Good morning and welcome to the ConAgra Brands First Quarter of Fiscal Year 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator instructions]. Please note this event is being recorded. I would now like to turn the conference over to Brian Kearney, Director of Investor Relations. Please go ahead, Sir.

Good morning, everyone. During today's remarks, we will make some forward-looking statements. While we are making those statements in good faith and are confident about our company's direction, we do not have any guarantee about the results that we will achieve. So, if you would like to learn more about the risks and factors that could influence and impact our expected results, perhaps materially, we refer you to the documents we filed with the SEC, which include cautionary language. Also, we will be discussing some non-GAAP financial measures during the call today. The reconciliations of those measures to the most directly comparable GAAP measures for regulation G compliance can be found in either of the earnings press release or in the earnings slides, both of which can be found on our website at ConAgrabrands.com/investor-relations. Now, I’ll turn it over to Sean.

Thanks, Brian. Good morning, everyone, and thank you for joining our first quarter fiscal 2018 earnings conference call. We delivered strong results in Q1 and are pleased with our start to the year. Before I get into the details of the quarter, let me take a step back and provide our perspective on the overall environment and how we are approaching the opportunities that lie ahead. Roughly 2.5 years ago, we saw the need to take bold actions to address internal challenges that we faced as a company, as well as the rapidly changing dynamics in the market. We set out an aggressive plan to strengthen our foundation and build the necessary capabilities to enable us to drive growth into the future. As we’ve discussed, we took a number of actions on this front, including reenergizing our culture and organization, reducing our cost base, and rebuilding our growth capabilities to reshape ConAgra Brands into a focused, higher margin, more contemporary and ultimately higher performing company. Our goal was not only to maximize shareholder value, but also to do a better job for our consumers and our customers by way of stronger brands. It's unmistakable that today, ConAgra is better positioned to drive value creation. Becoming a pure play branded CPG company has enabled us to zero in on the critical elements necessary to improve performance. We've shifted our focus to value and a strategy based on renewed brand relevancy. We've been aggressive around SKU optimization, we’ve become more disciplined around our A&P support and we continue to strengthen our innovation capabilities, as reflected by the new products that we are currently bringing to market. We have a deep commitment to operating with a leaner approach, and as you have seen, our margins are far stronger. By relentlessly following the portfolio…

Thank you, Sean, and good morning, everyone. Before I start, I want to review our basis of presentation. Lamb Weston and the related joint ventures were reclassified as discontinued operations in the second quarter of fiscal 2017. The commercial reporting segment only includes the historical results for the Spicetec and JM Swank businesses, which we divested in the first quarter of fiscal year 2017. References to adjusted items, including organic net sales, refer to measures that exclude items impacting comparability. These items are reconciled to the closest GAAP measures and tables included in the earnings release and presentation deck. Please see the press release for additional information on our comparability items. Moving on to our results, you can see on Slide 20, that we continue to make strong progress improving our financial profile as we reshape our portfolio. Reported net sales for the first quarter were down 4.8%, and organic net sales were down 3%, reflecting sequential improvement against our fiscal 2017 organic net sales growth rate of minus 5.5%. As a reminder, starting in fiscal 2018, organic net sales excludes the impact of FX, divestitures, and acquisitions until the anniversary date of the transaction. Adjusted gross profit dollars were down 4% for the quarter. The decline was driven by lower volume, higher than anticipated inflation, the Spicetec and Swank divestitures, and increased slotting investment to support Q1 innovation. These were partially offset by improvements in price mix and supply chain realized productivity. Adjusted gross margin was 29.2% in the quarter, an increase of 26 basis points year-over-year. Improvements in price mix, realized productivity, and margin accretion from the divestitures offset the impacts of slotting, inflation, and FX. Inflation came in at 4.4% of total cost of goods sold for the quarter, driven mostly by increases in proteins, peanuts, and…

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. To provide equal opportunity to all parties, we ask that you limit your questions to one and a single follow-up. [Operator instructions] And our first question will come from Andrew Lazar of Barclays. Please go ahead.

Good morning, everybody.

Hey Andrew. Good morning.

Good morning. First question would be in the refrigerated frozen space, obviously you noted positive year-over-year volume. And I'm just trying to get a sense of how you feel -- what you are thinking about the sustainability of that? And I guess the question is, do we -- should we expect that we trade volume down a little bit and pricing up a bit as trade spend ramps down as we go forward? Or would you anticipate that sort of positive volume track to continue to go through the fiscal year?

Sure, Andrew. Let me start that and, Tom, if I miss anything, you can round it out here. I think we're just getting started on frozen. You're seeing positive results from us overall, but I think that one slide I put up was pretty important, which shows we moved into positive territory, really on the back of improved velocities. We still have not yet turned the corner into positive territory in terms of total points of distribution. So, as I look forward and I think about maintaining positive velocities, but also linking that up with a move out of declining total points of distribution into positive net gains of total points of distribution, our results should get stronger. So, we're off to a bit of a better start than we expected. Frankly, we are just getting warmed up. If you [indiscernible] out of the quarter and you think about the frozen section in general, as I've been saying for several years now, the entire space is ready for massive innovation and overhaul and so I think what you're seeing is the early days of the opportunity that I see in this frozen space and we feel like we're leading the way.

All right. Thanks for that. And then that kind of leads into the next question, which is the overall, I guess renaissance we're seeing in some of the growth that's being put up in the frozen space overall. It's true that you and the other players are obviously innovating in a bigger way. I'm trying to get a sense, do you think that’s -- I don't want to say that that was easy, but, was all it took was the major players to sort of get on board with improving the quality of the food and all of that? And it really ultimately never had anything to do with the frozen states or the temperature state, if you will, and it was just about giving, making this more relevant or is part of this -- what was recession-related for a period of time, where individual frozen meals were out of favor for families looking to -- on a budget? I'm trying to again a sense of what is leading to this renaissance a bit and again, with an eye towards the sustainability of it.

Andrew, let me -- I think this is a really important point, because our view here is that a lot of what you saw in frozen was self-inflicted. I can take that even to broader food and big food to be specific. There's been, as I mentioned in my prepared remarks, a lot of pessimism out there. And I think our attitude is, look, these are dynamic times, no doubt. But, it seems to me that the notion that the sky is falling is a bit too much, isn't it? I mean, we view it as our job to navigate change in a way that sustains our competitiveness, continues to mine new opportunities and create value and we feel like we are doing that. The good news is we are two and a half years into this. So, we’re not just getting started. And the place we are farthest along is frozen. Now we have got to turn our attention and do similar things in other areas where we see growth opportunities within our portfolio, as an example, snacking where you see we have been active, particularly in M&A in the last year.

The next question will come from Ken Goldman of JPMorgan. Please go ahead.

Hi. Thanks very much. Two from me, if I can. And I apologize if I missed this first one, but there's a lot going on this morning. Is there anything unusual in terms of comparisons with last year, investments, et cetera, that we should be aware of in the second quarter in particular? I know you have given guidance on the first half and the timing and the cadence and all that. I just want to make sure we’re not missing anything as we model this out a little bit. Because I know that some people were maybe overlooking the last quarter of the slotting fees a little bit.

Yeah, Ken, let me take that first and then, Sean, you can build on it. If you look at this quarter, Ken, and you look at our gross margin, there were a lot of moving pieces to this, right? So, if you look at our overall gross margin improvement, about 30 basis points, you had slotting, which was negative impact of about 35 basis points. You had FX, which actually negatively impacted gross margin about 20 basis points and then you had the favorable impact of divesting Spicetec and Swank, which was about 50 basis points positive. So, if you look at those three things, they kind of net out, right? And we have now finally wrapped on the divestiture. So, to your question, Q2, that will no longer be there. So now you are just down to in Q1, the price mix benefit on gross margin was about 130 basis points positive, but the net inflation costs was about 110 basis points of a headwind getting to our 26-basis points improvement. So, I look at that has since our inflation, we expect to be similar in Q2, that sort of relationship should move to Q2. We still will have some incremental slotting in the second quarter, because some of our products are in Q2 as well, with our banquet products. So, there will be some incremental slotting in the second quarter as well. So, that's why we talked about the first half, there being most of the incremental slotting. So, hopefully that was able to paint a picture, but that's how I see the second quarter kind of flowing out.

That's very helpful. Thank you. And then, Sean, coming out of Andrew Lazar's recent conference, I still refuse to call it anything other than back to school, Andrew, but, some people came away from their conversations with you feeling like maybe you were signaling a little bit that you are willing to take on a deal that's not necessarily accretive year one, or maybe it'll take some time to build accretion. Maybe preparing people for a bigger deal that might cost a little more than what they thought. Is that a fair takeaway? Were people coming out of that with the right attitude? Or maybe I wasn't there, obviously. Were people misreading some of the signals you were sending?

Well, what I can tell you, Ken is I don't think I said those things but it's -- there are obviously always different interpretations of what I say. So, let me try to clarify how I think about larger M&A. We think about it, number one, in terms of does it fit strategically? Does it help us become a company that delivers stronger returns for the long haul? And, obviously, we have to really sharpen our pencils in terms of what kind of synergies we can get, so we can understand the cadence of the returns that we can get. And then, ultimately, once we’ve done those things, it comes down to is the deal reasonably valued? And is the deal actionable? And when those things fall into place, we are prepared to move. And as you can see from our balance sheet, we have got the fire power to do something of some scale. That doesn't foreshadow specific-- any specific actions because obviously we don't have anything to report. But, as I mentioned in my prepared remarks, we are always on the lookout for those key success criteria of ours aligning. And if we have something to report, you guys will be the first to find out.

And the next question will be from Alexia Howard of Bernstein. Please go ahead.

Good morning, everyone.

Hi Alexia. Good morning.

Hi. So, can I ask about the drivers of the margin expansion from here? It looks as though there was a bit of slowdown on the gross margin side, which I understand was largely to do with slotting, but it is a slowdown from what we saw in fiscal '17. Clearly the SG&A is still experiencing quite a bit of cost cutting in there as well. Can you just give us more of a qualitative description as things play out during fiscal 2018, how you expect the drivers of those margin trends to shape things? Thank you.

Sure. Let me talk about gross margins holistically for our company, because I think it's an important part of our story. We were very clear a couple of years ago that we lagged the industry materially in gross margin, where the industry was roughly at 36. We set a 2020 goal of getting our company to 32. We are squarely on track to achieve that goal. We reiterated that guidance today. We have made tremendous progress in the last few years, putting 500 basis points or so of gross margin on there. Back at our Investor Day, we articulated that the year-on-year progress would slow down, and for obvious reasons, but I think going forward, we have no doubt we can continue to chip away at our gross margin performance. And when you think about the drivers of gross margin, to your question, as I have outlined previously, we actually pursue quite an array of drivers, everything from pricing, improved pricing capabilities, trade efficiency, productivity in our supply chain, channel mix, brand mix, all of these things, margin accretive innovation, all of these things are central pieces of our gross margin expansion agenda. So, these are all things we are working. The only other thing I will make the point of, again, is that there will be some volatility in gross margin expansion quarter to quarter, based on any number of factors. It could be that we have got more slotting in a particular quarter and less slotting in another quarter. It could be that we are in the early days of a shift from a deflationary environment into an inflationary environment. So, we experience inflation in cogs and haven’t yet gotten pricing into the marketplace. These are transitory dynamics. I don't get too caught up in those and it's why I talk about us being focused on moving the center line of our profitability north over time and trying to reduce that standard deviation around the center line by each year as we get better in terms of operating the company.

Great. And on the grocery and snacks business, the volume declines seemed to pick up again this quarter. They were a little better last time. It looks as though you are pulling back on ineffective promotional activity, which makes sense, but how do you walk the tightrope between the volume declines, the promotional activity, and profitability? Are you going to just keep current course and speed for the time being?

Yeah, let me talk about that. Dave made some important color commentary remarks in his comments earlier about this, which is that a lot of what you saw leading to that total grocery and snacks decline in the first quarter was really isolated to the first period. And we did literally have a handful of brands in the first period where a year ago we had very aggressive deep discounting that had been long negotiated in advance with customers. So, you may recall last year I mentioned that with some of these customer deals, you lock in up to 18 months out. So we had some of those remnant deals in there, in particular in period one, on a number of our grocery businesses we had those. So, keep in mind, big picture, we are farther along in grocery and refrigerated. We are working aggressively now in other parts of the portfolio. Grocery is one of those. So, it makes sense for us to get these deep discount deals out of the -- out of the cadence of how we run the railroad here. It creates the wrong consumer impression about our brands. So, you can see, in frozen, as we’ve done that, we are starting to recondition the shopper to think about our brands fundamentally differently, enhanced by more modern, more premium innovation. You may not see the same level of intensity in our grocery and snack business overall. You will see us pick our spots. But you will see us back away from some of these legacy practices still. And we did that in period one and we saw material improvements in trends after we got through period one, moving into Q2.

And the next question will be from Matthew Grainger of Morgan Stanley. Please go ahead.

Hi, good morning. Thanks for the questions. I just wanted to come back to the uptick in inflation guidance. For the full year, it's still within the range that you can deal with using productivity, but on some of the selected commodities you mentioned. Can you talk about the balance between offsetting that inflation through selective price increases along with positive mix and restaging? And to the extent you are having conversations with retailers about pricing in the current environment, how those are going?

Sure, Matt. Let me take that and, Dave, if I miss anything, please chime in. We are taking pricing in the current environment. We are experiencing inflation and, as you might imagine with a portfolio as diverse as ours, it does not apply equally to each and every brand. So, if you consider peanut butter as an example, that's a product where it's obvious to everybody that the key commodity input was inflationary. We took price. Frankly, we have seen others in the category take price and the customer is aware of that as well. So, we have been taking price. But our overall efforts to manage margin, as I just mentioned to Alexia, is more than price. It's all of those levers I just talked about. But we are taking price. We are very clear eyed with our customers about our need to do that. And frankly, our relationship with our customers, in my judgment, since I have been here anyway, has never been better, because our customers are keenly aware that the ConAgra portfolio has a vast number of choices that offer exceedingly good value. What our customers really wanted from us is to see these iconic brands to get into the modern era, to see better food quality, to see modern food attributes, and in many cases to see their own customer margins begin to grow again, because they have been compressed for so long as the company had so many brands that were locked into these exceedingly low-price points. So, we have been highly aligned with our customers and, frankly, now the conversation with our customers is all about innovation. And the question we keep hearing is what's next?

Okay. Great. Thanks, Sean. And then just on a separate topic. I mean, none of us really know if or when or how tax reform is going to happen, but just from a -- I'm sure you are going through scenario planning related to outcomes that might occur over the next 12 to 18 months. And the big question is sort of if corporate tax rates do get lowered, how much of that do you consider taking through to the bottom line to free cash flow? How much of it gets reinvested in a more accelerated way in the P&L? I guess just any -- I know it's a bit speculative right now, but any thoughts you can share on that?

Yeah, Matt. So, obviously we have been looking at this. This week, the bipartisan proposal came out. But it's really important that we understand the details, right? More specifics around the corporate tax rate reduction, any limitations on certain deductions which would obviously impact us. But generally speaking, I think the legislation should benefit companies that have a higher percentage of their business in the U.S., which would be us. So, we're looking at it. In terms of if there is corporate tax reduction, and there's more cash, we bounce back to our capital allocation, right? In our balanced capital allocation, where -- what do we do with our money and we're looking at our debt. We are looking at share repurchase. We are looking at acquisitions and then investment in the organic business. So, that won't change. And we'll see how it all plays out.

Your next questions will come from Robert Moskow of Credit Suisse. Please go ahead. Mr. Moscow, your line is open. You may be muted on your side, sir. Hearing no response, we will move on to the next question from Jason English of Goldman Sachs. Please go ahead.

Hey, good morning, guys. Thank you very much for the questions. Like others, I’ve got two. First, coming back to the inflation backdrop, it's edged up higher on you and quick back of the envelope math suggests it’s, at these rates, it's about a 40-basis point headwind to full year operating margins. But you’re holding operating margins. So, quick question, what are the offsets? How are you successfully offsetting that more onerous inflation outlook?

Well, Jason, here again there's a lot of moving pieces here, right? So, obviously inflation ticked up. But, Sean talked about it. The one element is all the different aspects of price mix, right? So, list price increases, trade efficiency, mix, margin accretive innovation and just accelerating that and continuing to look at how that will flow out for the remainder of the year. We did not give a specific guidance on gross margin in the year, but we did for operating margin. So that obviously, A&P and SG&A impacts that. If you look at SG&A for the first quarter, we were down about $19 million. About half of that decrease was timing and half were real decreases based on costs we had in the prior quarter. So, we continue to look at SG&A and manage that and eliminate unnecessary costs. And we feel good about the progress there. So, when you take everything together with the pricing and how that flows out, the realized productivity that the supply chain is continuing to deliver, which is on track, and then our focus on SG&A. We still feel comfortable with the operating margin guidance.

That's helpful. Thank you. And then the second question comes back to the grocery and snacking business. First, congratulations on refrigerated and frozen and how you successfully bent the trend there. It's encouraging to see. Is it fair to draw some parallels between the initiatives that you have effectively deployed there and the initiatives that are coming on grocery and snacks? And if so, can you give us some color in terms of what any we may stand in, in grocery and stacks, relative to frozen. And really what I'm trying to get at is, A reason to believe you can do the same with groceries and snacks, and B; some sense of what a reasonable timing expectation to see that trend really bend on the forward.

Great question, Jason. Let me tackle that. I think the overarching thing is we don't have to do exactly the same thing in every segment that we have. We’re managing a total portfolio as a single cohort and really pushing growth where it makes sense to push growth. So, if you go back to our investor day and we talked about our portfolio segmentation model, we’ve got clear growers, we’ve got businesses that can move into adjacencies, we’ve got iconic brands that can be reinvigorated, and we have a lot of businesses that we call reliable contributors in the portfolio. Overall, big picture, we see lots more opportunity from here. We are innovating on our growth brands in growing categories. They skew disproportionately to frozen and refrigerated relative to, say, center store grocery. But we are also investing to bolster reliable contributors. Because reliable contributors contribute cash. Our growth brands which are in all parts of our portfolio use more of that cash and offer more top line. So, this is a fly wheel type operation that we have got moving in the right direction and we think we can accelerate it further from here. There are growth pockets, clearly, within grocery and snacks, some in grocery, some in, clearly, obviously in our snacks business. But there are also plenty of reliable contributors in that grocery business that are very high margin, high cash flow, and we just have not really renovated them yet and modernized them. So, that’s -- We will do that. Those businesses, some of them may not -- Chef Boyardee is an example -- we may not look at Chef as needing to become a growth engine, but it does need to reliably contribute because it's big. It's in tens of millions of households, it’s high margin-high cash flow, and it provides a lot of fuel for growth both in other parts of grocery and snacks and in frozen.

And your next questions will be from David Driscoll of Citi research. Please go ahead.

Great. Thank you and good morning.

Good morning.

I wanted to ask a little bit more about frozen. Sean, you called it out as the piece that you really think that people should be focusing on as kind of, maybe, the early proof, in terms of your tea leaf plans and evidence and proof that things are turning. Can you just talk a little bit more about what's going well with the innovation that's hit the market? And I say sometimes I think about it between core brands that are seeing innovation, and then flat out new brands that you are introducing to the market. And I think there's different risk profiles with these. And then just a second related point to this, you showed five-week data that was up 6.7%, and is this the type of growth that you have expected going forward or does it get even better as the advertising kicks in?

Yeah, sure, David. Let me try to tackle that. Frozen is -- we talked earlier-- it’s an opportunity and it's an opportunity and for all the reasons we discussed. And in the early success that we are seeing, I think it's a function of the fact that these products are really good. They are clean label. They are on trend. They taste fantastic. They are in unique packaging. So, many of you got the chance to see some of this stuff at Cagney and its very impressive innovation. But I think one of the things I'm most encouraged by in the very early data we see is the incrementality that we are seeing in some of our customers' data in terms of new purchases into the frozen section, new shoppers into the frozen section. To me, that's the big opportunity here because if you look at millennials as an example, who historically didn’t shop the frozen section. Well, think about it, millennials are living paycheck to paycheck. Perhaps one of the biggest single areas of waste in millennial budgets are the food that parishes in their refrigerator because they have been accustomed to buying refrigerated. We can deliver the equal quality product at better prices, but frozen so it’s not in a state where it’s going to perish and it won't lead to a wasted household balance sheet. So, that's a big opportunity and I think that's one of the key metrics that I want to see more of, along with the fact that we are taking legacy icon brands like Healthy Choice and we’re completely changing the way they show up, so that they suddenly have strong appeal, not to Boomers but to Millennials. So, that's part of keeping brands, legacy brands fresh for the long run. In terms of the balance between iconic legacy brand and start-up brands, as you can tell, by our portfolio, we have both and we think they both play a role. But in terms of what pays the bills, it's icon brands that have modern food attributes, that's where you drive velocity. And that frozen section in a customer’s operation is a true meritocracy business. And you have to ultimately drive velocity in order to perform and we’re seeing that with the icon brands that we’ve renovated. Going forward, yes, trends could strengthen from here. We’ve got -- obviously we are in the trial phase now. So as new products hit the marketplace, we will go from a trial phase to a repeat phase but we are also on a situation where we still are down in terms of net total points of distribution. So as that goes from negative territory to positive territory, that should only help. So, we are not guiding by segment or even by sub segment with frozen single serve meals, but obviously this is going in the right direction.

Thanks for the comments.

The next question will come from Bryan Spillane of Bank of America. Please go ahead.

Hey, good morning, everyone.

Hi, Bryan.

So, I guess, my question is just around the sort of retailer appetite for promotional intensity and -- and even private label. We just hear that theme a lot from investors and, Sean, I guess my question is; as you have gone through the process of eliminating some of the really deep promotions and some of the highly promoted volume, have retailers reached out to try to just promote a different brand or, as you are pulling back on those promotions, are they also sort of looking to pull back on the promotional intensity in some of these categories?

Well, I -- we have received that question a number of times and I think overall, we have not been pressured to lower our prices or dial up the intensity of our promotion, and maybe that's in part because we already have so many brands that offer a tremendous value. I think your point is right, that retailers and manufacturers alike are hungry for improved growth, and the real question is; how do you get there? Now, the default position, and a lot of people I talked to, as well, it must be lower prices but when you actually look at the data, at least within the branded space, a lot of times -- most times, it is not the lowest priced stuff that is actually growing. It's the more premium, more innovative up to date stuff that's growing, and that's really what we are doing with our portfolio. But I think bigger overall point here is that the thing that is going to spur growth, in our mind, is innovation, which is consistent with our belief that the consumer's calculus on what drives value, and their value assessment is much more comprehensive than price alone. And the conversations we have with respect to our portfolio, with our retailers, really align with that.

All right, thank you. And if I could sneak one more in, just related to the inflation going up a little bit. Are we now -- how much of your commodity cost exposure is locked in for the year or is there potential that it could move one way or another some more as we move through the balance of the fiscal year? Thank you.

Yeah, we don’t -- that really varies by commodity. The area with the animal proteins where we have been impacted, that really doesn't lend itself to locking in as much. So, obviously, we buy forward, but -- so that's really where we were hit the most along with some of the packaging and Sean mentioned the peanuts. So, we feel we have the best estimate right now, based on all the information we have and we feel good with the estimate at this time. So, Sean, anything to add?

No. I think you got it.

The next question comes will come from Akshay Jagdale of Jeffries. Please go ahead.

Hi, good morning, this is actually [Luby] filling in for Akshay. I wanted to just clarify your comments on your sales growth expectations. I think you mentioned in your prepared remarks that you expect to see net gains in the back half of the year. Is that correct? I wasn't sure if you were referring to the overall portfolio. And will you have fully lapped all of the SKU reductions by the second half? That's my first question.

Yes, Luby, the net gain comment was with respect to total points of distribution. So, as you think about -- and when I think about the positive net gains versus negative net gains, it's just a net of the stuff we pulled out versus the stuff we have put in. Is it net it positive territory or negative territory. So, obviously last year, we did all takeaways out of the marketplace with SKU rationalization. In Q1, we’ve had more takeaways than we’ve had infusion in. And that’s going to shift as you see some of our SKU rationalization work abate and you see the new products hit the marketplace. So, you’ll see those total distribution points move more towards the positive territory as we move through the second quarter and the second half.

That's helpful, thanks. And then I just wanted to ask a question on the Angie's acquisition. So, I think you mentioned $100 million in annual net sales. On our math, we are getting to something in the region of $7 million in EBITDA, which seems pretty low. So, I guess, first question, is that sort of in the right ballpark? And if so, can you maybe talk about why the margins in that business might be as low as they are, and what, if anything, you guys can do to increase those? Thanks.

Well, we haven't given any profitability numbers on the business. So, I'm not sure where got. But what I can tell you is, this is an awesome brand. We can do a lot with it and we are highly confident that we will get a terrific return on our investment.

The next question will be from Robert Moskow of Credit Suisse. Please go ahead.

Hi. And thanks for getting me back in. Sorry for the technical problem before.

Hey, Rob.

Hi. When I look at your Nielsen data in the past four weeks, it's in positive territory, and it gets better and better. You have provided slides just on the base sales and obviously that looks better too. But can I look at this past four-week number and assume that this is the new normal, that from an overall perspective, that you can stay positive here? I think your multiple would benefit greatly if we got comfort that this is not just a one-month kind of trend, but kind of like where you are at.

Well, clearly, it's moving in the right direction and every month is going to be different. It depends upon -- we still do have a lot of trade spend. We still do have a lot of merchandising. So, it depends upon where our activities line up vis a vis our competitive activities. But, it's moving in the right direction. One thing that I probably should mention, as we are getting to the end of the call is some people may think that hurricanes played a big role in our P&L in the quarter. That's actually not the case. The hurricanes are really more of a Q2 concept but -- and it will impact certain brands in the week before a hurricane, and what we call the preparation stage. But net/net impact on our portfolio is not that significant because, if you think about it, you might build up in the preparation phase but then you've got -- you've got, perhaps pantry inventory that's got to burn down. Furthermore, to the degree you ever have extended power outages and things like that, as you might imagine, that's not exactly helpful to frozen and refrigerated businesses. So, you have these puts and takes, is, I think, my overall point. And there might be weekly volatility in there, but in our experience, it's not a significant net impact, really not an impact at all to speak of in Q1. And we'll see how Q2 plays out.

Just in general then, should we expect, because of that trade spend, that the reported retail sales trends are a little bit stronger than your -- than your internal kind of net sales reporting because of that slotting kind of difference?

Not really, Rob. We historically tracked -- We don't have a lot of seasonal businesses, we don’t have a lot of early shipments. Our consumption, on average, tracks pretty close to our shipments. So, there's a little bit of volatility in there. But, I think the big point you’re making which I would agree with is we are seeing our plan work. And it's not surprising to me that we had this same situation when I was at Sara Lee and Hillshire and saw similar types of traction. We are beginning to see it here. Obviously, we’ve got a larger portfolio here, so we’ve got more work to do in terms of touching different brands, and that takes time. This is not an overnight exercise, but there's just tremendous encouragement, I think, here on the team in terms of the traction that we're seeing.

And ladies and gentlemen, this will conclude our question-and-answer session. I would like to hand the conference back over to Brian Kearney for his closing remarks.

Thank you. As a reminder, this conference has been recorded and will be archived on the web as detailed in our release. As always, Investor Relations is available for discussion. Thank you for your interest in ConAgra Brands.

Ladies and gentlemen, the conference has now concluded. Thank you for attending today’s presentation. At this time, you may disconnect your line.