ConAgra Foods, Inc. (NYSE:CAG) Q4 2020 Earnings Conference Call - Final Transcript

Jun 30, 2020 • 09:30 am ET

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ConAgra Foods, Inc. (NYSE:CAG) Q4 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Andrew Lazar with Barclays. Please go ahead.

Analyst
Andrew Lazar

Good morning, everybody.

Executive
Sean Connolly

Hi, Andrew, good morning.

Analyst
Andrew Lazar

I wanted to start off, if I could, with the Company's reaffirmation of its fiscal '22 targets. Specifically, while I understand certainly the rationale for perhaps not yet providing full fiscal year '21 guidance, the fact that you're comfortable reiterating fiscal '22 EPS means at least to me that there should be some good progress in '21 versus '20 to be able to achieve '22 guidance in a reasonable way where I guess not all of the EPS growth needs to come in in '22 versus '21, if you see what I'm saying. So any perspective you can add around that, whether I'm thinking about that in the right way, even though I understand not providing specific guidance for this fiscal year?

Executive
Sean Connolly

Yeah, sure. Andrew, here is how I think about this. Clearly, since nobody can accurately predict what will happen with COVID and the range of outcomes is very wide, calling '21 with any accuracy is virtually impossible. But when you step back and you look at where we landed in '20, if you look at the momentum of the business, the continued elevated demand, the new triers, the very strong repeat and synergies remaining on track, our view is that it would be hard to argue that we're not on a path to the '22 targets.

And the real question for us as kind of you think about our prepared remarks today on trial and repeat is whether these dynamics that we're seeing currently offer incremental long-term upside beyond our '22 algorithm. Obviously, we're not going to comment on a longer-term algorithm. But certainly, these are positive markers, and we have elected to invest behind that option, for lack of a better phrase.

Analyst
Andrew Lazar

That's helpful. And it's a good segue into my follow-up, which is -- certainly appreciate all of the data and the metrics on trial, household penetration, repeat rates and the like. And of course, none of us have a crystal ball regarding where consumption and growth rates for many of your key categories ultimately settle out. But in light I guess of the metrics you've discussed, I mean, would it be your expectation that for some of your key categories, Conagra should see an elevated rate of growth versus let's say, pre-COVID, for a more prolonged period of time? The investments that you discussed on the call with respect to incremental capacity and such would seem to support that thought process, but again wanted to hear it from you and get some clarity.

Executive
Sean Connolly

Yeah, I think the phrase I used earlier was, we see this as a unique window. Something is happening that is above and beyond what our normal marketing programs would do. COVID has introduced this dynamic where, as you saw in the slides earlier, consumers are legitimately rediscovering certain things in their house, whether it's their kitchens, their freezers, being together, and