You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: While we are making those statements in good faith, we do not have any guarantee about the results we will achieve.
Descriptions of the risk factors are included in the documents we filed with the SEC.
Also, we will be discussing some non-GAAP financial measures, references to adjusted items including organic net sales referred to measures that exclude items management believes impact the comparability for the period referenced.
Today, Dave and I will discuss our strong second-quarter results as well as our perspective on how Conagra is positioned to continue to succeed in both the current environment and beyond.
So, let's get started.
I'm very pleased with our strong results for the second quarter.
Our business continue to perform well both in the absolute and relative to peers.
Our success to date in fiscal 2021 is not only a testament to our team's ability to adapt to the current environment but a reflection of the work we've done to transform our business over the past five-plus years.
Our ongoing execution of the Conagra Way playbook perpetually reshaping our portfolio and capabilities for better growth and better margins has enabled us to rise to the occasion during the COVID-19 pandemic.
And that has positioned the business to excel in the future.
During the second quarter, we continue to build on our momentum and our Q2 results exceeded our expectations across the board.
We had strong, broad-based sales growth, our margin expansion is ahead of schedule, and I'm proud to announce that we've reached our deleveraging targets earlier than originally planned.
In keeping with our Conagra Way playbook, we continue to optimize the business for long-term value creation during the quarter.
We made targeted investments in both production capacity and marketing support to drive the physical and mental availability of our products.
We also remained committed to sculpting our portfolio through smart divestments with the agreement shortly after the second quarter closed to sell Peter Pan Peanut Butter.
Peter Pan is a very good business, but it's not an investment priority for Conagra given our other portfolio priorities.
Finally, we are reaffirming our fiscal 2022 guidance for all metrics.
And none of this would be possible without our exceptional team, particularly our frontline workers.
So, before we dive into the details of the quarter, I want to recognize everyone responsible for the continued extraordinary work of our supply chain.
I'm extremely proud of the thousands of hardworking Conagra team members whose dedication has enabled our industry-leading performance.
We remain focused on keeping employees safe while meeting the needs of our communities, customers, and consumers.
With that, let's get into the business update.
As the table on Slide 7 shows, our second-quarter results exceeded our expectations across the board.
We delivered organic net sales growth of 8.1%, adjusted operating margin of 19.6%, and adjusted earnings per share of $0.81.
These results enabled us to reach our fiscal '21 net leverage ratio target of 3.6 times ahead of schedule.
During the second quarter, we continued to drive significant growth across our retail business.
Total Conagra retail sales grew 10.4% year over year with strong growth across each of our snacks, frozen, and staples portfolios.
Our results were driven by continued success in expanding our presence with consumers and gaining share.
Total Conagra household penetration grew 14 basis points versus a year, ago and our category share increased 26 basis points.
Critical to our ability to sustain our growing relevancy with consumers is the physical availability of our products, whether through brick and mortar or online.
And Slide 9 demonstrates how our ongoing investments in e-commerce have continued to yield results.
In the chart on the left, you can see the step-change in e-commerce growth for total edibles that has occurred since the onset of the pandemic.
But what's really impressive about this chart is the sustainability of our e-commerce performance.
We've retained a massive portion of the e-commerce sales we gained at the onset of the pandemic, and our results have outpaced total edible e-commerce growth each quarter.
As a result of our sustained success, e-commerce continued its recent trend of steadily increasing as a percentage of our total retail sales as you can see on the right.
While e-commerce growth both on an absolute basis and as a percent of overall sales is not a new dynamic for Conagra, this growth has accelerated during COVID-19.
In addition to our continued progress in e-commerce, our new innovation generated strong performance during the second quarter.
When we began this journey over five years ago, we've recognized that we had a lot of latent potential in the portfolio, it just had to be modernized.
So, we set out to aggressively do just that.
And you'll recall that we established a goal of having 15% of our annual retail sales come from products launched within the preceding three years.
As you can see on Slide 10, our innovation performance has continued to exceed our 15% goal.
What's equally important is the consistency of our innovation performance.
Investments we've made over the last five years in our innovation capabilities enabled us to continue launching new products since the pandemic began.
Customers trust our innovation track record and rely on our new products to drive consumer trial and overall category growth.
Slide 11 drills down on the strength of our recent innovation performance compared to last year's first half launches.
The products we introduced in the first half of this year have achieved 37% more sales per UPC, and 28% more distribution points per UPC during the comparable time period.
Product performance highlights include Marie Calendars boast the No.
1 branded new item in frozen indulgent single-serve meals.
Duncan Hines has delivered the top 3 highest velocity new items in the single-serve baking, and our modernized Hungry Man brand is outpacing category growth by more than two times.
After a strong first half of fiscal '21, we will introduce even more new products that will build distribution in the second half.
Expect to hear more about our upcoming product launches at CAGNY next month.
Importantly, our terrific frozen vegetables business returned to strong growth in the quarter as we brought on our additional capacity investments online.
Slide 13 digs a bit deeper into our largest frozen brand, Birdseye.
Birdseye is a cornerstone of the important frozen vegetable segment with a No.
1 position in the category, more than twice the category share of the closest branded competitor.
Recall that Birdseye previously faced some supply constraints as we worked to bring new capacity online.
And last quarter, I noted that shipments for the brand were a bit ahead of consumption as retailers started rebuilding their inventories.
As you can see in the charts on Slide 13, Birdseye returned to form in Q2 as expected.
In addition to strong retail sales growth of 7.2% in quarter, Birdseye gained an impressive 261 basis points of share from Q1 to Q2.
Continuing to Slide 14, you can see how Birdseye has attracted and retained more new buyers than our competition since the pandemic began.
Frozen vegetables category remains highly relevant to consumers and we believe the steps we've taken over the past several quarters to modernize the Birdseye brand and expand capacity have positioned us well to build on our category leadership.
Turning now to another area of strength, our leading portfolio of frozen single-serve meals had another terrific quarter.
As you can see on Slide 15, Conagra has outperformed peers, driven category growth, and attracted new buyers since the start of the pandemic.
As the chart on this slide shows, we have three of the top brands in this category from both the trial and repeat perspective.
Our snacks business also continued to see strong growth in the quarter.
As you can see on Slide 16, we delivered double-digit retail sales growth on a year-over-year and two-year basis in snacking led by impressive results across the popcorn, sweet treats, and meat snacks.
We're not just growing, we're winning versus the competition.
Slide 17 shows how we grew share year over year in popcorn, meat snacks, hot cocoa, and ready-to-eat pudding and gelatin in the quarter.
Our staples portfolio also delivered solid results in Q2.
Historically, this portfolio has served as a -- primarily as a source of cash for us but it hasn't been looked at as a growth engine.
But Slide 18 shows how staples remained highly relevant to consumers in the quarter as people continue to rediscover cooking and the utility, relevance, and value of products in our portfolio.
Our basket of the total staples category grew retail sales by 12.7% in the second quarter.
People are returning to their kitchens during the pandemic and new, younger consumers are discovering the joy of cooking.
Many of the brands on this slide including PAM, RoTel, and Hunt's are cooking utilities and ingredients.
As we've discussed before, the current environment has resulted in consumers trying or reengaging with our products and coming back again and again.
And that takes us to what we see going forward and how our business is uniquely set up to win.
Our execution of the Conagra Way playbook over the last five-plus years enabled us to deliver strong performance prior to the onset of COVID.
And we firmly believe that our reshaped portfolio, modernized products, and enhanced capabilities have been foundational to our ability to excel during these highly dynamic times.
We all know that the COVID pandemic has driven an increase in at-home eating overall.
But for Conagra, it has also meant an acceleration of the consumer trial, adoption, and repeat purchase rates of our products.
Our results have been strong on both in absolute and relative basis.
These dynamics have driven meaningful levels of incremental cash flow for our business.
They've also enhance the ROI of our previous disciplined investments in portfolio, capabilities, and the physical and mental availability of our products.
Importantly, the Conagra Way is perpetual.
While we've adapted to the current environment and deliver superior results, we also continue to look to the future and make smart investments to further strengthen our business.
Our investments include continuing to modernize our products and packaging, increasing production capacity when category dynamics warrant, supporting on-shelf availability, and increased e-commerce share, and raising consumer awareness.
To be clear, these investments are not a reaction to the near-term environment but to see as rooted in our longer-term outlook for the business and our disciplined execution of the Conagra way.
We believe that Conagra is in a strong position to continue to win now and for years to come.
We expect that our investments, coupled with consumer adoption and the proven stickiness of our products will result in Conagra continuing to deliver long-term profitable growth.
In summary, we continue to see solid execution across our portfolio aligned with the Conagra way playbook in Q2 which enabled us to deliver results that exceeded our expectations.
Our business remains strong in the absolute and relative to competition.
And we expect Conagra to be in an even better position post-COVID as a result of our ongoing disciplined approach to investment and innovation.
Today, I'll walk through the details of our second-quarter fiscal '21 performance and our Q3 outlook before we move to the Q&A portion of the call.
I'll start by calling out a few performance highlights from the quarter which were captured on Slide 22.
As Sean mentioned, outstanding execution by our teams across the company enabled us to exceed expectations for net sales, margin, profitability, and deleveraging during the second quarter while we continued to invest in the business.
Reported and organic net sales for the quarter were up 6.2% and 8.1%, respectively, versus the same period a year ago.
We continued our strong margin performance from Q1 as Q2 adjusted gross margin increased 139 basis points to 29.9%.
Adjusted operating margins increased 250 basis points to 19.6%.
Adjusted EBITDA increased 16.7% to $712 million in the quarter.
And our adjusted diluted earnings per share grew 28.6% to $0.81 for the second quarter.
Slide 23 breaks out the drivers of our 6.2% second-quarter net sales growth.
As you can see, the 8.1% increase in organic net sales was primarily driven by a 6.6% increase in volume related to the growth of at-home food consumption.
The favorable impact of price mix which was evenly driven by favorable sales mix and less trade merchandising also contributed to our growth.
The strong organic net sales growth was partially offset by the impacts of foreign exchange and a 1.7% net decrease associated with divestitures.
The Peter Pan peanut butter business is still part of Conagra Brands and thus included in our organic results.
We expect the sale of Peter Pan to be completed in Q3 at which point it will be removed from organic net sales growth.
I will discuss the estimated impact of this divestiture shortly.
Slide 24 summarizes our net sales by segment for the second quarter.
On both the reported and organic basis, we saw continued significant growth in each of our three retail segments: grocery and snacks, refrigerated and frozen, and international.
The net sales increase was primarily driven by the increase of at-home food consumption as a result of COVID-19, which benefited our retail segments but negatively impacted our food service segment.
The grocery and snack segment experienced strong organic net sales growth of 15.3% in the quarter.
The segments we're getting net sales growth outpaced its growth in consumption as retailers continued to rebuild inventories.
Our refrigerated and frozen segment delivered organic net sales growth of 7.8%.
This growth is a testament to our continued modernization and innovation efforts and illustrates the increasingly important role refrigerated and frozen products play in meeting the evolving needs of today's consumers.
Turning to the international segment.
Quarterly organic net sales increased 9.1%.
This segment experienced particularly strong growth in both Canada and Mexico.
This quarter, our food service segment reported a 21.4% organic net sales decline, primarily driven by a volume decrease of 25.3% due to less restaurant traffic as a result of COVID-19.
Slide 25 outlines the adjusted operating margin bridge for the quarter versus the prior-year period.
As you can see, in the second quarter, our adjusted operating margin increased 250 basis points to 19.6%.
Strong supply chain realized productivity, favorable price mix, cost synergies associated with Pinnacle Foods acquisition, and fixed cost leverage combined to drive 440 basis points in adjusted operating margin improvement more than offsetting the impact of cost of goods sold inflation and COVID-related costs in the quarter.
Collectively, these drivers resulted in a 139 basis point increase in our adjusted gross margin versus the same period a year ago.
A&P increased 4.7% on a dollar basis primarily due to increases in e-commerce marketing A&P was flat on a percentage-of-sales basis this quarter versus Q2 a year ago.
Finally, our adjusted SG&A rate was favorable by 110 basis points primarily as a result of fixed cost leverage on higher net sales, the Pinnacle cost synergies, and temporarily reduced spending as employees work from home and significantly reduce their travel.
I want to give you some additional perspective on our margin expansion.
As I just mentioned, operating margin expanded 250 basis points for the quarter well ahead of our expectations.
Of this 250 basis point expansion in operating margin this quarter, approximately 60 basis points reflects our ongoing progress toward achieving our fiscal '22 margin target of 18% to 19%.
We also saw an approximate 180 basis point margin benefit from price mix in the quarter primarily driven by mix, and to a lesser extent, favorable pricing in lower-trade merchandising.
We expect to retain some of this benefit going forward, but exactly how much remains uncertain at this point.
Additional 10 basis points of net margin expansion came from favorable fixed cost leverage across the entire P&L and COVID-related SG&A benefits, mostly offset by COVID-related cost of goods sold.
We do not expect this net benefit to repeat next year.
Slide 26 summarizes our adjusted operating profit and margin by segment for the second quarter.
Our three retail segments, all operating profits increased by double-digit percentages versus the same period a year ago.
Each retail segment benefited from higher organic net sales and strong supply chain-realized productivity.
In the foodservice segment, however, operating profit decreased due to the COVID-related impacts of lower organic net sales and higher input costs that more than offset the impacts of favorable supply chain-realized productivity and cost synergies.
Overall, we're pleased with the continuation of the strong Q1 margin results into the second quarter which are anchored by core productivity and benefits from the Pinnacle acquisition we expected to see.
Turning to Slide 27.
We've outlined the drivers of our second-quarter adjusted diluted earnings per share growth versus the same period a year ago.
EPS increased 28.6% to $0.81.
The growth in the quarter was primarily driven by the increase in adjusted operating profit associated with the net sales increase and margin expansion, and also benefited from a decrease in net interest expense as we've continued to reduce debt as prioritized.
Slide 28 highlights our significant progress on the overall synergy capture since the close of the Pinnacle Foods acquisition during the second quarter of fiscal '19.
We captured an incremental $27 million in savings during the most recent quarter bringing total cumulative synergies to $246 million.
As a reminder, the majority of total synergy to date have been in SG&A.
Cost-of-goods-sold synergies have started to be a bigger portion of our synergy cash for the last two quarters and we expect them to make up a majority of our synergies going forward.
We remain pleased with the team's progress in capturing synergies and remain on track to achieve our fiscal '22 synergy targets.
Slide 29 shows the strong progress we've made to date to achieve our deleveraging targets.
Since the close of the Pinnacle acquisition in the second quarter of fiscal '19 through the end of the second quarter fiscal '21, we have reduced total gross debt by $2.3 billion resulting in net debt of $9.2 billion.
We are pleased to report that at the end of the second quarter, we achieved our net leverage ratio target of 3.6 times, down from five times at the closing of the Pinnacle acquisition and 3.7 times at the end of the first quarter of fiscal '21.
Strong, consistent improvements in debt reduction, coupled with robust earnings enabled us to achieve this net leverage ratio target ahead of schedule.
Looking ahead, we will continue to be focused on executing a balanced capital allocation policy.
We remain committed to solid investment-grade credit ratings as we continue to be opportunistic using our balance sheet to drive shareholder value such as our increased investment in capex and the recent 29% dividend increase.
Slide 30 summarizes our outlook.
While we're confident in the quarters ahead and that Conagra will continue to excel beyond the COVID-19 environment, the sustained impact of COVID-19 remains dynamic and continues to make near-term forecasting with specificity a challenge.
We expect a continuation of elevated retail demand and reduced foodservice demand compared to historic pre-COVID-19 demand levels.
We are currently seeing both of these trends continue in the third quarter to date.
For the third quarter, we expect organic net sales growth to be in the range of plus 6% to 8%.
We expect Q3 operating margin to be in the range of 16% to 16.5%, implying a year-over-year increase of 30 to 80 basis points.
This estimate includes an expected acceleration of our AMC investment in e-commerce marketing that we started in Q2, reducing the estimated year-over-year Q3 operating margin expansion.
As a reminder, Q3 operating margins are historically lower than Q2 operating margins given the leverage impact on the seasonality of sales.
Given these sales and margin factors along with expected improvement in below-the-line items, we expect to deliver third-quarter adjusted earnings per share in the range of $0.56 to $0.60.
Our third-quarter guidance also continues to assume that the end-to-end supply chain operates effectively during this period of heightened demand.
We are selling the business for approximately $102 million and the expected annualized impact of the divestiture is a reduction of approximately $110 million of net sales and $0.03 of adjusted EPS.
Lastly, we are reaffirming all metrics of our fiscal '22 guidance which also excludes the impact of the pending sale of Peter Pan.
We look forward to presenting again next month at CAGNY where we will provide another update on our progress in executing the Conagra Way.
We hope you'll join us.

user
q2 adjusted earnings per share $0.81.
sees q3 adjusted earnings per share $0.56 to $0.60.
reaffirming its fiscal 2022 guidance, which does not yet include impact of pending sale of peter pan peanut butter business.
sees q3 adjusted earnings per share is expected in range of $0.56 to $0.60.
organic net sales growth is expected in range of +6% to +8% in q3.
ultimate impact of covid-19 pandemic on company's full year fiscal 2021 consolidated results remains uncertain.

assistant