B&G Foods (BGS) 5 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the B&G Foods Third Quarter 2024 Earnings Call. Today's call, which is being recorded, is scheduled to last about 1 hour, including remarks by B&G Foods management and the question-and-answer session. I would now like to turn the call over to AJ Schwabe, Senior Associate [indiscernible] AJ?

Good afternoon, and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer; and Bruce Wacha, our Chief Financial Officer.

You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the Investor Relations section of bgfoods.com.

formal the need statements. discussion our that remind begin of part today we remarks, to I everyone Before includes forward-looking statements placed of reliance guarantees are and These undue therefore, future should them. upon performance, be not not update financial We obligation impact report Form revise refer a operating our or for more company's XX-K annual the to of and filings on detailed SEC future otherwise. you discussion information, statements, Foods' condition. B&G subsequent risks forward-looking recent no whether B&G of a result to publicly future Foods most undertakes and or that events any results could as new

call outlook the the share, Casey. highlights and We concerning financial then be for and gross thoughts our profit that gross and also adjusted comparable to of EBITDA, factors quarter to profit, base today's call call the percentage segment of his measures and selected would various to the our Reconciliations directly over discuss discuss results, sales. like our XXXX. I to earnings most business measures the the XXXX. GAAP per release. Casey non-GAAP affected guidance provided EBITDA, financial adjusted now will Bruce financial adjusted of are adjusted business remainder results fiscal references of measures, will opening XXXX will for today's begin remainder the income, these third adjusted for making with adjusted remarks fiscal turn the financial net net on earnings in diluted

our thank earnings third today, Thank joining day, AJ., for us call. and afternoon. for XXXX all you, Good you quarter election

somewhat expectations. EBITDA sales of net of and quarter $XXX.X $XX.X million adjusted were below Third million

X% to decrease to net the lower ago approximately net whose soybean costs, net period. year by sales reflect impacted by all Crisco, sales negatively business base Excluding compared a decreased in were pricing

quarter the sales impacting of trends. Some factors third key

center with than business of been trends store the most recover Foods consistent portfolio to industry. base expected, packaged slower the have First, foods on B&G

and We trends, the perimeter foods in a plus seen & improvement business fresh relative shown to packaged positive store, pricing much the fresh has year. been inflation. the purchasing the of with Flavor relative wake narrowing produce patterns X.X% first high the in has to not food half their by Spices that exception in have of our Solutions consumers frozen driven adjusting of growth last proteins of in with the QX, of the and The

days and the Foods, in customers industry B&G estimate was that inventories particularly We in major July XX% overall roughly to a X%, the warehouse net their generally lower across but patterns. lowered traffic and to QX by impact X% categories to be total During shelf reflect down X% service retail of week. several restaurant period, continued our sales, quarter. Food have sales

Taco vegetable some by in Ortega, months experienced and, increased several We impacted Paso been El cases, in have have category, categories, well Old a Mexican in brand. the [indiscernible] competitive to protect is few brand activity Bell over oil, rebuild priced aggressively In activity increased the the last from distribution. as as some the

roughly Green with million quarter, approximately presented shelf-stable another by third million the divestiture Giant Green the compared the decreased $X on For million. frozen of of adjusted The Giant U.S. [indiscernible] business, third Mexico million, $X.X $XX.X year-over-year XXXX. the of exchange $XX quarter EBITDA decline from operations to foreign representing

from EBITDA B&G Foods and has the XX.X%, EBITDA period. on of adjusted quarter a been depressing from adjusted costs to percentage for $X Giant year million a profits, year-to-date. drag exchange net the was third segment Total $X peso as sales million Foreign by Green down prior the

versus isolated only last modest and et categories. favorability in pepper, and some cetera, continued to in costs transportation [indiscernible], we some see QX, warehousing During inflation year. garlic,

reflect to guidance the XXXX. In center terms guidance the will for of more trends a Bruce the fiscal reality are slower environment. cover recovery store detailed consumer in of outlook, year and we revising

see forward, report reporting. visibility first operating Foods Moving I business segments, of touch the across recovery stabilization second performance to results the XXXX providing the few with expect segments. Spices improvement of four and & Solutions. to a sequential Flavor B&G on greater into provide we will and company's more halves Bruce by continues year gradual the year. Segment lines units. in between the detail. operating will top fiscal

third highest increases 'XX, in the segment down growth some foodservice parameter in year aided quarter the adjusted spend, material the represents of behind sales quarter a costs trade certain B&G This EBITDA as net of by Foods Segment adjusted fresh raw mix. fruit and timing sales. percentage increased net Third X.X% was of modestly product versus the grocery. fiscal segment EBITDA of

also a largest the decreased The versus Crisco although dressings declined behind seasoning the continued launched coming. last reflected customers last by in lower ranch the channel growth versus Girl the by net QX Ortega pressure featured and have new a year. Skinny model. Sixes X.X% Bell sales QX down line activity X.X% last brand strong We pipeline high competitive segment The distribution. Specialty. of television grilling pricing [ through year. brand, and under The brand salad behind driver franchise. Meals. oil the Specialty impacted increased by new in we Taco segment Meals our year, by licensed brand, ] net capacity blends was Four was of sales Yellowstone and from innovation The pricing the expanded items, soybean product increased versus

impact X.X% softness can business vegetables. year, in net oil [ the down prior has and in frozen and X.X%, due and quarter. Specialty were more soybean during U.S. trends aggressive Green some the some reflecting than less also sales some pricing net which category lower been pricing overall improvement segment the from was fielded down experienced adjusted EBITDA We last The vegetables. delays promotion lower in Giant of frozen also getting costs. Frozen and vegetables sales, divestiture, versus to rectified. Weston ] reflected excluding an customers, unit quarter

positive for of [indiscernible] Nature to Excluding business, the to and completed committed improve U.S. the direction This fall, in ] maximize vegetables to a sharpen Green focus, premium margins Can the number profile. our priority flow U.S. and high January frozen future vegetable and The brand have of cash of future restructuring creation. business for Green value critical [ including divested remains sides. Portfolio last following EBITDA innovation the Giant impact segment This and from and a Giant strategic and was a for B&G our Foods we is XXXX. fall, divestiture and shaping. was the reshaping the exchange risk company the launched strong foreign quarter. adjusted shelf-stable pipeline, peso, portfolio

including with We our all business unit. Green trend frozen and brand and and Giant the possible divesture continue trends. strong of is for some of or distribution, health noncore possible dietary divestiture a review the a to assets, and and of with remains assets in broad sale remaining on the the vegetables portfolio category frozen awareness vegetable

agreement opportunities, in businesses frozen during you reach not our However, right calls, receive any often with plans fit and and I Q&A is B&G the not Foods an constraints. In a to overall it policy that be anticipation core the to shelf-stable these company unless no or since assets the may remind focus on until with in the we specific Particularly more our given questions portion and we comment there counterparty. add opportunities divestiture of portfolio, capital capabilities. of earnings acquisition are

remainder the you. timing. Thank we our the the And and turn As regarding the general call portfolio, to for or on our and more have than and I this such, for specific quarterly divestiture performance restructure detail of will other statements to reshape possible year. regarding review Bruce further the at over have made opportunities will commitment we comment now divestures the possible outlook time not of

everyone. Thank for you, joining today. us Casey. Good you afternoon, Thank

the volume pricing of and XXXX of third a million of oil Giant or $X.X net product business decrease and $X.X the $X.XX [indiscernible]% points currency. generated quarter as business $XX.X in in lower coupled shelf for in adjusted million million, net by $XXX.X sales, sales our decline sales, the quarter Giant stable that diluted to contributed the benefit everyone's EBITDA, reflect you third U.S. million our as for consumption or approximately evening, $XX.X be vote commodity data, the impacts decline third quarter of net net Crisco the of results decline X.X by ended net will to approximately is percentage $X.X sales the adjusted model to approximately These November. out third of business product exclude million, done third all U.S. mix. Net for with in a base included third lower of the pricing approximately adjusted of third shelf-stable start million year's to volumes U.S. a quarter percentage compared net product we the comparable brand in quick base million $XX.X and sales commodity last net per percentage X% which Giant was [ you and XXXX. $XX.X driven try in $X.X costs, part Last decline which of of showed to a can or impact to $X line, to shelf year's were the in last of resulted XXXX. XXXX, largely Nielsen, we with the quarter positive sales housekeeping sales if by to million a The result results. In will percentage negative this decline as in by which of item. $X.X driven share. X.X were Green million. XXXX, net efficient already. I XX, stable Seneca points Green for Green EBITDA price soybean of quarter a XX quarter earnings XXXX approximately of September of X.X contribution as X.X% get or ] million in sold per decreased and by We so so decreased line, the haven't in foreign compared a of points, million the brand weeks with time which offset Base

gross the sold of the excludes decreased business net $X.X profit, excludes which product of XX.X% the third quarter profit, the compared XX.X% sales. sales. -- for $XXX.X quarter net profit was XX.X% during of XXXX, of or of nonrecurring third of million profit XXXX included and quarter $XXX.X the negative Adjusted of $XXX.X by which of $XXX.X the in to million of expenses cost brand, Crisco Adjusted third of of in the Gross the or third the and or cost gross sales quarter sales. million, base million expenses included of of or million net goods XXXX, third XXXX in Excluding impact $XX.X of negative was for during acquisition, XXXX. Gross expenses, was net nonrecurring quarter of divestiture-related third quarter XXXX, goods million sales. expenses XX.X% impact $X.X was gross net acquisition sold or the of million, divestiture-related X%,

to continuing regards year. mostly basket our be across modest cost inputs While thus with input see continued the have raw inflation to material factories, we this to costs in are cost and our increases of far

net cans and in third or oil, still of XXXX, administrative of Giant of quarter general administrative saw partially decrease X.X% to third favorability categories points in by from costs million, increase improvement $X.X through warehouses our the in of million, logistics, input productivity Mexico. million. some of savings decreased XXXX to XX for general $X.X basis general selling, manufacturing seeing costs are such expenses of as is sales, our expenses acquisition as marketing Helping and as divestiture-related increases, negatively and to Green as to the compared And initiatives $X.X of selling million, such and foreign tomatoes. quarter well cost as the most a expenses we areas and Expressed in pepper, that nonrecurring million XXXX $XX However, efforts expenses The olive and those black for composed an of soybean in of impacting extreme for factories. Selling, our the decreases some expenses continuous continued garlic, in $X.X and our administrative as inflation in for XXXX. cost currency facility and million our oil mitigate million XXXX, $X.X by cost elevated of quarter expenses of third $X.X approximately increased consumer million, third XXXX. quarter by offset the $XX.X percentage X.X% costs was XX% and and at

the sales our XXXX, decreased to manufacturing on The XXXX. $X.X [ million to diluted adjusted net million part Approximately net the resulted third XX.X% diluted $XXX.X decreased decrease due to like of our the $X.X modest in sales XXXX. of quarter XXXX, commodity in income $XX.X third in million in volumes diluted The the in unit. and touch described $X.XX from adjusted of by in adjusted decreased we in in Crisco the XXXX, primarily million by million EBITDA compared or sales sold adjusted to material third of the of of quarter now during by ] third to decline the and per of share, financing, results are impact pricing, our facility Net due by in decreased approximately on from of business across the $XXX business XXXX. earnings the $XXX.X in to XXXX, $X.XX was of compared for of income per higher quarter was driven in frozen $X.XX the with of $XX.X These year were foreign XX% net the the third $XXX.X in unit would lower cost relative in for average the to was Green raw prior per by $XX.X decreased decline As quarter XXXX. currency the in generated in driven and the net volumes of adjusted EBITDA quarter as due for aggregate. Specialty I in our negative product prior relative by share EBITDA excluding foreign to to $XX.X net Segment segment our or third the XXXX. X.X% third our EBITDA $X.X from produced had of net the or by and third to quarter are year is third the income $XX.X a were the $X million was in increase EBITDA quarter. Depreciation X.X% EBITDA, X.X% sold release. manufacturing of of primarily million, In goods XXXX, mentioned cost last to in as the our costs. Net coupled or $X.X The line XXXX, decline which third interest the quarter increase the divestiture line our X.X% vegetable loss with so year. the Net or goods to in sales declines was the million, of income last of share, third million costs, to expense largely Frozen related the the $XX.X our Giant of and Giant result the by for million primarily XXXX, of Green million interest quarter of of compared quarter XXXX. by to long-term decrease the impact million charges so on Giant increases Mexico. remainder Mexico. the we quarter or $XX.X quarter million share. Adjustments by down million of debt prior or period third driven the impact Giant our third additional a compared net which across Specialty a had million, Green lower EBITDA in shelf-stable amortization The XXXX. or was third decline third our period Green XXXX, to earlier, million ago million in quarter in $XX.X and million quarter of I modest vegetables offset products rates and the adjusted million for divestiture, the of impact $X.X the net the million of XXXX. or Giant of portion of in the of by divestiture in adjusted further the third year sold decrease currency compared was the million of of unit, on million that impact line, X.X% meals per to $XX.X facility the for or shelf-stable $X.X or of adjusted diluted year. due An the the Approximately $X.X mix. Meal the produced in product negative XXXX. shelf-stable of U.S. of We $X.X pricing fall. the partially adjusted of third outstanding the $X.X our quarter versus relative at sales, business of debt well third U.S. quarter segment quarter or quarter approximately recent offset of from the of million $XX.X $X.XX an quarter of or and line compared quarter we net vegetable of the quarter million to Green to increase additional was our the decreased product frozen $X lower modest million U.S. the product portion of

quarter amounts, increased prior third from was as million third increase to trade a combination for costs in decrease increase largely third Solutions quarter in volumes Flavor in Black in compared unit. business and segment product XXXX. the raw of of million quarter increase an quarter by was decreased of EBITDA the material the the or in increased spending these X.X% Flavor and due third an year. Net segment third driven $XX.X million adjusted XXXX, as such to primarily quarter the mix or the Excluding Solutions to marginally The X.X% and $X.X to Spices Spices XXXX adjusted adjusted by & XXXX. in $XX.X Pepper sales compared by of across the EBITDA segment $X.X of million in EBITDA higher The & garlic.

Now moving our on sheet. balance to

update we balance sheet. saw, As continue we likely our to

of Following our the the and then end the of this the add-on senior due refinancing senior million redeemed shortly XXXX after April an quarter, B $XXX we third note notes October our Loan of Term revolver, XXXX. secured remaining in offering summer,

Following longer senior maturities XXXX. any have our maturity notes our no near-term these closest moves, due we with being

in $X debt just our decrease expense long-term retail third $X.XX XX in which which noted details filings for press financial fiscal net have million quarters our continued over an by refinancing described diluted the interest $X.XX SOFR. our been guidance tied to reduce midpoint, rates net to point and XXX would our for a and billion food finally, that release X of of the in of basis $XXX believe challenges million reduce million. XXXX to projected as interest regarding At be quarter in $X EBITDA X-K our X% reflects $X.XXX a what billion and press to would the today in of in floating we the earnings volumes or sales, $X.XX share. guidance for adjusted revising quarter. We of to dampened statements the saw on consumption by sales to our per service business approximately XX-Q. And X% have now the our the are we A on $XXX is to final channels. net $X.X is XXXX industry-wide filed revised first our by million sales Additionally, footnotes expense base XX% activity, rates and of based part both net that Similarly, and basis per we point previously guidance to has $X to Further transactions annualized decline adjusted disclosed are billion $X.XX trend the release, similar consumer approximately we as earlier sales to million rate. earnings expected million XXXX, reduction to better approximately

fourth we line shelf-stable that As approximately to contributed last a quarter. year's in the Green reminder, business million last Giant net $XX.X U.S. sold sales year

to XXXX we $XXX.X expense interest $XX the to to million, to of providing we of for year and million to improve $XXX.X to expense full of trends million. million XX%, expense million and prices. first $XX.X $XXX.X expect million. $XX Additionally, rate for interest to million, $XX.X point, are the gradually expense Amortization we this XXXX, lap of XX% CapEx in an at of XXXX, cash stabilize of as do million. effective including $XX $XX reaction And while million tax expect, we guidance half fiscal Depreciation of higher $XXX.X consumer million not to

I will to over the Now back Casey for remarks. turn call further

the Thank B&G on you, closing, Bruce. In few critical is laser-focused priorities. Foods

portfolio future net business for base the the to as business trends for well of sales and cash future stability, higher to the of reshaping flow core key structuring plus objective acquisition improving margins First, as growth, X% long-term platforms growth. X%. Two, the

through X.Xx cash excess now and begin below we leverage divestitures flow reducing our in would the and Operator? of Q&A call. Third, to remarks, our acquisitions portion concludes the future. This strategic like facilitate to

And from Instructions] first Lazar Andrew [Operator with of the question our line comes Barclays.

the business might X by to second off, sort really to of sales I to untracked And I bit the now would in there about was that Canada. that you a factor, you better the some think consumption? stocking back, came you quarter, destocking a and of of headwind start obviously, I results looking sales. I quarter have in the sort not guess, And a consumption was occurred do time in do shipping in point better in was results up think implied. chalked ahead that second at Or sort think talked think? have base channels it you than Maybe of inventory data recall that

some -- quarter of that the we we quarter, XX% little bit and got that as business. In we reminder, grocery, saw a out maybe we've a swing little that, called U.S. second service of so benefit. traditional bit was We we're food had sales and our industrial a food but a than first into our less as Canadian called out our some we've service, just or So timing. and probably got

second quarter first the of made kind so sense. And and quarter

Third to some our told, the saw there from Casey quarter, quarter that and it think I inventory We impacted of for think what we down. sure. took in saw we've alluded it, been customers, we is, July key

inventories read and pulls. could We warehouse and

we So impact. going know that of kind what's on in

heard but from saw in consumption, others, Bruce XX%, July, that even really, relative little There's predominantly said, to food a can August. I channels. it untracked we probably we're you of service, track you definitely around our than but bit lot Canada, in a as in consumption. think I less mean other moving parts industrial,

So that really pinpoint to total. hard number to it's overall our

so -- total. kind up just the it I as can't I If that but add different indicator really, a a as of mean take just So would Andrew. of match together you and not I get pieces helps, take the that to kind directional that

if sort wondering leverage while, there stands growth or made being your given taking, of Yes. the were comments the weaker just to next that maybe perhaps in you and sequentially to take inconsistent, on with other nature? on sort was have below comments looking I right, actions side, I others half, are of year the on And appreciate not sales things certainly the improve then it. of blend a of business cost -- that for for to year. But stabilize first a could where sort that and any algorithm

we're I different costs mean attacking couple in Yes. a of ways.

inflation weakness also productivity us portfolio. any drive of to active have help efforts in the cover would offset kind improvement, first, I say and So margin we

of be those of X% higher year, probably -- efforts productivity of in to our X% ramping that They So are up. COGS and will net efforts. sales overall closer next terms

are reducing the we saw expenses in SG&A effectively quarter. You

kind on fixed our say, cost, we biggest and would So with reduce I costs our effort Andrew, sales. concurrent the and are overhead looking do some thing is at focus given lower have divestitures. an how we we of that the

do we a in to take We but only efficient more get divest our profile focused we with out costs, cost that more ways to also make activity businesses, will restructuring to as some look proportional portfolio. not sure

So of things that's one started that we've probably the evaluating. already biggest

quarter, least Got see certainly, what it it. mentioned base guess, probably quarter be, the curious environment? -- year. I'm be your sequential plays similar final in as see expectations, move but trying to business food to we some improvement of I quarter. I hoping I to in at continued you're continue third about how a quick calendar we'll you have Last why think thoughtful think fourth to we thing just saw sequential and out, through would that maybe the companies anyway, see are the some wouldn't we the to to trend And prudent at lot sort why of of least a just expect improvement

taking We're expecting of lapping some, probably in things, it's time the and these but process. longer not we're that mostly believe prudence every it's because we that much, recovery maybe some

X% between pricing X% impact and So Giant in business I QX. think projecting We're we minus divestiture minus Crisco ex the down QX. Ex are Green in said the base net sales down. were X%

more bit of high of come food the improvement. think believe little When I in cautious will a really, categories. the their back terms consumer of But of So we some inflation store we likely, we get the being of wake do lap how consumer those just impact year-over-year when fast the saw we're in do center in buying patterns. lapped the behavior changes terms in that in or

we lot When start indications we'll we're really are calling we prudent seen it just a I and But to start so haven't that point. that evidence I of date, think the to improve, at cautious, seeing of starting And third then some quarter. through out. this think being things that's

comes question next from Our the line Sandler. of with Lavery Piper Michael

that? frozen Is understand Is I that there And currency to it? vegetables. and the tariff out do a right. -- piece potential sure there any any to called about in thought just I pressure but you Have translational you do And guess knows, have have is just nobody You of And there? idea preparation risk? for I mean, some can make transactional? want thoughts any that you

Yes.

pretty X-year part peso currency. dollar foreign of over average this it last actually rate exchange for year, This strong not But out to peso. where lapped where number it's frozen past to a between was And in a normalized there. the period U.S. the Mexican those the that's transaction a the is and relative really months. where translation. Mexican products year. of Green certainly couple that we So It's manufactured to relative business It's or on weeks last and Giant. that's relative impacts been really stronger the our one are core was That

and impacted And compressed EBITDA. so that margins that

day, we're far we're tariffs, paying really going attention. the As election, election it's as not obviously into get to

volatile? it makes in And guess helpful. I a on narrowed interest rate [ $X.XX there line pretty bit like is just coming at where decent a just but an feel thought, anything the should That's keep you there eye Is on a tax of you've would particular of expense? in line, Or it you around window ] on to the is range. still sounds the say course, that you range and that more it, it's Okay. outcomes little of guidance, still below the have there sight the wide? a

Yes.

tax range, and If the expense, amortization then high to rate, and you the just those simply took and low, depreciation our our interest EPS you numbers. get EBITDA use the

line the of from comes question America. Reuter Bank with of next Our William

Rigby is This on for Rob Bill.

your performance private was label just wondering quarter? discuss in could maybe if Or how versus private label the I guess So you trends general? I during was

category. label I where factor. have at to we other relative category are I look and private I positions -- not really a as and we before, said places, it's really it's mean I there categories kind of developed some mean label by think we private

would the [ have particularly frozen I we strength So have issue private ], including the the the same that in from bit you of kind core vegetables, where look label would on of And is taking a biggest in at category, label, the little of business. seen Eye vegetable seen vegetable the share say I branded that that probably base think rest business the areas have we are Birds competitors. some I private frozen

of lot private than -- we we've been But in was And where premium-priced On or competition sides, stronger sides, a also be label it store, the have that's label business during kind [indiscernible] -- not fine. some premium of the some the businesses you really vegetables, seen on basic that [indiscernible] season private business you pandemic. has relatively sides that. have there's core --

The a trying hurt but honestly, to haven't They've from label. The actually is private bit, hurt business, ] the second the label of private relative little And label. that really it's hold issue bigger really position has lot Crisco with their on data. that oil seen Wesson inroads place vegetable particular. private us come we in more just aggressive [ in share in pricing a and been in has to marketplace

sort are really our at So that's we position. a But a much, really look we bit business, impacting from at. position. And lot not little Clabber competitive aggressive the a a closely. a #X more powder. standpoint, really Girl it two least not that's trying We of from us in moves baking so stay more impact big that do of in that those the track the to that of ones label relative how private activity categories it's really main terms private a about to label brand

how I may you going expect was your gross then on impact I your that in to any guess margins you wondering touched how And commodity commodity I you Understood. prices and guess forward have prices -- expectations margins. But 'XX? impacted

be far kind cost we we'll And but it get quarter don't On of input this as it X% year, quarter an its similar, the X%, like inflation that for results. guidance and have update input don't in -- fourth will earnings information more we're so this year. mind, we typically we feels keep do provide forward following the obviously And From cost our do we year we'll fourth are. something results. call, Yes. next standpoint, where

seasoning disclosed we few categories. right our pressure obviously portfolio, in that on earnings also oil think bit most is our offsetting seeing I little olive portfolio, seeing spices now, We we're pepper pretty tomatoes. kind right a in even may and the critical some comments that some and others. of seeing we're some now, -- which on But deflation and a in isolated garlic on pressure spices inflation are we're to what

X.X%. a there is bit would where X%, of those But big into. see we're forward other seeing what what impact. probably the That's said, looking right what But be the we're it's that's areas. just little probably areas and deflationary Bruce net are So we now,

line next comes Our from with Moskow TD question Robert the of Cowen.

on Just comment seeing. you remember I don't you're quarter. last the could you if that intensity wondering competitive mentioning [indiscernible]

So like increasing new. that's it sounds in Mexican. And also then you intensity have

had to entail does needs to aggressive order on Quaker be then you more business Or they once to also sequential hold You've ] improvement, these on a into year, cereal decline? would share? think about spending to oatmeal I I more continue point, So capacity. if some their categories? And there talked your improvement these those do to going would at on is to persists that you imagine to categories in this about because next [ question -- if on try become hot sequential restore your but also two business expect

risk you consider well? So as I that wanted to a if know

And sorry.

the Or about a shift? So talking are Robert, are you talking of you ebbs about and like context in permanent flows?

stabilizing guess would the I to you to categories as you and them? into more those oil. foresee guess. you given with And do still you I do I two against you is vegetable going its you be going growth? that question, Mexican Well, I'm do resources for, tough can that start do returning to I'll put it's need XXXX, in what Or resources. be that imagine Like still and head in tough asking

important kind gotten of that's play. be why think, you're didn't a But putting probably pricing businesses season, really, talking I that where think started it have against happen necessarily aggressive we August, they seasonal is [ in activity. where also think ] resources two call hadn't going issue we about, pretty we've more is which seen going. into necessarily I Westin our is out portfolio. Crisco in more the two just were to we a has seen those short-term where They competitive I

category and more is move pushes that the Ortega, El bit of that a business. going some will -- we with marketplace. On got into The into not happens next distribution. little has strong behind the who's Paso to pretty along inroads year. we this third the are putting some competitive time think Old And in with player we trends plans kind to that resourcing it we're made next just in innovation a year, It I as are category. good. money the into price We're and remain price now splitting I think not third ourselves Taco Mexican competitive going what we've made in Bell be allow to

terms innovation And next so in we'll think and expect in pipeline. don't distribution but increase back and I that stronger I to terms it pressure stronger pushing of our year, of be on

So those the to the effort more seen recently, we on and we've improve your competitive behind is, are relative and year resourcing expect next answer trends activity businesses question to to putting those the businesses. we

do Okay. [ prepare you hot Quaker effort to more for if something do And you cereal, need it? -- puts ] think against

with a We don't Quaker We just ]. in [ Wheat see ton Cream of correlation of don't.

Wheat but point of Quaker that over examine everything, substitution where is So will time that we [ see Cream price a I and of ]. lot and business, think, between don't

our that feeling that, some pouch have impacted mean standup things. small We in So [ we McCann's launched but and very by plans at that the a don't business other on ] we're about we be that. I okay might look really business.

don't I we're think So that. necessarily focused on

of comes with Holden line Hale question next Barclays. from Our the

two. had just I

pressure margin are quarter, margin other is that specialty that in or all seeing Crisco the some brands in pressure? the declines that On decline the or in lesson portfolio

sales Yes. profits. ], [ Actually, than down Weston more were in

Crisco Yes. Weston. in you -- sorry, specialty Yes, said

down in specialty. more Sales sorry, were than Yes, margins.

were about the Crisco's of that context when down. So think you sales in

pricing, we of is lower the numbers you the and in model, reflecting Some coming this of as kind see input quarter. down input in how is this pledged costs that us costs and lower sort of

the then pretty like first, for if in that thoughts And if kind of in the Does categories Okay. volumes on that include food was the are question 'XX I in And that guys also that brands? normalizing had grocery with longer-term wondering some I was you or service. was was, through know service? I food second half. your first specific just

in to at saying not it's point -- by from ] was half what see year would we're negative of saying to half, over industry That and it at to we next -- some traffic But we'll company not it's half We're expect food would going actually second the say of normalization saying course really bit first an first first projections, little this improve I look and see second Technomic of half. the the sources. expect positive. would the of overall -- between we experts. the get view. going on I a the don't based XXXX that the We're XXXX. But I we're the into if expect [ other we half

ISI. question from line Evercore of comes next the David Our Palmer with

we the quarter. I wanted in question saw trend view your -- few had it actually, a into a I with little down to a that seems multiyear different quarter, the Being that trends ask going a consistent on fourth percent bit this of on quarter.

going So it data. the that you first X%. and up a actually we like being lot see Is see the consumption base looks the trend better, quarter, sales as those into I would keep it that consumption same it? Do for the to seems quarter internally And don't reasonable blame way multiyear if just 'XX? on how that comparisons that be that into based you the like going guiding of first up first that case you organic in easier quarter you much be would

I begin consumption year, mean last the we think tougher see some first quarter trends. lap -- I to tougher that we in some

right the we're second what half. talking into get positive get in in quarters now. we We to do and the QX and better better and sequentially So are QX we expect first the or second the do moving that in than in actually XXXX quarters, we first expect about where and first

that see year. think, lap we second the do year. all helps. don't or we trade Hope consumer of significantly some positive last trends about, to see first and see of quarter way getting been we the consumer that flat in the until consumer in of I But when of seeing the that. We all half it's that we've down behaviors So some the terms these and kind environment to began of

No, Yes. does. it

just top X to where most some try to Ortega you're -- your improvement pursue or you're you or the of we to energy happening the should most -- touched X to you're think previous applying be just -- areas there's or that on maybe things that could the I was rank kind the and the see that improvement. answers, going tracking? of you in do I'm going one. you areas going be just

Yes.

one well, year. up about feel last the was quarter, is feel think, Spices up and we & number spices pretty I this good of line fresh trend the down. it's which the business next perimeter tracking going frozen into the just foods has & we pricing or It to because quarter. even relative It's the QX, of Flavor proteins solutions spread seasonings. come growth of I And the packaged up think, are store, now, and

the same ] McCormick a it, in got that going growth talk So is you hear trend positive good our we sales about we nice business [ and business. on believe business, We've there. have a but thing

there. launched good one. that's innovation number And some So we've

that pushing hard pretty one So that's we're on.

pipeline much innovation Ortega our business. stronger a Second, on we've got

sauce brand. got a lot things the good coming leader. Ortega the plans on market. of We've taco the We've are got into kind there. some on We're beginning of to We back new spend marketing

to push of things. digital got would we outreach and -- that shortening or that's we're business that about with and marketplace and it's sure think and -- that oil of kind our Crisco supporting making of the shortening peaking also recipes Mexican we're right strong oil, then all and that area cost relative of influencers have around the other on business making lots soybean and pricing I to the category So plans. Crisco, be going an sure we've the in

portfolio. probably vegetables depending Raman and new based are right right on need to in resets. into frozen we have we to on We drive new launching successful continue marketplace the the year. [ So coming Obviously, our sides now, focused biggest past the are next in products frozen gone we're on spring the the kind sauce And premium need marketplace. price well next areas the terms have in fall of launches, Green vegetables core and to coming our Giant are we're but of those customer ] points line, introducing this innovation that also and that and

businesses focused a big the those on, brand we're areas us, for are big innovation-driven that position. and with strong business are for us those So

patterns. year different inventories, or restock. home food they actions. also high So as seen consumer home just and they trends that's out behavior were down of their laying I a in of Like run stores, we're buying But terms think -- focused we've in reactionary where I what mean center looked to kind of from pantries habits the consumers this purchasing grocery there's kind income lot overall at inflation, a and improvement. and improvement their general in percentage not trade and see we've the the store them just of take in seen of down sizes,

start So strong we well. our from is need on where we to lap which I to think marketplace. we control, focus that But just we those brands what plans.in I standpoint, of some got as -- the big

Our of line Martinson with from Karru next question comes Jefferies. the

adjust a the retailers number that? July Is your for in Day, seeing of companies. carrying But fourth quarter? We that post you're still the Or something seeing reduction of saw to week slowdown certainly kind through we the Labor you saw snapback. one that started are

it's in week. them maybe September only inventory change our August, we're a the seeing saw whether of on and less I think this seen see that but up we a reduction of we're days they're flow probably early hold. We in the the we've even they're forcing seen seeing kind inventory We've that is through in -- And couple out retailer year it the of kind time putting and letting kind season to a behavior further or of -- carry frame. that forward, that few didn't depending reduction, numbers.

have management a to order force pull-through last but it's and kind we bit end, and as to bit upfront I it I sell later year, on kind that points. they throughout what our begin season at retailers. less a the If from most the seeing the a all that -- that out -- our nets you. saw stronger helps for through in may price more volume. an of But of But in Crisco, merchandising to may consistent play out just not the we have think in flow in we're quarter inventory merchandise think little they zero, not little out of pallets That's of promoted stores. So they they shift many they the as

the at Yes. slower And when in valuations guys then look is we what at divestiture the impact kind you terms when of the your look environment, of potential program?

the understand didn't Sorry, quite question.

look Just to environment, a like portfolio? seeing in rightsize kind you of to M&A your potential are on slow multiples say, as you contraction

Yes. No comment.

question next line comes JPMorgan. the with Carla Casella from Our of

you say mentioned redeemed you end, which I You is 'XX the for great. revolver where quarter after love [indiscernible] to notes that. Can the see pro forma that?

would purely, million is end I So we the just I drawn I quarter have third on do mean, revolver. what $XX the at the of think

press see in the million release of you'll Q balance that So our in notes. sheet the and and $XXX

from [ [ pure the that's simplicity just XXX number. notes, XXX ] to your revolver, subtract add just ] and the So

Perfect.

sounds from be in would source inventory be customer outsized guess like the rebalancing you inventory on typical, a then side, trade? it through it working which the would should capital go as quarter, sounds And kind be rebalance Okay. we cash inventory be rebalancing should customers it source quarter -- I of levels like an the the of this as but on final

Yes.

retailer our comment were example, it although we're was -- to near outsized reduction. that, BG's inventories, year, We're quarter, Last at in about This inventories the I the And be nowhere the see year inventory but we you'll earlier inventory if course behaving was reduction. more as bit all opposed modest think during us versus like-for-like. modest, third you the XXXX. overall, similarly. thinking conversation levels inventory, So inventory little for that a down are was for to around of of look adjusted for looking magnitude people

during a extreme as quarter we the during then the from course operations. the said, ] And usually fourth typically, can quarter. reporting of period. the business. public from anymore past, our our the inventory is a the was quarter Fourth fourth as not business we'll [ in reduce peak inventory natural definitely without quarter a is is in inventory you still of best flow cash quarter just Third but the it from reduction as Probably

pressure, lot And on how similar is how gotten price on you've back you to or Okay. a one already, meaning to this I renegotiate just because pass-through come does timing? customers their then questions [indiscernible], [ of know ] it versus in with of contracts the you like is cost plus and oil, but customers much Weston causing have pricing

that. Yes, it's about really less

lower aggressive. both I We price during it's year. going, and a of of more saw taking right. the a is XXXX, input in we and just bit costs. and price this They've We think haywire up, context XXXX raised price portion little been everybody both lowered price

we've that their down we've little costs therefore, came They've So price because promotional a we down. all reflected us. than on been in aggressive bit taken strategy shelf. directionally, should But more both as

end this concludes Ladies of the today's and session, reached we the have also conference. and gentlemen, question-and-answer

at lines your your this disconnect may Thank time. You for you participation.