The Hershey Company (HSY) 26 Oct 232023 Q3 Earnings call transcript

Greetings, and welcome to the Hershey Company's Third Quarter 2023 Question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Ms. Melissa Poole, Vice President of Investor Relations for the Hershey Company. Thank you.

You may begin.

everyone. morning, Good joining Quarter for for Hershey The Thank Earnings us Q&A Third XXXX session. Company's you today I hope remarks, everyone press has website. had the chance listen are on our which release to to prerecorded of management both available our and read our

posted transcript we of transcript of call. and conclusion audio have At we will the Q&A today's replay live In session, remarks. also the a addition, pre-reported of post a this

various during that the that Q&A session, and make include may statements statements to and company's financial regarding today's we are performance. forward-looking expectations subject Please risks operations assumptions These uncertainties. note and future

Actual can results events. differ from found release press be subsequent such company's A update to company those projected. of could in no filings. today's obligation undertakes on the materially statements and detailed uncertainties based SEC and these listing The risks

Finally, measures that the isolation for information presented financial accordance considered to GAAP. to that useful with this financial in certain the release. be GAAP we is presentation please non-GAAP information we the morning's substitute for provide included this as a in to are that intended press investors, will note results information refer not or Reconciliations believe in

and today will Voskuil. Chairman CEO, me first Hershey's to the CFO, question. it and Joining the and Senior over With Michele Hershey's President turn Buck; Vice I are Steve that, operator for

question first of line the Instructions] Andrew Barclays. from [Operator comes with you. Our Thank Lazar

things 'XX. since of that we I There's algorithm company have some high growth sort year, At confidence Day more of generating inflation. then. know the end long-term this Hershey's changed And some sort earlier Analyst for know the of expressed its in

behavior as the investment as behind spend stepped-up maybe more consumer trade spend shifts. talk some well what between for You need shifting consumer some seems and be and innovation about to some aggressive

And this key of was not end. and how rolling necessarily of at of on-algorithm sort if at seeing high maybe through, still can for all you're guess, if take this you 'XX the next basically, takes us be could So point? the an I puts even I hoping year, year some

Sure.

world to dynamic So confident got there, that about If adjust from we've the we that certainly, Andrew, those but on we we're to we're anticipating recognize think can changes. think top out and very we things will a be growth line good strength that pivot visibility continues we the with the very Gummies in a in that that. better the be position Sweet where is take to much of capacity not enabled year an fully particular, come capacity to been in able going segment. the growth, next we've to do area online. advantage perspective, We're

next been as Certainly, we driving levels Certainly, as benefit that's additional very innovation. came online to highlighted have some as be year of have overall well a has better Reese. area. Reese's? terms of is to helpful already, able That to that but merch. of capacity going us in Caramel higher for as we one business the that will to that seasons be take relative full helpful this and in advantage the us well being year

of also opportunities salty on we carryover We And have have some in in year. particular. this distribution Dot's from pricing course,

cocoa. really create related the will the first event From pressures the help to to a again, and some transition. that's a inventory will high that will It that. a have also inflation of that's part year. headwind we issues productivity in got But relative know and to with costs transient bit we've pricing S/X margin a commodity perspective, all-time have of in offset But some onetime that we

add overview. that? anything Steve, So to would that's of bit little an a kind of you

No.

the the have on a year. we'll lot more all you key think pieces. next time details talk, hit next Obviously, I we

follow-up. a just And Great. as maybe

that pricing pricing mentioned from We You and there's you've through announced. some productivity. and that initiatives benefit 'XX will already already flow know

Have think increases potentially the And announced put been other incremental the from? where pricing that or some are any be coming actions of market. the there'll cost there need sort into you of for given

have is that announced the incremental a how have We not the I marketplace increases. one business. best to always evaluate consider lot of we price and grow to any We productivity. tool. determine factors certainly Pricing mentioned

perspective, line the then from organizational business. we're processes better whether that ability and shape we it's P&L, productivity, productivity and really trade, to to sure also the and investments a in every our best more capabilities Now the look in drive leveraging activate item capacity a of we chain supply at media, make we're have across

line Our next JPMorgan. from comes the with question of Goldman Ken

just numbers to you're understand realize some next I details guess 'XX, question discuss that on there position a year. sales out much of year. I you up all you I little put follow Andrew's not have the and EPS very the you about of And outlook a hit us and and to question still I things changing for pivoting. the wanted in but high yet end given outlook next was necessarily bit [indiscernible] can that, are whether

just an your But the the kind guess, of really have little it's up kind of a a of of understanding context have given powerful provided that really as bit that come follow I headwinds in question to tailwinds because already. all I'm better since curious Investor on just trying guidance been some I come incremental get that Day? had how and sense balancing some of I important well. think I'm think, the fact a a the it's been than you have to that little get numbers that, more of that

lot important I'm it. to an fully on next and the take call. we'll a question, more It Yes, is address happy it Sure.

year carry a a standpoint, a moving some bit expect to right having we things the had upsides and productivity was Productivity productivity the key talked call, great there are little think, way. from I already. We the on and forward. we since a I about now progressing a about lot of is we're that are call, of one in talked that pieces positive even

As other to places and all architecture, in Michele productivity. regular look continue pricing we'll just at for variables, said, price pricing pack

watching we're the closely. the there, And year. a too, pretty there's then the significant been beginning change And of from markets commodity

as you of we so Michele together together get we'll as better environment. back dynamic able at picture on all investor said a a what But give next looking and time, we that about still pull be pretty we conference. we're to And said, how at, the right now, feel

of we my [ trade and deloads that you ] And additional follow-up risks are that customers? then about bit is, key talk little your some with with Okay. drove some happen of a the about deload, think you mentioned retailer. what Can the maybe as other the what

was and those, many a therefore, of pickers impact nonedible. which to from in we Yes. impacted And it the shopping store. This experience online their did easier have disproportionate also for we a because in really, was and saw that is pull what pullback orders key a back had into And reduction categories. had very we shipments a on one us, but consumers change both And other really edibles merchandising. about categories to this in their retailer merchandising, make retailer. many impacted for of was their share improve that the that and Confection impacted strategy fulfilling high

day. this, to Now out, this point want is I to really every related

this not did and Halloween and think impact you QX Holiday importance about of the as season. So

how QX higher seasonal. impact will we're of business that headwind levels our of expect We lapping So think first 'XX, part in we same be don't in do of the this given March. much a the where is

Max of line the from with comes question next Paribas. Gumport Our BNP

It First, It like I ability your help like for to the now. any it's sounded just wanted reduction. same commentary Is improve it other on merchandising could e-commerce retailers was to are reasons path? will think just the experience to follow there But sounds the retailer shopping one retailers and any the picking reason to retailer and follow? expect well. there up as follow other key on

I don't that. anticipate

I of retailer, others. than was many think the greater this at at merchandising this retailer degree much

anticipate So I that. wouldn't

know I patterns like so year. that it low so And then up been double-digit on Halloween, shopping less I year, in this there it's more was have normal, bit earlier the slightly Great. expectation. a shopping sounds a far. And know

get think make still you double-digit to key just to sure the So year? to I be low wanted I number, low can reason visibility but have one think this that still would that to Halloween double-digit you for target

Yes.

it you the characterized way certainly is correct. I think

year. We have weeks their in as seen from consumers season XX% patterns of about the concerns not last normalization there of X a are they're when like the last the does through in of were terms they shopping availability this October. year potential sell of

So we have product through. a of to still bit a do sell

weekend. falling on lot a of a Tuesday, Halloween there with will this And be sales

indicated building affordability and just a It other out little a the expectations softness was the season product decorations, some in seasonal from cohorts have Candy. categories, seen their have it deliver in costumes, bit there We that there. concern of to And season. wasn't in some aggressive are our participation, including But displays. was et The is to cetera. are for drive continuing we out we

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

Thank you.

how you of or to us can expect Just of catch you're maybe always maybe the give contracting. But hedging market months Obviously, a rates XX X from the sense rates. more think we relative you you market spot anything, to just if up if or see positioned I could to done, you've and was wondering do, I that? And, us anything it's even what, Cocoa. the on

all and the take And some elevated from where seat. you remains could on there pressure, how little pricing if looks any anything, up but believe cover than any question you that reason earlier pricing approach you normal a to Just different came bit to your that is announced source would of it? have I thoughts know haven't the it an

happy do I'd to be that. Sure,

Cocoa changed. the policies side, haven't On our

we referenced might 'XX changed. as on fundamentals here say, visibility and You a year today, full hedging locked probably in horizon have we years. less had that I sit have the pricing those would prior haven't in we

now. influences close staying as to we the And some high strategy, of is very other of that parts driven of And like the market. that the But we're pricing pricing. mentioned, right by course,

ways that of to as there's things Michele standpoint, Pricing pricing said, productivity there fundamentally and and P&L that lot the in pricing, other of part also our tool, strategy. changed be there's deliver to the nothing has one have also equation. there's in and a From is

nothing to And would in XXXX off give come guidance, and table. we'll be back more as But give the there's I say we so color. able

that some and market at underlying we'll some we little some between another still out have the way. that earlier of will every Cocoa we quarter is in this the extent that, by, But headed. and the we then, picture visibility, kind didn't will a normalize. of point talked But also the that goes there last We and what more pricing to divergence question. how aspiration about pricing thought get fundamentals, we an By and year, in on think play that call is see that have that we doesn't, inform it the bit it

helpful. That's And, buybacks. Great. Okay. a follow-up just on

been in has buyback buyback something saving you about are for forward? from do the M&A? mentioned Obviously, how you that didn't going there more You stock attractively up? might quarter. that ramp you is valued think the have any you a Is back perspective. How Or

Yes, agree attractively priced. is it you. with I

as role. allocation principles, so always capital we think plays And share our about repurchase a

calls capital watch it we're other to spending happening year allocate next It's say to capital. and on look can going and again, the not coming year how stock play you we're closely, talk as a to We at going year. year. we'll pretty I that price this of are big capital, a for off next what's we like will role. that's to continue And imagine going looking

going allow more other that And deploy is so to to flow to cash some uses.

keep we 'XX. that in think we'll as mind about So

Our Kaufman of with the comes Stanley. next from line question Morgan Pamela

you including as categories, consumer prepared remarks. in the mentioned seen across soften We've demand for chocolate,

pointed also the elasticity to But to outlook levels. limited You elasticity. to demand to chocolate relatively your for historically, demand return category normalized continue exhibited has

forward how talk you're year? going for demand you about in and next about can QX thinking So

Sure.

restart our potential category over and the continue So focus say have the price certainly keep equation, had a good value rates. years. in brands. our we're At know interest realization government of it we're our in for today. mind same and the time loan to that investing the value that the repayments, stretched, top of we continue that To our I feel strong. budgets are affordability We category some as time, We lot as consumers cognizant different on a be student business to is less about assistance, would and also higher

to needing difficult consumers they're make So that we've choices. heard from

making sure the terms resilient we And channels, points, So the of having to has some eating been buying right that on we're more value focused selling and price left. we reporting Food are opening SNAP that our in really some certainly know categories other equation are et but that. cetera. value than focused that they're on of households

very the to some there's continue and we on, is that for can levels business, and we've Feel continues where about in And and in a So connectivity business both with that's We we've winning great we'll coming the growth of the as year this of right focus to levers important. some cognizant innovation where during keep the of to deflation didn't there's Reese's it said, where think be Caramel creative. media with and the we other the year. drive, lot was consumers been next share of time the of stepped and media But also that big and versus that's continue our targeting we that we're as We the a categories. That consumers. go innovation sales that the that. engage ideal perimeter right are on some in we to up down pike. Seasons merchandising increase categories and particular, some brands seen is really much of piece where the that seasons, have a approach emotional getting our as those having relevant. to know inflationary

back in have some have category. So where terms places opportunities, opportunities on come pull some on capacity. it's core distribution be as the were on Salty to to to we that time continue now going that natural some short of to we the had to both as for supply the And items we're well business. able innate we distribution a them we in of And

drive to those places really on that of are the growth. some So we're focused

specifically wanted And these What segment? are Snack the segment my and for do in highlighted. just Popcorn follow-up, the addressing are about you Salty what the how competitive you, within pressures? observing talk to dynamics in you that And you competitive

Yes.

prioritize by was fairly we're I'd of overall. shifted channels. as know we quarter. seeing But decelerated some saying lessened. growth have are that throughout increasing them also affordability Snacks of Salty that softening more start the steady snacks. we there seen consumers. the and some So Volumes in that growth also to nonmeasured value Again, to really And importance some some held pricing And satiating

distribution So of look the at had are a satiety. focused we've bit focus particular. consumers in know as and certainly, certainly, we a our business, do well private that label look Popcorn, seeing as at our we're on And category lot in we merchandising as more Dot's strength little retailers on in ready-to-eat as some opportunities. And we Pretzels

that we execute ability sure lean that full in could on our really certainly, of with of have as had back advantage know on and just with enable on we'll we year, we're productivity headwind household As in and that to some those look inventory items next year, make next the to category. into be on We at and really we branded through go business that grow the to invest taking consumers. And working bit to will to certainly, for this brands penetration then and the needed we smoothly, retailers as in build a during to on that sure focus connectivity pulling QX, Continuing making and some QX greater very focused impacted in of productivity we year. us that S/X that. support a and move be

the Spillane America. of line from comes Bank with of question next Bryan Our

operator. Good morning, Thanks, everyone.

implied and don't from to, have more I should what I guess, fourth two I know, related the momentum of questions, reading the So it's the in guess, kind quarter? the and business, I we be guidance. In

you bit bit. the in So in talked help North you little if press shipment America on if I areas we in at a I about release, guidance, could Confection One little look Confection, revenue think guess and timing is, the a two them. touch

is what just XQ is purely the that or the So in want guidance however is to about revenue you softness it of describe as the you're timing in reflection a of revenue just way pull well had that is in is thinking kind if outlook. an every shipment? Or impact terms versus thinking at the that, it, happened day all held, being you're forward about

don't thing XQ. touch slowing I Steve, know, the if XQ on margins category of business than quarter versus lower So fourth is the maybe, can or in the you thought? And for same of implied then kind you kind more

for is a two touch of touch you just is potential things, So margin on you more can can helpful. on reflection be that? timing? again, And degradation? of somewhat that would just the Or kind this So those

Yes,.

start I'll So side. the with sales

said driver timing. and before, Michele the was QX between So QX, and seasonal biggest it

some benefit QX. We have timing seasonal a big at of at in QX the expense

has also not seasons. and got Halloween. QX maybe Easter is as factor as Holiday as some even big potentially. But big early shipments Now Holiday We've a

from of just factors. seasonal one kind historic of that's impact, a so We've And the elasticity. modeled

some that So on headwind and in, more into fully that a we we've saw in QX, modeled we inventory QX. also sales. of have slight And, coming

think full X%. I I some year, the implied are guess on QX as the would for the guide and those So say, I about drivers. sales the of around

of to be the probably risks a would I upside be side would of to more line. those but guide the persist, of would to risks likely it's say there's actions, some less than of on around mitigating probably some to high And got that lower side we've the if lot persist, to likely number. the if around top

we of sort reverses some in it side, On yes, benefits couple of that the QX. margin had a the

QX benefits had some the of absorption in the higher cost that we with So volume. you're losing fixed

has the that bit impact quarter part coming through little that. and pricing then in a lap difficult got we've also as fourth a more an less of So

in saw nothing just QX, but benefits So themselves different we reversal manifesting in those in structurally some of that QX, of QX.

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

algorithm A would think of as do largely to would other think factor that couple One it elasticity, in affect you're of like Michele, than other chocolate chocolate over one inflation to how is that snacks. prices the have categories. since snacking consumers about category you higher in? Do category questions, you that pricing cocoa, facing they not? Do would think, that when chocolate much make raise pricing, choose or is, have part have the please. would

Yes.

So people across snack the do choices of at category price And factor making in models. certainly, that we looking are categories. kind our of one in things cross is elasticity,

the So always case. that's

been inflation I think bit just and terms with past have particular, X on in unique marketplace what's the going the overall a years, in little in of pricing.

some different dynamics seeing there. So

then And quick follow-up. Okay. one

You the ERP mentioned related and for shipments half I first to, of think, some timing headwinds XXXX. the

ERP of said sometimes I you ahead you think headwinds, conversion. but ship

So of be shipment more about can, specific can the think first Steve, movement you little next to how as year? in a to half

when Sure. right, you're the And too, guide including the 'XX sales we we'll build of first. more the yes, But it's a about inventory more and give takeout. this talk in movement

do there's just some we like inventory here. build So risk Salty for advance to we'll mitigate in did

second that in second expect in then And quarter, out would to the we the bleed see quarter. mostly

some sales inventory and build talk that more be QX. And So or there'll there'll then the reversal the the some in probably cost costs. of We'll end profiling. fixed and some be about absorption cost on higher front higher

and that regular gets guidance. through take the of that 'XX to some more Some non-GAAP clarity we of give give but we we'll as out, P&L that

Salty starts year. it the we've we to out. and bleed this saw, what QX, QX, work build And out, that's to in what have similar inventory where experienced on we then

comes Carey Fargo. question from Chris of line next Wells with the Our

you as why on Is to I question So QX? kind thinking bit medium anything, Salty about activity is Has after a term consumption view term. kind trends One just the dynamic X it I be quick you're to more term. over of and it is near should improvement? given more promotional one a of but if guess more quarter know maybe can improve? the increased the just anything time category of QX, then specific lapping how slowdown? about on your category, why doing X you X- what's changed Just things X-quarter over well. better? really the maybe And trajectory medium changed get in the not just and comps, that

Yes.

presence on acquired especially we've behavior, be continues in in don't to category. as consumer Snacking portfolio brands that indulgent participating snacking, and Confection consumer have well I growth savory as having strong love I the with different views the very of potential. any very a So and have our leadership Snacking very and that engagement both strong strong

feel to continue about very those. So good

But S/X continue as trends QX. the differences QX to We'll relative will We out. talk bit about inventory we we and improving, see I in similar feel that 'XX. shipments takeaway. relative can't QX seen that to trends the really talk back think inventory some in we'll in I to we've built a because to come coming about mean, related be in now more.

that see a saw what we'll perspective, a shipment of a continuation from perspective, takeaway anticipate we QX. difference. But we So in from

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

is lot seasons the business from A your Confection on of seasons. growth been what call. how seasons? give in Confection a There's percent recent us in you've seasons in about how, has question remind from recent of much in won it you seasons feels And like sense you years. just years? can come Can in wonder on I discussion your of us a of

Yes.

Holiday. is varies year of business Halloween and Seasons on Obviously, by full XX% our So, quarter. It we and QX, XX% a between total basis. have

half back and So percent this much growth, bigger about then our X/X it's of proportion in our about of growth, year. of the a probably the same

to you helped how talked about question, wondering thinking a be an you're how And would Seasons Seasons capacity. ahead in growth by to looking about answer then just 'XX, previous

the about consumer you I'm seeing perhaps more wondering Seasons and have just existing consumers in respond 'XX? seeing how to you from fulfill what But, you're you're retailers You and that think would demand? the with Halloween, even to ability how how and marry

Yes.

very in So Seasons business our be will think we 'XX. solid

always your sell-through One on season. of key the next what is is the to year year current things anticipating realizing each

get to we through that be. see turns Halloween out need to what sell-through to So

have, need sell-through we able more mentioned about holiday. We on at but those in points, are where days, need earlier, feel to date, to obviously data but as We and strong we that have feel a that look a to good then a be we'll few have week based better afterwards. we

other 'XX shorter there thing impact The that on in will be Easter a depending year, the where is XX. Easter 'XX, will is date falls. March this And think, I

on shorter of shorter perspective, years with the creates just and large pressure won't little a which be season it's So long as a side, season. in bit a it as

the Alexia line Our from next question comes Bernstein. Howard with of

morning, everyone. Good

I the trends. that share one U.S. in they've recently. two know So in really market I weak short-term questions. is The about been chocolate guess

to do I against next you easy we're to later. improvement the hope turn think comp But improved that wait follow-up. then of corner think beginning going I year that rather an the to until innovation? with was And see sooner on start a that things to than have the have Halloween might really

short-term data are share of a from date, So perspective, our we suggests Halloween. winning to

we feeling good and about that pleased So with that. are

will everyday stronger of until the everyday driven need to to relates our business. some help business, that there innovation 'XX to it the see will we As improvement, wait really by

it's know today on adults how Great. impact going get all probably because a having there's GLP-X the big which not big question, I too follow-up, to And tell these here. early the to too out right drugs on chatting it's about U.S. do few scenario? then we're As How different, days. that how versus Obviously, versus full plan different it's unfolds it on is consumption adult thinking scenarios portion low that. are sugar early sugar today, now. But to items kids you for be control. that for you planning given about going

on a on many we're still regarding Yes, There's days. work the longer-term on point lot I impact impact early unknowns of potential is it correctly. think time. of there's captured GLP-Xs absolutely. impacts data all don't categories. doing We the so on a having our rate business coming future you've certainly think understand in It to the this believe and more medium- I know impacts food I the are And at out. we mean constantly those to adoption very our choices, consumers, material

process, innovation, observing, planning have increase all forecasting will We if a we consumer One in behavior size those providing strategies inclusive the and that of think those the companies nature robust we on of all GLP-Xs. over us try through as pack thinking be about are you adapt certainly, we're M&A as to of with brands past. continue sure our we're are right opportunities we and ingredients, of Seasons consumers around of and important our lot make have then looking of it's that will impact factor well emotional there what portfolio we as always GLP-Xs changes think feel and and role the and categories for about the been as as in to we that adoption. certainly, in portion a at time that looking play our of I they're do we for, potential they celebration, good thing think opportunistic whether you moments the have the particularly they in products, Joy of focused that the is type. And And the but have and

Our with the from Jefferies. of Dickerson line Rob next question comes

like is speaking candy bar prepared this spoke remarks and up, therefore, satiating just filling more price. of now speaking price it the Are let's kind you assuming you find to a right? Snacks you sounds in on say, Salty this, Is though point you guess, And products, also figure you cupcakes. at where previously, snacks on store. side, to bakery same around you foods. a the you're on demand? what commented on value [indiscernible] kind appropriate to an exactly more all fresh you're you're time, basically think commented I the to? kind kind of need and trying even Michele, on of mentioned out Trying of of the more to I'm perimeter the the I you've By you

Yes, times lower-income And for gut kind see It especially certainly, really up. heard that absolutely. it's fill, that bang where from we bigger do struggling from, the value what the buck about. And the consumers before. of we've That equation. about consumers focus on in seen are the and is you filling is of terms a in

that rice ready-to-eat Chips, filling, category yes, of categories behave are something that on aerated like society, popcorn. like Meat cake we're Tortilla where from more Pretzels, a So more things or strongly and seeing Snacks, a or the puff perspective focus cheese some

that it is for the So about value yes, book.

thing, other things consumption, of and did lot in some addition produce like cupcakes see did not a fruit we in fresh to there in was increase like the that we inflation that. see, Now

think as So value was there there I perception well. a

And kind sense. quickly, on Makes volume And moderation know segment. the especially then just you side. category in materially, the called growth. I of competitive somewhat out Slowed International Okay. a dynamic,

you seem relative somewhat at in ago kind something. what like It and of QX don't missing to almost when QX. of saw if and the it's I If does we I'm optically, in see we vis-a-vis the sudden numbers least know year kind

holidays. defined of by So is maybe maybe if you fully what drop in just could it's the shift just the explain non-U.S. that kind and

Yes.

holidays was there with non-U.S. India the definitely So in a in the later. little coming bit Diwali shift

Mexico. sizable the Not on resources our was that and small direct that had the maybe make talked as that thing beverage against efforts for to which The was business, decision are and a best discontinue in our about, we the big sure not but opportunities putting opportunities. We we've profitable made those best Mexico. to It small focused not in continuous business. other I'm our business Mexico, drink that of sure extensively we rationalization in highly

have that first perspective. started in QX. a X X a really meaningful line top points did of that And So to range the impact we from experiencing in

We year, minimal it an wasn't it for will on that a lap a be have profitable highly just a impact was but profitability business. impact because

from John Mizuho question next line of Baumgartner Our with Securities. comes the

pretty broadly the pricing an view is larger more To investment for more accruing label, though back there be chocolate Maybe even might the it's mass going more first sounds seeing come extent to off, unusual. an their Nielsen reverses or And next year share is we're wanted promo to it required think for the in issue larger longer? and is innovation a your a do private maintaining gains to data, be shifts, just to the respond I at premium that timing it's offerings. price because strategy as that chance what needs brands these forward? through of coming Michele. are in out more of brand pivot on basis a expense accelerating which to your you share promotion, the benefit. But market It

able The capacity had So talked share as on incremental market drives impact going overall to Refreshments for be a of the at in with And merch. Sweets. within Certainly, and growth mix look about, share potential we added we've negative Confection, innovation to addition us in with the category Sweets. we've more the from that business unlock to helping we've the in innovation everyday faster

of helping terms to very helpful going that's be promo. And in so

time, have sure retailer And then of that make same account. partnering that nature the we to and working strongly and that sure the right making into expandable category the very we're also the direction sure to make take to of one we some adhere recognizing can we're impulsive their at and plans that through our

continued we have invest brands, We to our forward. continue to and will in going

time, substantial we're in this anticipating very a I large, at that point say change wouldn't in investment levels. our So

And as focused we as trade we fit. holistically. those also between We in have and on strong the be as we consumer media levels are see to on as allocation between can sure are and it trade open always really that possibly look strong adjusting is margin, the making we

a of label, huge bit to it the continues in increase in but small a big, increase, a of seen an private premium, frankly, be haven't very We category. part

And just merchandising adjustment Okay. just that retailer. guess the line I of at the thought following with

this I'm and then benefited this who from capacity and of from for your It You you, curious ahead importance and Confectionery, for own retailers ramping but is Do what, decision surprising but just seems wasn't sense odd pretty mentioned merch year. confined benefited know have mean, profit Confectionery of sort I change? category of a next adjustment? the sense? given of any which I you that innovation like just how valuable the was also sort to Do don't have I holidays it to the categories velocity. mean for happens this you

it no really So benefited, reduction overall in category an because was merchandising.

focus So a products. open to also aisles and a from omnichannel more support and on of picking more was of for experience digital it consumer enable growth and the of business

offset it's jointly there in certainly on make trying the impulsive an counting closely increases and is consumption jointly be sure category, are on right plans is and to velocity as drive to expandable we everyday all you It And mentioned, to we enough drive retailer we're profitable. the to partnering to programs the that. counting and really highly have opportunity. So

to that. continue hard we drive to So work

comes next Our from line Jim of with Stephens Salera Inc. question the

Thanks to of of around know I the you value the there at wins for Is when attractive maybe in for table? bigger Can it consumers. large distribution proposition in. go have of us And that the say permanent kind on like that some proposition does offer a you a commentary can distribution, you help accelerate retailers gaining you lot squeezing to very kind concept? dots value club? this

that still mean distribution. because us terms building we business in in Yes. the of penetration big process nascent household it is the helps household penetration given I Frankly, on of the household I quite brand. are the think relatively

distribution on And So have to some Club that. continue overall. we venue great opportunity to is Pretzel a always the business get

innovation. held Sugar, and opportunities Cinnamon well. introduced pretty to we for despite have continue well which be select that hit velocities been has up in by So those We the in some And also the excited a increases as marketplace we that excited distribution. great have

a been if Salty income maybe it commentary premium premium then that it offer be elasticity of Dot's given What offering? consumer to more of seems that you that What Is offerings. it that is some the is the is some from demand And offerings? they've more Salty compared their of Dot's? on-trend other to about just higher really the just seen kind have Great. some or they seems of core just some insulated can maybe able to other in we've insulated be

and would filling. of premium think very And a mean society And some seen very satiating a work is are It's is delivers of that is I biggest Yes. it product from product. on very the points I very consumer the it the it our I a strong say things high, price value differentiated of society. equation the with certainly therefore, though snack. even we've one category. It's

like this There time. turn are comments. closing would back floor you. questions further Melissa over at to no I Ms. the Thank Poole for to

in your Thank you us all morning, so catching and a day. look coming Have up with days joining we you much of rest and this for the forward weeks. great to

Thank you. This teleconference. today's concludes

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