Dave Marberger: Sure. So the operating margin improvement we guided to is coming primarily from gross margin improvement. So the A&P and SG&A taken together should approximate the same percentage of net sales as they did in fiscal ‘23. So the key drivers of the gross margin improvement are the price mix, the Q1 and then the targeted Q2 pricing I just talked about. Productivity of $300 million, which we talked about, we’re very pleased with where our productivity programs are right now and then netting against that some negative overhead absorption and business investments. And then I talked about wrapping on some supply chain disruption costs that we had in fiscal ‘23, that should be a tailwind to margin for fiscal ‘24. So they are the key drivers, I would say, to get to the guidance.
Pamela Kaufman: Thank you.
Operator: Our next question will come from David Palmer with Evercore ISI. Please go ahead.
David Palmer: Thanks. I wanted to ask you a question on frozen and snacks. I mean, obviously, those are key long-term growth categories for Conagra and you’ve shown some good innovation energy there. It looks like the pipeline is strong. But those categories are not doing that great lately. Those categories have slowed and you’re losing share in some of them. I’m wondering if you could speak to perhaps a few of these, just tell us what your outlook is and what’s going on to your best diagnosis frozen entrees, frozen vegetables, maybe popcorn and because obviously, these are going to be key growth categories for you? Thanks so much.
Sean Connolly: Hey, David. Sure. It’s Sean. Our frozen business has been a juggernaut for us for quite some time now. In fiscal ‘23, overall, as you saw in our presentation today was another very strong year. Obviously, Q4 had a lot of noise in it with Americold and the broader consumer behavior shifts that I discussed. But we remain super bullish on the future of the space. And we have lofty long-term objectives that we plan to deliver through a number of tools in our playbook. With respect to shares, overall, we’ve been very pleased with our share performance over the long-term, which you saw earlier. Obviously, supply chain disruptions in certain categories we experienced, made share gains more challenging in short-term windows, but we feel good overall.
And in categories like vegetables, keep in mind, as we discussed at CAGNY, we are focused there on the premiumization of the category, not on low tier, more commodity vegetables. So there is an element of value over volume strategy that remains central to our birds eye playbook there as we continue to drive premiumization and really more of a finished prepared vegetable product than a bag of commodity vegetables. And then with respect to pick a snack or just about any other category across mainstream kind of food industry right now, there has been some slowing down where we would have expected volume trends to be up a bit and really see volume improvement more in sync with the dollar decline. So that softness, as I mentioned, does point to a bit of a consumer behavior shift.
And the data we can see is very interesting in what it does point to, and that is it’s not materially related to private label trade down or something like SNAP. Rather, it is more of a multi-category slowdown that appears to be tied to shift in consumer behavior, aimed at stretching their budgets likely to cover other expenditures like travel, things like that. And again, that’s likely a short-term phenomenon, but we do have that factored into our outlook as we go forward. We’re going to invest to keep our brands including popcorn and other snacks and frozen on top of mind with consumers.
David Palmer: Thank you.
Operator: Our next question will come from Cody Ross with UBS. Please go ahead.
