Welcome to the Conagra Brands 2026 Annual Shareholders meeting. I'm Richard Lenny, Non-Executive Chairman of the Board of Directors and presiding officer of our meeting. I'll start by welcoming John Brase to his first Conagra shareholder meeting as our President and Chief Executive Officer. Also joining us today are Carey Bartell, our Executive Vice President, General Counsel, and Corporate Secretary, and my fellow nominees for director. The meeting is now called to order. Here's the agenda for our meeting. Following some introductory remarks, we'll conduct the formal business of the meeting. The meeting concludes with John providing highlights on Conagra Brands and answering shareholder questions. Welcome to those who have logged in. We appreciate your participation in today's meeting. The 2026 annual meeting is being conducted virtually. This format enables the meeting to be accessible to all Conagra's investors, and it facilitates our shareholders' ability to attend and participate.
To provide a fair, informative, and orderly meeting, rules of conduct have been established. These rules and the meeting agenda can be found in the lower right-hand corner of your screen. Your cooperation is appreciated. Please note that you may vote and submit written questions during the meeting by following the prompts on your screen. Let's get started. With the appointment of John as President and CEO at the start of FY 2027, the board has taken a significant step to position Conagra for success. The board's committed to ensuring that our directors have the right combination of skills, diverse perspectives, and deep leadership experience to oversee and guide Conagra's long-term strategy on behalf of its shareholders. This focus resulted in appointments in FY 2026 of John Mulligan and Pietro Satriano as independent directors. Both John and Pietro are experienced public company directors and proven C-suite leaders.
They possess extensive industry knowledge and experience that is additive to the board and its culture. As part of our long-term director succession plan, the board appointed new committee chairs for our three standing committees. Melissa Lora was appointed chair of our nominating and corporate governance committee, Denise Paulonis now leads our audit and finance committee, and John Mulligan succeeds Ruth Ann Marshall as chair of our human resources committee. The board's fully committed to working with John Brase and his management team to drive long-term shareholder value. As you'll hear from John later, his team has initiated a strategic review focused on achieving marketplace and financial success. The independent directors are confident that Conagra's next chapter will be its most successful one. Before we turn to the business of the meeting, I want to acknowledge the contributions of several Conagra leaders.
Thank you, Ruth Ann, for your leadership of our human resources committee over the past 10 years, particularly in the areas of employee compensation and leadership development. The committee looks forward to your continued guidance and counsel as John Mulligan has assumed the committee's chair role. Emanuel Chirico has chosen not to stand for election. The board joins me in thanking Manny for his years of exemplary service to Conagra and its shareholders. Sean Connolly was Conagra's CEO for more than a decade. Under Sean's leadership, Conagra was transformed into a focused, branded, pure-play food company. He guided the company through the pandemic, historic inflation, and supply chains disruptions, all while instilling a refuse to lose mindset. On behalf of our shareholders, employees, and the board of directors, I thank Sean for his extraordinary contributions.
Conagra now enters its next chapter with an engaged board, a new CEO at the helm, an energized management team, and talented employees focused on execution. The company has a renewed commitment to building Conagra's iconic brands, capitalizing on its strong innovation capabilities, and leveraging its inclusive culture. The goal is straightforward: deliver superior shareholder value over the long term. Thank you for your investment in Conagra as we begin this next chapter. Let's now move to the official business. Carey, please get us started.
Thank you, Rick, and good afternoon. This 2026 annual meeting of shareholders of Conagra Brands is convened in accordance with the notice and proxy statement first distributed on August 11, 2026, to shareholders of record as of July 29, 2026. We have appointed Anne St. Martin as our Independent Inspector of Elections for today's meeting. Ms. St. Martin has informed me that approximately 80% of Conagra Brands voting stock of record as of July 29, 2026, is represented at this meeting, either in person or by proxy. This means that a quorum is present and the legal requirements to proceed with this meeting have been met. To promote efficiency, the chair has waived the formalities of motions and seconds and declared the order of business as stated in the agenda to be accepted by those present.
The time is 12:05 P.M. Central Time on September 23rd, 2026, and the polls are now open. The polls will remain open until we officially close them later in the meeting.
Thanks, Carey. The proxy statement sets forth four proposals to be voted on. No other proposals may be presented for a vote at this meeting, and no proposals or nominations from the floor will be heard. The first three proposals have been presented by the company. The first proposal is the election of the director nominees named in the proxy statement, each for a one-year term expiring at the annual meeting of shareholders to be held in 2027. The 11 director nominees are as follows: Anil Arora, John Brase, Thomas K. Brown, George Dowdie, Francisco Fraga, Melissa Lora, Ruth Ann Marshall, John Mulligan, Denise Paulonis, Pietro Satriano. I, Richard Lenny, am also a director nominee. The second proposal to be voted on is the advisory approval of our named executive officer compensation.
The third proposal to be voted on is the ratification of the appointment of KPMG LLP as our independent auditor for FY 2027. Present today representing KPMG is our Lead Audit Partner, Andrea Rodbro. Andrea will be available to respond to appropriate questions during the questions and answer session at the end of the meeting. The fourth proposal to be voted on is a non-binding proposal submitted by a shareholder requesting that the board adopt a policy limiting the board's authority to issue blank check preferred stock. The shareholder proposal, the shareholder supporting statement, and the company statement of opposition to the proposal are included in the proxy statement. We understand that a representative of the shareholder proponent, Mr. Matthew Prescott, on behalf of The Accountability Board, is on the phone line.
Mr. Prescott, in accordance with the rules of conduct that were provided to you in advance of the meeting, you have two minutes to present the proposal. Please proceed.
Thanks so much, and I'll keep this brief for the sake of time today. I just want to say thanks first to the board for considering the proposal. Obviously, we didn't end up seeing eye to eye on it, but we appreciate the consideration nonetheless. We think the proposal is self-explanatory. It's passed resoundingly at other companies recently, and we think it makes sense for Conagra shareholders to pass it as well. We encourage everybody to vote in favor of it and would refer folks to the proxy statement for more information about the proposal. Thank you.
Thank you, Mr. Prescott. As Carey mentioned, the polls are open. If you previously voted by proxy, you do not need to vote today unless you wish to change your vote. For the shareholders online who have not yet voted, we'll take about a minute or so now before we close the polls to pause the meeting and allow you to vote by following the instructions on the meeting page. The time is now 12:10 P.M. Central Time, and the polls for voting are closed. Carey will report on the preliminary vote results.
The Inspector has given me a preliminary tally, and the preliminary voting results are as follows. Our shareholders have elected all 11 director nominees. They have approved our named executive officer compensation on an advisory basis. They have ratified the appointment of KPMG as our independent auditor for FY 2027, and they have approved the shareholder proposal to limit board authority to issue blank check preferred stock. The final vote tally, certified by the Inspector of Elections, will be included with the minutes of this meeting and publicly filed with the SEC on a Form 8-K within four business days. Before we continue with comments from our CEO, I would like to take a moment to remind you that today's remarks may include forward-looking statements, which represent our current expectations about future events and financial performance.
All forward-looking statements are based on information currently available to us and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. To learn more about the risks and uncertainties that could affect our business, please refer to the documents we file with the SEC. In addition, we may also discuss some non-GAAP financial measures today. Reconciliations of those measures to the most directly comparable GAAP measures can be found on our website at conagrabrands.com/investor-relations.
Thanks, Carey. With that, I will officially adjourn the business portion of the meeting. I am most pleased to introduce and welcome again the President and CEO of Conagra Brands and my fellow board member, John Brase. John will provide a brief update on our company's business, culture, and communities. After that, we will answer questions that we have received from our shareholders. Please follow the prompts on your screen to submit questions. John.
Thank you, Rick. Hello, everyone, and thank you for joining us. I am honored to be speaking with you today at my first annual shareholders meeting as CEO of Conagra Brands. I am excited to bring 35 plus years of CPG experience with companies like The J.M. Smucker Company and Procter & Gamble to Conagra Brands. My industry experience has given me great perspective and appreciation for Conagra. It has also given me the humility to recognize that the best way for me to be effective in this role is to take time to listen to and engage with our employees, our consumers, our retail partners, and you, our investors. I have made this a priority and will continue to do so on an ongoing basis.
While we delivered FY 2026 results within our original guidance ranges in a dynamic environment, our results also reflect the continued need to take bold action to unlock our full potential. In FY 2026, reported net sales decreased 2.9%, organic net sales decreased 0.4%. Reported operating margin was -14.4%. Adjusted operating margin was 11.3%. Reported diluted loss per share was $4. Adjusted earnings per share was $1.72. The company paid approximately $670 million in dividends to shareholders. Finally, Conagra made significant progress reducing debt, lowering net debt by almost $1 billion versus FY 2025. As Richard Lenny said earlier, there is work to be done. We started that work by identifying four interconnected priority areas where we are focusing on building a strong foundation for profitable growth. Let's take a closer look at each. Starting with our focus on margin restoration.
Over the past several years, we have sacrificed a significant amount of margin in our business. This has been driven by continued inflation and an emphasis on driving volume, sometimes at the expense of margin. We are going to leverage two primary levers to reverse this trend. The first is productivity, which will always be our initial defense against inflation. We'll focus on driving greater than 4% productivity while increasing the speed and agility of the organization. The second is strengthening our price mix. We will implement strategic inflation-justified pricing actions where necessary, with a particular emphasis on our frozen portfolio. While these actions may pressure volumes in the short term, they are essential to restoring margins and funding investments necessary to support the long-term health of our categories and of our business. Which leads me to my next priority.
In FY 2027, we're increasing investment where we believe it will create long-term value. That begins with our brands. We intend to increase advertising spend to approximately 3% of net sales this year with the focus on categories where we have the greatest opportunity to win, particularly frozen meals and meat snacks. It's not a modest adjustment. It's an increase of 14% year-over-year, and it's a deliberate commitment to give our brands enhanced support to win with consumers. We're also increasing capital investments in our supply chain. Modernizing our supply chain strengthens service, improves resilience, and creates additional productivity opportunities. Next, radical simplicity is the organizing principle for how we will run this company moving forward. I firmly believe complexity is one of the biggest barriers to growth. For me, radical simplicity isn't necessarily about making things smaller. It's about making them clearer.
Our objective is a simpler, more focused Conagra, one that concentrates our resources behind brands and categories where we are best positioned. We'll also evaluate strategic options for our non-core businesses. The final priority is capital allocation. One of the most important responsibilities of management is deciding where every dollar creates the greatest long-term return. You've already seen in July our decision to reset the dividend. This was not a choice we made lightly, but one we believe is right for the long-term success of this company. This action proactively realigns our capital allocation, accelerates progress toward our leverage target, supports critical investments, and strengthens our financial flexibility, including the ability to reshape the portfolio over time. Our commitment to shareholders hasn't changed. Our objective remains a balanced approach to capital allocation with a dividend that returns meaningful capital to shareholders and can grow alongside earnings over time.
Something else that hasn't changed is our team's continued focus on our people and communities. We will focus our efforts across four citizenship pillars. Good food. We are dedicated to making safe, delicious, and nutritious foods that fulfill the needs of modern consumers. Responsible sourcing. We approach the sourcing of ingredients and packaging materials with care and consideration, taking into account the potential environmental and social impacts of our products throughout their life cycle. Better planet. We believe that responsible environmental practices are a key ingredient for a healthy business and are focused on the climate-related impacts of our company. Finally, stronger communities. Our team is driven by collaboration, innovation, and a desire to grow, and we support them with the tools they need to succeed and thrive in their careers.
We also help fight the issue of food insecurity in the communities where we live and work through volunteerism, product donations, and financial contributions. You can read about all of our great work to support those pillars in our annual citizenship report, which is featured on our website. Our first quarter FY 2027 earnings results will be announced on Wednesday, September 30th. I hope you read the press release and listen to our conference call scheduled for that morning. I want to end by saying that the more time I spend with this company, the more convinced I become that Conagra's best days are ahead of us. This is a company with iconic brands, talented people, and strong positions in categories that matter to consumers every day. Those are enduring advantages. Our responsibility now is to unlock more of this great company's potential.
I want to note that we are actively developing our longer-term strategic roadmap, and I look forward to sharing more at our publicly available Investor Day in early calendar 2027. Please stay tuned for more details about that event. As CEO, my commitment is straightforward. We'll be honest about where we stand and what we need to do to deliver consistent and reliable results. We'll hold ourselves accountable for the commitments we make, measuring success by the results we deliver. Thank you for your time today and for your continued support of Conagra. We will now address any appropriate questions. The first question is about divestitures and if we're planning to divest any additional brands or products, as well as whether we will consider a split. We regularly evaluate strategic alternatives with, and in our portfolio actions, and we always review this with our board of directors.
Let's say over time, we've been very active in both acquiring and divesting assets, both over the medium and the longer term, we will most likely continue to execute that strategy. While I can't comment on any potential future transactions right now, we will continue to evaluate this in the future. The next question is about GLP-1s and the K-shaped economy and how each is impacting our strategy. As it relates to GLP-1s, I would say, I really believe our position is what our portfolio is well-positioned in this environment. We have a range of options to delight our GLP-1 users, including portion control, Healthy Choice frozen meals, our high protein Duke's and Slim Jim meat snacks, and fiber-forward protein snacks like DAVID Seeds and Orville Redenbacher's and Angie's BOOMCHICKAPOP Popcorn. In terms of the K-shaped economy, we have a broad range of brands that compete across the value chain.
A great example of this is in our frozen meals portfolio, where we have more premium brands like Healthy Choice and Evol, and more value brands such as Banquet. This range helps us compete across a variety of economic environments. The third question is about whether we expect to have future goodwill impairments. On this question, I would ask you to please refer to our documents filed with the SEC, including our 10-K, for additional information on our analysis and our approach related to goodwill impairment testing. Our fourth question is about Conagra Brands raising prices and the impact to shareholder value. I want to first start by saying affordability remains top of mind for our consumers. As we said earlier, as we face inflation, we will always try to offset our cost pressures as much as possible through our productivity programs, but sometimes that is not enough.
When that is the case, we will take targeted pricing actions to ensure that we can continue to invest in our great products that our consumers love. I have outlined those actions in our latest, in our last earnings release. We believe these actions, in addition to the other priorities outlined, will help build a solid foundation for growth going forward. I believe that is our last question. With that, I will turn it back to Richard Lenny .
Thank you, John. This concludes the 2026 annual meeting of shareholders of Conagra Brands. Thank you once again for joining us today.
The meeting has now concluded. Thank you for joining, and have a pleasant day.