Conagra Brands (CAG) Q3 2023 Earnings Call Transcript

For the period ending February, 2023

April 5, 2023 9:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Conagra Brands Third Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note today's event is being recorded.

I would now like to turn the conference over to Melissa Napier, Head of Investor Relations. Please go ahead.

Melissa Napier

Good morning. Thanks for joining us for the Conagra Brands' third quarter and first nine months of fiscal 2023 earnings call. I'm here with Sean Connolly, our CEO; and Dave Marberger, our CFO, who will discuss our business performance. We'll take your questions when our prepared remarks conclude.

On today's call, we will be making some forward-looking statements. And while we are making these statements in good faith, we do not have any guarantees about the results we will achieve. Descriptions of our risk factors are included in the documents we filed with the SEC.

We will also be discussing some non-GAAP financial measures. These non-GAAP and adjusted numbers refer to measures that exclude items management believes impacts the comparability for the period referenced. Please see the earnings release for additional information on our comparability items. The GAAP to non-GAAP reconciliations can be found in the earnings press release and the slides that we'll be reviewing on today's call, both of which can be found in the Investor Relations section of our website.

And I'll now turn the call over to Sean.

Sean Connolly

Thanks, Melissa. Good morning, everyone, and thank you for joining our third quarter fiscal '23 earnings call. Slide 5 outlines what we'd like you to take away from today's call. Our top priority coming into fiscal year 2023 was margin recovery following the unprecedented environment of the last two years with COVID and the inflation super cycle.

To facilitate that margin recovery, our focus has been on inflation-justified pricing, supply chain improvements and the pruning of low-margin volume, a strategy we have successfully deployed before and refer to as value over volume. And three of the way into the year, our plan is working.

In Q3, we delivered our second consecutive quarter of strong gross margin recovery, our pricing execution continued to be excellent while elasticities remain muted and consistent. Our volume performance again led our near-end peers versus our pre-pandemic baseline and our supply chain continued to improve with service levels exceeding 90%.