples and snacks. We have a highly focused portfolio for $12 billion, but it's really built around 6 technical platforms. That's where our R&D team has built their expertise. At Conagra, brand building always begins with building superior food. You got a chance to taste some of that last night. And our portfolio is built to be highly competitive in an ever-important world of health and wellness. Let's break these down real quick so you can get in a bit more detail. These are our 3 consumer domains: frozen, snacks, and staples. The first 2 are our growth domains, frozen and snacks. These represent about 70% of our revenue base. This is where most of our innovation investment is focused. This is where most of our A&P investment is focused. The third piece of our business is staples. These are largely center store grocery products. Their goal is to be stable because they're very high margin, very high cash flow. And that cash flow is what funds our growth drivers in the other 2 pieces of the business of frozen and snacks. So that's how the whole portfolio comes together. I already told you that it's a scaled portfolio of $12 billion and that we're focused in the United States, but the 6 technical platforms that our R&D team has built expertise in are as follows: meals, sides, protein, enhancers, salty snacks, and sweet treats. That's where we have technical expertise. That's what drives our innovation machine. Our top 5 retail customers account for about 60% of our total retail sales, and our top 15 brands represent about 75% of our total revenue. Our playbook, we call the Conagra Way. It starts with being absolutely relentless about product and packaging innovation. This is where we leverage our great culinary team and our growth science capabilities. Then we partner with our retailers to secure premium placement for our products on shelf and premium quality merchandising. And then we invest A&P, largely in the social and digital realm because that's where consumers today learn about products, and that's where they vet products to get them into their consideration set and say -- conclude they're worthy of purchase. Health and wellness has never mattered more in food than it does today. It is absolutely critical. And our products fit that bill. We are well positioned to navigate the current health environment. Take our Frozen business. We offer portion control. We offer high-quality ingredients like protein and vegetables. It's basically high-quality food that's flash frozen at the peak of freshness. That's what we do. And you might be interested to know that our Frozen business is already completely free of artificial dyes and the balance of our portfolio will be free of dyes by the end of next year. And 65% of our portfolio would qualify as what you call clean label. Take FATTY as an example, our great Smoked Meat Stick. It's basically grass-fed beef, with a tiny bit of sugar and then it's smoked for delicious flavor. That's critically important, especially to today's young consumers. So with this focus on health and wellness, we were very pleased to see that we developed peer-leading global nutrition index as measured by the esteemed Access to Nutrition initiative, as you can see on this page. Why is this important? Because it gives us confidence that we can continue to grow even in an evolving regulatory landscape. Now I want to pivot to business performance a little bit. We are continuing to build momentum across our portfolio. On this page, I'm showing you volume sales and dollar sales over the past year. And you can see the trends are moving in the right direction. And in fact, we've returned to growth. What's key is that circle on the right. In our growth domains of frozen and snacks, 75% of our portfolio is holding or gaining share. That's a very strong number. And if you want to isolate frozen in the absolute, here you go. Our investments in frozen are driving strong volume improvement. Some of you may recall that last year through our second quarter, we had strung together 7 straight quarters of improved volume trends and had returned to strong growth in frozen. We then ran into a supply interruption that we worked through the spring and into the early summer. We are now back to 98% service, and you can see the incredibly strong rebound in our Frozen business back to growth on a 1-year and a 2-year basis. And again, that circle on the right, a staggering 83% of our frozen portfolio is holding or gaining share. That's an outstanding number. Take a look at snacks. 5.3% growth quarter-to-date, outpacing not only our snack categories, but even more the broader snack arena where you've seen people walk away from carbs and sugar. Excellent performance in our multibillion-dollar snack portfolio. Why? Because we sell protein and fiber, and that's what consumers are looking for in today's snacking environment. So today, during the course of our presentation, we're going to focus in on answering 2 questions for you that we believe are critically important. Number one, what will separate the winners from the losers in the pursuit of growth? And two, how is Conagra Brands positioned to navigate this environment? And when we're done, these are the 4 conclusions that we want you to take away. Number one, navigating change is not new for food, consumer packaged goods companies. In fact, that's what we've been doing forever. But not every company will perform equally. Two, superior relative provocativeness. That's the key to driving category growth and brand vitality. Lately, I've been reading a lot around a different type of SRP, suggested retail price and the notion that companies need to invest more to fix price points that ran up too high during the inflation super cycle. Well, that is not the problem for Conagra. As you just saw in our numbers, our price points are just fine. That's because over a year ago, we elected to invest margin in the service of volume and make sure that our price points were working for consumers. And you know what, they are. But keep in mind, price value alone is not sufficient to get consumers to buy your stuff. And that brings me to the third conclusion we want you to take away today. Winning the battle for superior relative provocativeness is about optimizing your benefit bundle using different brands across very diverse consumer sets. so that you can win with consumers. And Bob is going to break this down for you in just a minute. And finally, Conagra Brands is well positioned to return to growth. In fact, we're already growing on both a 1-year and a 2-year basis. So not surprisingly, we put out a release yesterday reaffirming our guidance. With that, I'm going to turn it over to our Senior Vice President of Growth Science, Bob Nolan, to tell you a little bit more about superior relative provocativeness. Bob?

Thank you, Sean. Great to be back here in Orlando and see everyone again. I want to thank the chefs for some amazing food last night. I don't know about you, but I went back for a second help into that brisket, holy cow. That was absolutely incredible. My team works really closely with the chefs and our R&D folks to really convert what we see in the marketplace, what consumers desire into absolutely delicious food. Hopefully, you all got a snack bag in your room, too, of all the Conagra snacks that we've been launched in the last couple of years. There's some great media in there. My team put together a couple of great publications. It's our third year of launching our Future of Frozen, kind of our view of what we see across the industry on frozen food and then our first year of launching the future of snacking. So hopefully, you'll have a great read night, and I'd appreciate any questions any of you might have around that content. So let's get started with today's slide. So how do you win this battle for superior relative provocativeness? I'm going to unpack that, so everybody can kind of digest it. So first of all, we need to understand the consumers at a very granular level because they're changing more rapidly than ever before. We've got to create solutions with our innovation, with our marketing, with channel strategies that help us reach these changing consumers. And we've got to break through in the clutter in the marketplace. Everybody is competing for attention. We've got to make sure we're amplifying the impact of all the work we're doing so consumers know what Conagra is all about. So let's start with the consumer. So consumers are diverse, okay? That's nothing new. That's news everybody knows on there, but it is changing more rapidly than before. The last 5 years since the pandemic have really changed the acceleration curve for [ behavior ] and pushing consumers to try new things, shop new places, buy new categories that they have never bought before. We strive to understand what's behind this, what's driving these changes? What are the forces in their family lives, the problems they're trying to solve with their food every day. And then we try to convert this quickly into marketplace solutions that meet all of the needs that consumers have. We've been building for the last [indiscernible] engine, really we think gives us a competitive advantage. And it's not based on the old research of the past. We're not doing focus groups. We're not doing surveys. Consumers are -- they'll give you answers, but they are not reliable, predictable. We think that looking and analyzing real human behavior is the absolute key to winning in the marketplace. We've been getting and collecting everything you can imagine around these large data sets [indiscernible] [ customer data ] can do consumer apps and what they're saying about our products and then all of the digital conversations, videos and pictures people are posting. This is a lot of data. And it's been at the heart of our engine that drives our innovation in the last few years, but the data has been growing at the levels that you can imagine. So we've been employing AI for the last few years to data to [ mine this data set. ] To see the connections between the data sets that humans can no longer observe and then really do it way faster than we have in the past, so we can get it into the market much quicker. So from this engine, I'm going to give you a little taste of what we're seeing right now, who the consumers are, how their eating, needs have been changing and then where are they starting to shop. So let's start with the middle class. The middle class has been shrinking for the last 50 years. You see this in the headlines quite a bit, 10 points lower percent of representation than it was 50 years ago. But I think what's even more important on this slide is it's about 20 points of buying power, right? So the middle class is shrinking and the dollars they have to spend have been shrinking. And the growth is driven by the ends now of the spectrum, right? It's driven by these lower income consumers and upper income consumers. So who are they? So lower income consumers are made up of 2 large groups, the majority of them. It's younger consumers just getting started, right? Like when I graduated college, you're on your own for the first time. You don't have a lot of money coming in. You're trying to make ends meet with your budget. Retired consumers make up the other large group. And then that's folks that are on fixed income, right? They're trying to stretch their dollars, they're trying to make sure their food and nutritional needs are met. I think this may surprise some folks. The majority of folks in the low-income bucket are not on government assistance. They're not getting SNAP. They're using their own hard earned dollars to stretch out their meal needs. And because these dollars are short, they shop really basket to basket or even meal to meal. They buy much smaller baskets and they buy a lot fewer items as they're trying to stretch out till the next paycheck comes in. We'll flip it around to the other side. When you think about upper-income consumers, they're in another book. They've got some money to invest. This is something that may also amaze you, is this is the group that buys the most on promotion, not middle income, not low income because they have the money to invest, right? They've got the ability to invest when there's deals to buy 10 of something on sale. And they also have the ability to store this, right? They've got larger pantries. They may have a second freezer in their homes. So these are the folks that invest in shopping in the club channel and buying larger sizes. So as they say, sometimes you have to have money to make money, and this is kind of what this group falls into. And then Gen Z. So Gen Z, I get a lot of people always ask me, hey, isn't this just another generational change, just like it was from Gen X to millennials. And I would say the data says no. These folks aren't on the same normal curve at 15% different than the previous generation. They're eating spicy and bold foods, international flavors at 3x the rate of previous generations. They're eating way more handhelds and on-the-go products. And they have a whole new definition of what health and wellness is for them, and they want this all bundled together for on-the-go lifestyles. But families with kids have always been the heart of the food industry. They drive the most sales, right? They're in peak food years, we would say, right? They've got kids, the kids are on the go. They're eating more. They got teen friends coming over. They're spending more than any other group, and they're really busy, right? They're some working households. They're trying to crunch their time and make the most of their food. They buy lots of snacks, they buy lots of frozen because it adds convenience to their lives. But they're getting really adventurous with the foods they're eating. When my kids are growing up, we fed them a lot with chicken nuggets and mac and cheese. They ate it, they loved it. That was awesome. I talk to the younger parents on my team today, and they're talking about their kids eating sushi, eating ramen, eating in empanadas, things that I only discovered in the last few years myself. Aging adults. So this is pretty predictable. This one -- this will be the fastest-growing cohort of consumers for the next 30 years. And yes, there's consumers that are kind of falling the traditional what you would think about with seniors. They need support from their doctors to give them advice on what to eat, what not to eat, and they're kind of slowing down a little bit. That's not where the growth is going to come from. Growth is going to come from active adults. These are folks that are retiring with the most money of any generation in the past. They want to live and act like they're Gen Z. They want to go surfing. They want to go mountain climbing. They want the food to be portable. They have all new definitions of health and wellness. This is really different than any generation before. So that's a little glimpse of who the consumers are. But where are they shopping? Where are they getting foods that meet their needs in their lives. Well, when COVID happened, it kind of changed and disrupted the scheme. E-comm has been growing for years. But all of a sudden, people said, "Oh, I don't want to go out to the stores. I want to stay at home." So they started ordering a lot more e-comm. And I don't just mean the young generation that was already experimenting with that. I mean every generation started buying online and have delivery to their house. But that quickly pivoted to hyperinflation. Prices started going up and consumers started to say, wow, I'm going to stretch my dollars to meet my needs. I need to explore other options. I need to look at the dollar channel. I need to buy maybe more at club. I need to try value grocery for the first time to meet my food needs. And then in today's world, we call it the age of virality. And consumers are discovering products, especially younger generations in whole new ways. It used to be you discover a product on the shelf, maybe see some advertising. Maybe on e-commerce, this next generation is discovering products on TikTok and on YouTube, where people are showing and demonstrating the products, how they taste, their friends are talking and reviewing those products. And you really have to get their attention to get your products noticed. And of course, these emerging channels are driving lots of growth, right? They're up over 3 points over '23. And the traditional channels are starting to shrink as consumers find new choices and new places to get their foods. It's driven by just who you think it would be: Gen Z, young families, upper-income folks. They have choices and they want new experiences when it comes to buying their food. E-comm has been driving over half the growth over the last year. Not a surprise, and it's really moving away from click-and-collect back to delivery, the ultimate convenience where the food comes to your door. Yes, Gen Z and millennials and single persons are driving this. But you might be surprised that lower-income folks are the group that indexes the most for e-comm. And so there's a couple of key driving reasons for that is, one, it lets them have many choices where they can see the prices and choose the best bundle for their products. But also, they get to manage the total spend before they hit that button that they end to buy, right? So it's great for them to kind of make sure they're not over their budgets. So that was just a taste, the tip of the iceberg of what we see around consumers. But what do you do with this when you're trying to build this [ innovative ] bundle to achieve the superior relative provocativeness we're talking about, right? So let's talk about how you convert that to solutions. So we've created kind of an engine for us, a process, a formula that helps us digest this wealth of insights, but then turn it into the right solution for the right time, with the right benefits for every consumer group that we serve, right? It's all about taste. It's all about economy or value. It's about convenience and it's certainly about health in today's world. And finding this right balance lets us compete in the marketplace and get that attention and provocative is consumers are looking for. Let's talk about each of these a little bit. The taste has always been king in the food industry, right? We all strive as food manufacturers to get somebody to like our product and then buy it a second time. It's a repeat rate, very common. But I would tell you what consumers of today's generations are demanding from taste is really different, right? Like I talked about with some of the trends earlier, global dishes, international foods are growing at 15% in a flat food world. Bold flavors is up 20%. And even comfort recipes, things that you remember from your past growing up at [ Southern ] are growing at 8%. People want their food to be an experience, not just a sustenance. And then economy and value really depends on who you are, how you invest in your lives, right? If you're lower and middle income, people are still having it in meal stretchers, right? They're buying ingredients. They're investing time, their own time to save a little bit more money. They're prioritizing some of the value channels like dollar and they're looking for affordable options within the categories. But if you're upper income, you might be shifting to premium items, right? You're eating maybe out at best restaurants, but you want that high level of quality food. You're stocking up because you can, right? You're maximizing your deals in store. You're investing to save more money. Convenience has been key, I would say, for the last 100 years since the invention of the first general store, consumers all of a sudden could get their goods brought to them across the counter. And in today's world, people are time crunched. 77% of meals are made in less than 15 minutes, really fast. A lot of people don't even know what that meal is before they start preparing it. They're looking for quick solutions that are easy cleanup. Frozen category lends itself to great solutions in this area. And then consumers are looking for way more things on the go. As they have busier and active lifestyles, they want their snacks to be portable and go with them wherever they're at, whether it's the gym or it's on the way to school. But they have higher demand for these. As Sean mentioned earlier, they don't want snacks just to taste great. They want them to deliver value nutrition to fit their new active lifestyles. And then health is the overall [ goal ]. It's a behemoth in terms of size, $324 billion, growing at double digits. And a lot of you, when you were thinking about your breakfast today, probably prioritized some of these attributes, things like high protein, fiber, no seed oils, zero sugar, grass fed, focused on weight loss, portion control. These are the attributes that have been really driving change around food. But when you're talking about health, you can't avoid talking about GLP-1. It's certainly been in the headlines with the new [ pills ] that are coming. Penetration is under 8% today for [ U.S. adult ] consumers. We track them really in detail to understand which categories they're buying, which categories they're moving away from to understand the moving demand. We think it's going to be double digit in the very near term and then go [ get from ] from that. And it's not just about diabetes like [indiscernible] or even weight loss. Every day, there's a study in the newspaper talking about a new [ element by GLP-1 ], brain health or heart health or everything else you can imagine [ under the sun ]. And when you're on GLP-1, you're taking in less calories. So every calorie has to work harder to deliver the nutrition you need. People are focused on their portion control, certainly high protein, fiber-rich, more fruits and vegetables in their diet to keep their systems still working overall. In the data we've been analyzing around GLP-1 years, we've seen certainly advantages in the frozen space, a lot more portion control and yield of protein, a lot more frozen appetizers and certainly a lot more nutrients for snacks. So that's a little bit of taste of the insights, what we see, what we think is important, our engine, our TECH engine to optimize this provocativeness in the marketplace. It drives everything we do, innovation, our channel strategies, our PPA, our marketing. It really is the heart of how Conagra works. So let's start to pivot and talk about our innovations coming. In today's world, it's harder than ever to break through and get consumers' attention. Consumers are distracted. They're looking at 2, 3 screens at a time. They're not seeing it. They're filtering out the advertising in the world, and they're focused on what they care about and what they're interested. Viral trends rise and fall in seconds on TikTok. And consumers today are really starting to experiment and getting their food in new ways. They're not even going to the store. They're seeing the recipe made on TikTok, not just a beautiful image, but how it's cooked and how it's prepared, and they're getting the option to buy those ingredients and ship them right to their house without ever visiting any e-commerce site of any kind. So you've got to get their attention to break through in this world. And you need iconic brands, like Conagra has many of. You've got to make sure, though, with those iconic brands that they're relevant. They have the right attributes, they have the right flavors. Consumers don't want you to sit still. They still expect you to modernize that part of the portfolio. But you need in surgent brands. You've got to create new brands to reach these new channels and these new customers that curate their assortment and don't carry the breadth of items that previous retailers used to. So you need both of these to be successful in today's world. And innovation for Conagra has been at the heart of our success for the last 8 years. We've driven well over $1 billion in sales in the last few years, and we're trying hard to make it even more impactful each year. It's not just about sheer number of items, it's about items that perform and will stay on the shelf or on the website for the long term. There's many pictures we have up here of what we think are provocative items that have reinvented some of these categories. I'm about to pivot and start showing you what we're looking forward to in the next year. I'm going to be moving pretty fast through this, but I think you could all agree based on what I just said with about the consumer, that's what they demand of us. There's been no more provocative brand in our portfolio than our MEGA lineup in Banquet. It's inspired by QSR flavors that are unbelievably impactful for younger generations, and it skews much younger than our other brands. But consumers want more. They want more satiation. And guess what, you're going to hear this for 5 days. They want more protein in their diets, right? And this example has 46 grams of protein to fill consumers up with the flavors they love. And when it comes to provocative solutions, you think about the chicken wars and all the attention in the media. We launched our MEGA Filets that brought that same great quality to your home on demand from your freezer, but done at a great value for you. We actually saved some money. And we're moving to the very next step in the chicken wars, which is our MEGA Tenders lineup. How do you do that even more provocative and safe? Well, you can't walk in a store or look at anything online without hearing about pickle craze. Everybody is talking about pickles and sour flavors. Sour flavors, by the way, are growing even faster than spicy flavors with younger generations. So we combined our Vlasic plan with our MEGA Filets to create really what we think is [ a different and ] a delicious taste [indiscernible]. And then what about breakfast? Our MEGA Breakfast Bowls deliver high grams of protein, 30 in every calorie -- 30 in every serving with absolutely delicious hot flavor that's convenient out of the microwave. And then Tennessee Pride has got a whole snacking size sandwiches smaller than a regular sandwich would be, which gives them a lot of versatility to fill a meal about 1 or 2 to be on-the-go, on the way to school or as a snack just to hold you over between meals. Marie Callender's is tapping into this need for value, right? Consumers value is 2 things. It's how much I spend, but it's also does everybody in the family love what they eat, right? And these meals are our famous delicious recipes in family-sized quantities that everyone, including the kids, will eat. And when you're trading down from restaurants, maybe you're grilling at home more, steaks and chicken. Why should you have to compromise on the sides that go with that? So Birds Eye launched a lineup of steakhouse sides that have that same delicious quality you might get from your favorite restaurant. And then how about getting more from your sides, right? People want their food to work harder to fit their lifestyles, and they want to get protein from as many foods as they can. So Birds Eye launched a lineup of protein sides, all the delicious flavors you would expect with significant amounts of protein. And P.F. Chang's Japanese-style Barbecue Crispy Chicken is tapping into the Japanese barbecue trend. Some of my favorite restaurants where I lived in Chicago are Japanese barbecue, where you get delicious tasting food that's delivered in a very provocative way also when you're cooking on your own. This taps into that trend, and it's great right out of the air fryer. And then Frontera Empanadas tap into this idea of I want more portable flavors, but I don't want to compromise. I want authentic [ Mexican ] and to be done the right way. And that's what Frontera is doing with our Spicy Chipotle Chicken bowl and a whole lineup of other great flavors, high protein with bold spicy flavors that the younger consumers are looking for. Evol has always been known for clean food done the right way. It's kind of the invention of the brand. So we're launching a line of no seed oil protein bowls with no artificial ingredients, as you would expect from Evol that have incredibly high levels of protein. We just shared these with our sales force at the national sales [ meeting ] a couple of weeks ago, and people went absolutely wild. This food is incredibly delicious. The next couple of [ slides ] are really for folks that are seeking more plant-based diets, not just veg and vegetarian, but folks that maybe are just trying to reduce a little bit of their meat intake. So Purple Carrot all have been about delicious taste, no compromise because it happens to be needed, right? It's all the famous flavors you would love in a convenient bowl. And then Gardein has been known for the best tasting imitation chicken in the category, right? It's all about deliciousness. And then we're taking that to a whole new -- with really a drive-thru style nugget that is made with no soy, as consumers continue to push the edges on what they expect from their food. Dolly's had a couple of record history the last couple of years. We've launched cheesecakes, cobblers and pies, and they've all been absolute stars with our customers and with consumers. But what about an everyday treat, something you can reward yourself after work. You don't always want a pie to share with others. You want a little treat for yourself while you're watching TV and taking a relaxing control on the couch in the evening on there. Of all the items I'm going to show you today, this is my personal favorite. These are unbelievable tasty and they're so convenient. And Marie Callender's Hand Pies, having these ideas I want a hot treat, but I don't have time to make it in the oven with the pie. So these are baked out of the microwave, 90 seconds. And the most amazing part is our chefs and our culinary team have developed this dough, so it's crispy and brown out of the microwave, just like you would get if you're in a restaurant. We partnered with the leading Indian chefs across North America to develop a lineup of Marigold frozen meals, authentic Indian flavors, absolutely delicious with the convenience from the microwave, and a lineup of sauces to give folks a quick head start if you're feeling like cooking from scratch. Another new brand. Sweetwood Ranch. Our sliders just launched during the Super Bowl. So just a few weeks ago, we launched these items. They taste just like you would get from your favorite pub at the street. They're out of the microwave, unbelievably delicious. It's been such a hit with our customers and with our consumers that we're really enthusiastic about what new brands can do to bring excitement and provocativeness to the category. The next few items I'm going to show you are all from our Meat Sticks portfolio. We've got multiple brands to reach different consumers. The Meat Snack category has been growing at unbelievably rapid rates, double digits as consumers shift from traditional snacks into more nutrient-dense content. And this -- our Cheese Mode is pairing up the 2 most famous snacks, right? Everybody loves to have cheese and meat together, but wouldn't it be amazing if it was at one convenient stick. I announced here at CAGNY last year, our partnership with Buffalo Wild Wings to build bold new flavors to drive excitement in the category. It's been a real hit for us. And of course, we're launching a new flavor, honey barbecue and in short sticks that are perfect for lunch box. Duke's grass-fed beef. Duke's has been known for craft and quality since we've acquired the company, really delicious. And these are made with bone broth to infuse even more protein into every serving. Our FATTY acquisition happened a little over a year ago. Since we bought the company, we've doubled the size. We're getting new distribution, launching new flavors and sizes across channels. It's been incredibly shaping the category and the category for this number is consumer desire for cleaner food done better. Bigs has always been known for the best flavors in seeds, but young consumers want even more. Not just the regular flavors aren't enough. So we're launching a triple blast seeds lineup with really provocative flavors like Pickle Ranch or Spicy Sweet Chili. Angie's BOOMCHICKAPOP popcorn is tapping in the cinnamon churro craze that's pretty much everywhere, I think churros whether it's at the state fair or it's at my favorite food truck. And then Angie's has always been about popcorn and done right. So we're building a solution that's made with avocado oil, also no seed oil and done all the right ways with absolutely delicious taste. My wife's from Texas. We've moved all over the country. We've always had a hidden case of Dr Pepper in the fridge. She can't get by without it. And she was absolutely thrilled when I told that we're bringing Dr Pepper to the snacking category with a portable, delicious that iconic Dr Pepper taste, the #2 soda brand now in the world. And how do I get more from my snacks, right? They have to be delicious, yes, but I want them to be functional and deliver to my diet. So we've developed a line of Snack Pack Protein. And our Snack Pack Splash is all about no artificial colors, no added sugars, all made from real delicious fruit. America's favorite blonde is Dolly Parton. So we've teamed up with what seems -- may seem obvious to everyone that we're launching a line of Dolly Parton Blondie Bars for the baking category. I grew up watching Peanuts. It's one of my favorite memories as a kid, and so did my kids and really their generation loves Peanuts. It's kind of timeless. And we've teamed up with them to develop a line of baking mixes, some of the iconic names and flavors like Peppermint Patty and Charlie Brown-ie. And Sean mentioned Rebel Roots. So this is really tapping into this tallow fat craze. Tallow fat has been on fire in terms of growth because people want it done the right way. They don't want the seed oils and they want that delicious taste that everybody [ fries ]. So this is our brand lineup for Rebel Roots Tallow Snacks Fries. P.F. Chang's is delivering delicious Chinese barbecue that's perfect as a topping or an ingredient. Stubb's is known for authentic Texas barbecue. We've developed a lineup of sides using their famous flavors. And our Wendy's Chili has been a home run that's really premiumized and turned around the chili category. So what's is more iconic than their Baconator flavor, and we're combining that into Wendy's Chili. That's just a taste of the provocative innovation we're launching. But you've got to break through in today's marketplace and get people's attention, right? So how do you do that, right? You've got to win in-store, right? You got to show up and kind of disrupt people in their shopping patterns. You've got to win online and get their attention and make sure you show up on all the relevant searches. You've got to have the right sizes, right, for any format, whether that's large formats and club sizes, but you've got to have small format for immediate consumption, especially if you're in the Snacks business. And you've got to make sure your promotions are working hard to solve problems in people's lives. So as people are centered and focused on value, you've got to make sure they get affordable solutions and they realize that your products really solve this need in their lives. We've been partnering with Palantir to develop an optimization tool that helps us allocate all of our promotional dollars, and it's helping us drive even larger lifts. And you've got to be provocative in retail, tap into cultural moments, disrupt people with displays in the store and then create brand relevance. So young consumers are talking about your products online. And our whole strategy is about meeting consumers where they're at, right? They may be on different platforms. Older consumers may be watching streaming, television or linear TV, and younger consumers like my kids are on YouTube and TikTok. You've got to create content that breaks through and catches their attention. Let's see what that looks like with the video. [Presentation]

Love there, Dolly Parton. She really is a handful, really amazing. So how do you know if this SRP approach, driving the superior relative provocativeness is working in the marketplace, right? It's a slow growth world. We think the best measure of our success in this is are we holding or gaining share in our categories. Are we getting consumers attention, right? And for Conagra for the last few years, that's really been our recipe. It's really driving results, while keeping consumers engaged. I've shared with you a little bit of our whole process and kind of how it works for us to create these solutions that are provocative. But what does it mean in the results? Let's bring up David Marberger, our CFO, to talk about that.

Thank you, Bob. Good morning, everybody. It was good to see some of you last night. I'm going to start with a brief summary of how we're positioned to finish fiscal '26. We expect our top line momentum to continue, building off of the momentum we saw as we exited Q2. We're delivering on our supply chain commitments. Our service levels are on plan and our cash savings program is on target. We continue to be very focused on cash flow. You saw yesterday, we had a press release that said we're taking our free cash flow conversion up this year. And we continue to deploy capital in a balanced and disciplined way. All of this serves as the foundation for driving growth. Sean talked about how we continue to build momentum across the portfolio with sequential improvement in our volume sales and our dollar sales for all the periods shown. And 75% of our Frozen and Snacks portfolio is holding or gaining share in the last 13 weeks. Pivoting to supply chain. Our top priority this year was to restore our service levels after supply disruptions last year, and we've done that. Year-to-date, our service levels are over 98%. And we continue to progress with our cost savings programs. This year, we're forecasting 5% cost savings as a percentage of cost of goods sold, 1% of that coming from tariff mitigation. When we look long term, we expect to deliver about 4% cost savings annually. We are relentlessly focused on cash flow at Conagra. In fact, free cash flow is a metric in our annual incentive plan that affects all employees in the company. The last 3 years, our cash flow has been very strong, driven by reduction in inventory, driven by an improved efficiency and conversion for Ardent Mills, our important joint venture, and improved cash tax efficiency. As I just mentioned, we're now forecasting 100% cash flow conversion for this year, putting our 3-year average at 115%, which is industry-leading. We are focused on 90% or better free cash flow conversion annually going forward. So this free cash flow forms the foundation of our balanced approach to capital allocation. If we operate at a 90% free cash flow conversion, we can invest in the business, we can pay down debt, and we can maintain our strong dividend. We have been very clear that our priority is to strengthen our balance sheet and maintain our investment-grade credit rating as we target 3x leverage. And this illustrates how we've deployed capital over the last 12 months. Paying down debt is our priority. And you can see the biggest usage of cash the last 12 months has been paying down debt. But we've also been investing in the business. In fact, we've increased our CapEx to support growth and productivity projects, and we're continuing to allocate attractive returns to our shareholders with our dividend. You can see on the right side of the chart that capital return to shareholders as a percentage of net income for Conagra is 74% and in line with the peer companies. So as we announced yesterday, we're reaffirming our guidance for fiscal '26. We expect organic net sales in the range of minus 1% to plus 1% versus fiscal '25. We expect adjusted operating margin in the range of 11% to 11.5%, and adjusted EPS in the range of $1.70 to $1.85. So as we look towards fiscal '27, our focus is clear. Now we are not giving fiscal '27 guidance today, but we expect our top line momentum to continue. We see opportunities for margin recovery with a continuation of our productivity and a normalization of inflation. We expect our free cash flow strength will continue next year. And we expect Project Catalyst will be the enabler to modernize how we work at Conagra. So let me spend another minute on Project Catalyst. Sorry, I forgot lost my train of thought. So catalyst -- so Project Catalyst is a multiyear effort focused on going to drive -- we expect it to be accretive to revenue, be accretive to profit margin and be accretive to cash flow. We've been investing in technology and in data foundation for years. We have one ERP platform globally, which not many companies can say. And we've been investing in our data foundation since Sean has been the CEO here. So we look at Catalyst being able to leverage that in order to leverage today's AI capabilities so that we can drive this financial performance. So we have a multiyear effort starting with senior leadership involved looking at our work processes end-to-end to see how we can leverage AI to drive performance. So we will provide more color on this when we give fiscal '27 guidance in our Q4 earnings. Today, we're affirming that our long-term algorithm remains unchanged. We're confident that we can deliver the financial performance that's summarized in this algorithm. And in conclusion, you heard Sean talk about how Conagra is well positioned to navigate change in this incredibly dynamic environment. You heard Bob talk about superior relative provocativeness as a framework to win in the marketplace. And with that, we believe we're well positioned to deliver on the financial metrics we talked about today. That concludes our presentation. We're now going to go to the breakout room for Q&A.