Lancaster Colony (LANC) 2 Feb 232023 Q2 Earnings call transcript

Good morning. My name is Anita, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation Fiscal Year 2023 Second Quarter Conference Call.

Conducting today's call will be David Ciesinski, President and CEO; and Tom Pigott, CFO.

All lines have been placed on mute to prevent any background noise. completed [Operator remarks, Instructions] have a will speakers period question-and-answer Thank the their there prepared be After you.

Relations Corporate And call now and of here conference Colony Investor Finance is Dale to Ganobsik, Vice begin for Lancaster the Corporation. President

for thank Colony's XXXX Conference Good Quarter today Year us you everyone, for joining morning, Second Call. and Lancaster Fiscal

XXXX. subject discussion morning to upon subsequent may based Securities subject a Harbor Safe the the risks this that include Private are and are materially, no statements Our events. could results provisions Reform the Litigation These number of of cause obligation Act to undertakes these company to to forward-looking statements, statements and of uncertainties update which differ actual

in the filings note this and lancastercolony.com detailed SEC. Also afternoon. replay the audio available the website company's will these discussion on is A of be that, with later this risks of call and company's archived our contained uncertainties

happy with For results. today's update an Ciesinski, we and for our of and then President some call, will Dave will respond quarter. your morning. financial current Pigott comments regarding be the will outlook. our the any and the to of appreciate again, your share our participation remarks, questions. we'll overview strategy highlights provide Once CFO conclusion business Dave the of prepared Tom then begin At CEO our to this

Dave? call the turn over to Dave Lancaster now Ciesinski. and I'll President Colony's CEO,

ended $XXX a everyone. X.X% our while we sales fiscal and XX.X% good million, sales operating to consolidated $XX.X income In we increased and record gross both Dale, year XX.X% profits. be higher XX, report for which improved It's to Consolidated our December million. pleased second morning, to to and results grew $XXX.X review you quarter, profit net million, fiscal here to quarter were Thanks, as pleasure with second today XXXX.

to offset sales the quarter actions inflationary second taken segment's net impact of costs. up reached pricing the we including million, favorable have Retail $XXX The X.X%,

Beyond by licensing garlic the New were driven of bread, Bakery our gains program. and York success pricing, sales frozen continued

of incremental line sales from sales led exit X.X% XXXX. Retail licensed with Buffalo fiscal in to Arby's elasticity The Arby’s as Wild due Sauces. product sauces price by profitable in segment the to growth in the was up of were period, the pounds launched and Horsey volumes our anticipated, some recently Wings impact along less measured and decision

Sister XX.X%. the data second IRI for showed category Schubert's XXX share refrigerated our of XX York very the the dinner of share to increased of category Marzetti XX.X%. dressing performance to brands. share garlic marquee salad category the leading points to Bakery's points strong bread points basis quarter And for roll added frozen frozen grew retail leading XXX New XX.X%. basis

pricing segment our actions, which partially In our line share summary, brands, core for from from offset results top Retail elasticity reflect our price the strong product licensing line retail program, were and rationalizations. by contributions growth and QX our

volume along our in driven was for in segment, net quarter, exit volume and our Foodservice of national select some product fiscal over profitable sales decision XXXX. driven mix customers In down with actions primarily our pricing our Foodservice lines to gains less by accounts. XX% grew X.X% the

favorable or freight. pricing actions to to was inflation raw to pricing revenue financial experienced year. negative supply in our chain PNOC our In in improve level we of of prior gains experience we last some great ahead, performance. net the to continue our intend for materials, which we've continuation our on a recovering trend management of growth that productivity began we versus commodities and we QX, the high made This During through the is quarters and the of QX packaging year. focus are in said, progress where That PNOC

I Tom, contributions extend and to to over their our performance. my to entire sincere and financial all Colony improved it would turn ongoing the team, commitment I thanks like for operational Lancaster to Before

I'll our now over Chief quarter turn call the on second his to Tom? results. for Tom, Financial our Officer, commentary

Dave. driven by growth costs, improved offset Overall, quarter top results for inflationary reflected the and well the continued Thanks, fundamentals. that pricing bottom-line actions as as

Decomposing First percentage mentioned, increased percentage $XXX.X net impact the revenue the pricing sales points. consolidated volume to in This by growth both growth,XX.X driven implemented by actions, driven pricing, by were decline points was Dave quarter four XX.X% was million. successfully XX.X% of segments. the

pricing PNOC on in the gross in profit higher net of profit $X.X increased million. calculation. or declined both reflects profit or million impact commodities commodity basis to by gross Gross dilutive percentage reflecting costs dollars favorable segments. the X.X% $XXX.X Consolidated XXX points, and of margin increase by The pricing

will fiscal as we QX you PNOC, XXXX, run-up recall, in had If the lagged rapid in of we negative costs.

losses. continue recover We to those

in pricing While our quarter, our about the commodity performance. year inflation offset prior of the XX% was actions resulting and this the approximately improved shortfall increase majority this

reflected our also areas. fundamentals the improved first with results three Consistent quarter, in

our First, and lower have SKUs. segments both of profit eliminated businesses

scheduling Second, quarter. down the for planning, quarter year through improved versus the was execution, factory headcount and prior tactical

operating year significantly gross and days of helped performance. flow with is mix to more inventory items aligned are inventory and environment, our profit hand down Third, better improve on a with These demand along cash quarter versus the improve prior stable and trends. our predictable

This quarter Ascent, X.X% Selling, in Project general current year the on year versus to decrease quarter. expenses million initiative or prior in the $XXX,XXX. ERP expenditures million and our $X.X due primarily totaled lower for was declined $X.X Expenditures Ascent. administrative Project

from benefited also in and fees We timing-related changes professional lower consumer spending.

restructuring the these primarily reduction SG&A year quarter, XX.X% the the in prior In or increased a costs. Consolidated in of we change to operating was a had charge. consideration contingent and and million, income to $X immaterial. growth $XX.X net impact gross profit due The million items

XX.X% tax year quarter. Our year remainder our for XX%. tax rate estimate the be versus XX.X% XXXX the the of was in quarter We for rate prior fiscal to

The was $X.XX. $X.XX share quarter primarily to driven in income. growth increased, the increase Second diluted by per operating earnings

quarter property second the for million. expenditures, capital totaled in additions to $XX.X regard With payments

project. of are XXXX, year Horse the fiscal expenditures approximately This of For the million approximately total Cave, million. capital $XXX we completion for forecast expansion includes $XX forecasting

In addition, returned also to to funds in our shareholders. business, we investing

quarterly $X.XX on prior cash increase dividend of share a represented, X% per amount. the year from December Our XX

Our XX stands years. increases enduring now streak of at annual dividend

strong, financial as free we're position debt Our $XX.X cash with remains million of sheet. balance on

pricing up second So, growth results by quarter commentary, to wrap my offset driven significant served our commodity reflect to revenue that inflation.

stable to well operating continued the company the execute addition, fundamentals environment. a in In more on

to turn closing Thank I'll back now it for remarks. Dave, you. his over

Thanks Tom.

our ahead, support of Lancaster Colony growth look and three our pillars strength operating leverage combined team, accelerate the of our the reduce we our business with As simple our and strategy our our to continue core and will supply margins; three, to number grow plan one, simplify licensing. strategic two, sheet to M&A growth; in expand chain and of cost to focused balance core to our

fiscal our and Cost Retail our our but benefit some increased a the from to expect inflation will we headwind volume licensing the segment growth Foodservice our quarter, savings to we cost for while QSR from sales program In cost. expect pricing actions we expanding our in results, customers. remain offset of initiatives third anticipate continued financial

and in in year, our SG&A for quarter, will our increased consumer levels also Cave, up In Horse back the will including we investments sauce dressing the Kentucky. spend our continue of costs reflect facility production third fiscal our business During newly the in ramp half higher expanded section on fiscal to of promotions.

also We impact our business. economic conditions monitor on for continue potential will to Foodservice any

like initiative, I'd on an Project the Ascent. Finally, with of our to you ERP provide update implementation phase

successfully July Wave past we completed October, shared in And implementation. we Wave previously X. this completed As of the X we

days early our Horse the implementation, in new the dressing sauce in will which of system. now Cave, of wave production are We the third to and facility Kentucky add

Ascent. are cutover important largest our plant is is as the All as down of to the we As facility completing many forward will implementation this aware of in and phase, manufacturing for phase planned Note four that this of the this process. have network. during days part facility we look proceeding Project you

quarter reflect financial incremental third the with shutdown. temporary will costs results associated Our this

very happy that ongoing might efforts Operator? strategic our This on answer sincere for this we'd questions teammates I like to thanks my to you to prepared extend initiative. have. for and would my important be today any their remarks concludes

from today you. ahead. Wolf Thank first question Instructions] Please with go King. Andrew CL comes [Operator Our

Good you. wanted to… I Thank morning.

morning. Good

On improved a for volume they did that like And down, reduction -- of in nicely your retail. us the versus give a Hi. net consumer lot but the last a the margin? or volume that gross promotion particularly as of there what Thank more is was improved. the you. sales other it did accounted I but -- Did on that improvement still were saw I down, quarter marketing And how volumes could direct-to-consumer the quarter? items. And evolution little for or promoting? you include -- mean, detail this trade about sequentially was your impact spending that

Yeah. question it It's and take great a on. head I'll Andrew

So had we're we through, discontinuations the to And spending way was discontinuations flat -- period the in down you fact prior was that volume during our our continuing X.X%. trade period. essentially on performance the for versus adjust period our the prior that if work volume

we when perform at New sequentially, We line them remains our you strong. in record Schubert's elasticities. posted Retail shares very pull think Sister Retail business in shares our continues it and apart Texas much and look record you and as to Toast it hit Foodservice, And The I'll I York business with across in well. posted

they competitors and And Our it's unique licensed -- the are direct told the a sauces on don't in do shelf. Marzetti we've well. dressing to necessarily have the bit brand before refrigerated continue that you

price there performance. the So good feel we volume in and the vis-à-vis have very the that magnitude the of we about increases that's

Now to swinging Foodservice. around

what seeing would optimistic -- that we're we're again say Here about I seeing. we're

you others our that across of give is were had performing space period. when was was a whole there that we But also quarter. was preceding optimism several And in first strong. line in them Chick-fil-A are Olive Retail reflects our elasticities it that in us that. measure a to at customers We some traffic what than little at that customers, in were strong. softer. Bell flat our better the of So And growing was was the look the marginally But Taco in expectation. volume look Garden were if among it with essentially continues traffic. the industry mix

back-half half. you consumer, we've thing. loaded, that same throughout have the optimistic our LTO year-to-date. guys I planned We would And the about you as new have with the that's are back this remain shared And Foodservice, in we really, cautiously in period, and fiscal items the we tell activity

think the year. line to our expectations net-net, is volume beginning than we the our at up better slightly So holding of in

explanation. Thank That you. was pretty a full

is some there? there there there Cave running -- obviously have margin there regard I'd in whenever an impact Horse call quarter, about things to are any up that on running? gross specifically, future any getting in with the to to the Is sometime Horse too. And... Cave when that So and in disruption like But that particularly will was is know the out

No.

ahead. Go Yeah.

is So Tom. this yeah,

did quite natural a over the got in the of On the obviously, bit one you million million on And basis of quarter pricing, of we've costs a when $XX $XX things our see put P&L. and and get XXX higher dilution points margins, inflation. of year-over-year inflationary of we you commodity

that's year-over-year, a key So driver.

and dollar environment. see that you're profit higher costs, despite basis some able overall, resulted we Now the a grow challenging were it more commodities to and But much did a higher of egg this dilution sequentially. of in offset sequentially, we costs our other those gross from couple seeing still on in

if not Andrew, if expectations go the Horse in in better. very has on I with start-up line maybe And much Cave, our can gone

servicing expansion for intended it because We prepared there And a the We're been brought demand it's I a in taking seen several cutover. new make of and us to going sure has to But went that that has the So the it the as to up of capacity with I'll surge new had team out in and understand gone resurgence has comments, done section. we I and up a SAP that that's running keep about a others that and and said we customers period Buffalo new up. and this down In facility be wanted factory that new talk enabled my comments, It's we in Wings Wild in to up horizon the mentioned exactly on live. that planned. fantastic later It's we bit were job. down that that. we've that you out and bring with items that have in because little blessing demand. on we maybe days

queue the in back get I'll questions. Thank lets explanation. and that some for you Thank ask you. others

Andrew. Thanks,

ahead. with question go comes next Holland The from Please Brian Cowen.

the your line. the sales that's start morning, in strikes with sure maybe little comes Retail, Yeah. the I If bit I'm -- Foodservice from? net SKU aggregate still of that SKU I Xx a that Nielsen segment if grew top sales. just could off you me inventory of be pull-forward It if more byproduct of were the in delta Retail the understood where rat there's demand from side, not at was but reported Thanks. folks working gentlemen. impact to on on rat, Good or track just about could if Curious if any? there which

Yes.

So you're right. exactly

to else. can't we a there. shipping speak just generally, stronger would say, look necessarily you to thing And fact that's the If in just a of or I have Honestly, was something it we we in than what was consumption. been it timing -- at period. scanner whether bit it's on it's a consumption, going But shipped the deload

As Retail are for points the discontinuations that we the of mix. shipments look several in magnitude of of in in alone the terms that on as on well accounted growth

Yeah. XXX the year points. is extremely over And think little obviously basis consumption terms biggest on the we where peel revenue saw we was our well versus prior if in it back, building the were the impact, I really then you some product. disparity in shipments, period licensed doing still Chick-fil-A's a inventory. of I think Brian it Retail And

be may seeing. So that what you're

the non-track other like Just a the lapped explain -- factor way program that? the whether in might delta anything you you to a be anything one lapping that about or be would What whether or channels curious.

No. really. Not

Okay.

the Okay. margin to go And then back gross to again. component

sequentially I reconcile growth. gross profit So, margin the didn't negative understand and improved some gross to positive improvement I going it PNOC guess is dollar convey year-on-year. But trying to or mix. either what to I'm understand from I

out start-up doesn't set understand. forward is we'll dealing of there's maybe what something it there And I path think -- just we like call sound about again the upstream level there Horse to if kind with and Cave start what downstream. you're based were just to then to for costs material. But both so just just on want and

Yes.

to margins our So, when particular higher in you our when our to peers really and up inflation look percentage the And you this exposure were in lay keep at dramatically. is the soybean mind than all lot eggs, inflation commodity in a due quite oil. quarter,

it, you when say in so you going dilution $XX price factor the that that million natural And to I'm okay, P&L that and add and got occurs. to for of inflationary cost you've you

up Sequentially, as tomato and up oil I that we eggs then were mentioned, soybean had it sequentially really some was was and sequentially. costs also the

the you're despite why that's that So, positive PNOC. dilution seeing all

to and percentages As grow you now to try year like we well. we're forward, QX are go sure definitely going as successful we margin prior to gross in make our versus certainly QX feel there looking the that at we're

stabilization if we until get certainly -- come moderate on this -- dilution. have be of we it's do the we're -- certainly see where of the quarter's percentage a mind impact. Certainly, some the this we with some dilutionary commodities point and it these in down happy And will keep costs, and performance. gross profit But penny focused growing to sort of

of If just kind commodities great. we component. That's Okay. double-click on could the

little first backwards. looking bit guess I a So,

XX% XQ? acceleration that magnitude at don't like this inflation I the fingertips, was in something was forgive -- me my an -- that inflation cost input of you said that this you versus think I quarter. faced is Is have

Yes. Yes.

Okay.

It was. And--

sorry I'm Tom. Okay. Go ahead.

a run-up I Yes. unforeseen egg said key was like -- sequentially was driver. And it it was -- in costs the

One now. what question a Eggs of two-part there's your calendar then flocks like. on if that get XXXX. we are maybe looks guess forward you're what from that know by discussion where relief. I some I we standpoint? right Yes. to hedging improved the based forward, -- a are of here. that roll are don't But kind they are buying capture half second you could maybe And a some if in Obviously, Maybe cost position

on and similar of prices hearing oils And we're kind coming news those then because encouraging the dynamic a down.

don't I there. or you Tom know if So, have commentary Dave

Just now looking moderates of you're think get at we here. inflation a sense right trying from to as it

So, have are eggs, hedging and and area come jump maybe it's where add you, to color. I'll in then With we an more On in Tom grain-based remind to hedge. eggs eggs on whole difficult buy on our agreements.

able our move eggs. I to been So, up nonetheless. as grains of there say but take cost more somewhat do a modest we've so inflation down impact, the would and

things we've protection see we're formulas do and pricing for to that What make But where we to forward move, in which and buy the to where you can to want it oil able sure hedge cannot we against yolks we protection, as I to is and is like we're yolks. been price of bring to on hedge along. second passing our continuing XX-day me continue also brings those those eggs can some which part even then that we get

they're the we Foodservice flight, So, have whether items products we on particularly for gone these of saw in they're have eggs where that actions heavy are consumers areas that Retail. whether that in pricing in -- or this into exposure period, or

I that. not I being for of forgive very me of and me appreciate today to someone Last questions, else asking get for in on. like will Hopefully, model-specific the color. hear typically one and to queue some fund Dave the the strategy opine some

to Foodservice have think driven as all look expect further needed at so, there you -- maybe are you there this -- where if you is you more? point? at or where you And look is is do it Do that take Retail? your to in that as at pricing -- got But you've expectation today,

Yeah.

number of flight. are in So Brian, a Dave as actions mentioned, there

sold been in. of those have All successfully

we our feel cover to segments. price -- so both continue -- this feel we good to ability So in about to

stage. retailer to not a get So us pushback this of terms able the concern for We're pricing at there's in in.

As Dave to there are run-up us. actions mentioned, more the in that flight help with recent additional are

that add Maybe I'll point. to

to the talking year where costs remember exceeded we In lagging in you continue PNOC time, were were last we recoup. expect positive, helping coming forward. trend the inflation. about And fact In we our If were pricing actually PNOC us QX, period we pricing at this were again. this was that that our that positive the

we where we're margins. even think the eggs. want Brian And I I forward. not in more of things is it. even on So this as we been like pricing can't if positive short-term in convey But terms model were for seeing PNOC the run-up And or should pushing the hedge have it's to come it we're it we We seeing can shift think that what we're through. in we're for

feel we developed. muscle And like So that utilizing is we're it. fully

there. a everyone. It's you. it I'll Thank good color leave

Brian. Thanks,

Brian. Thanks,

question next Company. Todd from Please with comes Brooks The Benchmark go The ahead.

Good Hope, everybody. well. you're Hey. morning

morning. good Hey,

morning, Good Todd.

look up question, following for or even Brian's last and can't continued -- just accelerating price you question talked sticky and hedge, out Quick where you'll on either spots. about try to Dave and if you go at you inflationary pressures

Foodservice be across you forward pricing How if the the Whole channel that in easier feel get Foods pricing versus segment? on And suppliers shot back you're about the to vary segment of going elasticity Retail does seeing? bow channel, early will willingness take by in from, like do needed already, now? push think to How the trying to do to it kind the Retail relative that you right that

I'm that a our of our at in in this Brian early discrete looking in me going continue very quarter shows quarter constructive, that and which about effect conversations in be the actions pricing end second into rather are -- is fiscal sheet very third at -- pricing to Retail a Foodservice. dozen our on both and Todd on now.

know little back that those that where same. all with line I saw on clarify in the don't they're want Retail doesn't And a and Foods' these sold conversations data at. I were what data are we're things to but that it announcement bit remain looking And on Foodservice I have had go at the commodities. on do up Whole looking And through. necessarily conversations

true through But material inflation tell inflation is, I material we forward of commodities at as the packaging. their they're some of What maybe lower have And may were of packaging. albeit, buying. even, you would And raw raw we categories to the eased that's X.X and and year. things off on and We're this and years see looking high we're in particularly remainder just looking that's XX% continuing ago inflation discrete rate. look at at XX% a on that

see is The areas point by but that particularly remaining you some modest see that what may like So some is factor you And we're in delivered any really that need pulled back being on where basis still very, the would pullback, things the beans. I high. areas continuing may to to which overcome total we inflation. when board have cost price very

clear. That's

point So be we're because intention our to this And seeing on basket prices, inflation. have would that. back not we We economics we our at the don't were roll net-net net because of support don't market we wish relief any beneficiaries.

add Great. Can then just.. Okay. a does that follow-up I

please. Yes,

year. I of And talked last time of Tom, I this kind fiscal pricing was the waterfall over going to about think course we

digit Retail. actions digit Foodservice anticipating were half in with running mid-single I high-single change for to the taking at back these think How the year? and maybe looking that be of we you're that does

Yes.

So question. excellent

more digit and So very Retail in we're high-single Foodservice. in now single-digit high

initially looking on these based anticipated are commodity pricing recent had more we at more than moves. we So

And strategic in question a just then Great. Cave. Okay. I'll slide more Horse

come go into to ramp in additional that's and licensed where back as We an How with owned we far that walk unlock go facility? pack flavors. co-pack with as maybe some producing long process volume up out that do full larger facility, unlock product does through does opportunities us other out capacity the a maybe you maybe we the of Chick-fil-A and sizes finally online? then take fully? ramp? where maybe programs running and that come ramp does expansion do Horse And Cave Then – can timeline? we're it Dave How that Now

Yes.

Love because So about the good a about questions across gives chance line business. us the of top board. strength these it of the talking talk the to

first maybe on factory in focusing the So just itself.

So in it's our literally of out the much a earlier very thousands producing of really plans. of facility BWW. seen has fun line us the spike start-up that And enabled to I demand keep cases now. We're up gone with hundreds that in mentioned a of with we've on sort

to as two in that TikTokers. million resulting has I been what that product has meet Horse in we go. that sauce. over in know a probably the surge fire included absolutely Wings most fact demand, forecast you the well enabled excess demand TikTokers XX case has of and surge but Wild views of the aspiring of a I been have Cave garlic And be one in up don't big in and and had running meal aren't that and on to us claim for in that had a point combined we recipes parm those Buffalo created videos both

really for it, all as into and look Retail you new Todd meet in when remember, demand full there So it's to need we intents items. March the because our we we purposes go and rollout it's our of out forward, running if it's and

mention Chick-fil-A. a just energy & the Sriracha have lot large we Spicy more of that's Buffalo whole the includes the on Wild size That's that the and also Sweet not item the to caesar sauce, Wings. for behind barbecue Olive Garden It and Chick-fil-A

the you, now has tell fast, just our how the that thrilled just look is item. fast would to we progress high team made with that there. view as run how is is high I'm and I So And

So story. good it's a

sweating And producing just well, we It's as harder. out there. forward Retail to on And it's product. look it

how next last to we in-house. into back of down this through expect factor bring agreements we and that year of virtually to question that the and this all to those volume remainder we're degree wean which honoring have co-pack? your year then does was on but those the in To Now co-pack early

we Tom, a just dollars it rate rate. and we're from margin benefit versus co-packs what that co-pack I in kind on than margin of think of that we follow-up if more a pass production I'll back bringing margin production? about along. But talk know as Just – volume we in-house is type then talk

Yes.

about being points of So basis a XXX XXX we impact dilutive to talked throughout. it

So over that time we'll get back. dilution

certainly be catalyst a we will go as it's So forward.

Okay. guys. Great. Thanks,

Todd. Thanks,

comes ahead. Please question from with Edge next go Consumer Connor Rattigan The Research.

Good morning. guys. Hey,

morning, Connor. Good

Yes.

at So just me of here one quick end the the call. for a

it elasticity you're at Retail rationalizations. greater when for seeing So Foodservice seems versus adjusted like SKU

And Foodservice Foodservice so the mean are I popular I so why we different. remained obviously, contrary to But belief. run businesses seems quite strong, it and to have Retail guess right? volumes think just

You'd assume consumers would meals dial cutting back the grocery out basket. before back on

discussions with to when it's or those Yeah, that then reflect it seeing really, don't. just we have exactly our so prologue, not traffic. ultimately it what And on either their on past -- thing. If We're point. great is look what's which a menu customers. is we They happening they see pricing But sort resilient. the traffic you the of Connor. would far so down far And at consumer remaining comes is

at it, traffic you And look Chick-fil-A. it before. that it Chick-fil-A the was And like versus industry stronger do well. mentioned we the on the us for you the has have I in dial sequentially than traffic you period. And data if the if that traffic you call we concepts resilient. to continues quite our and overall portfolio, remained and growth follow now helps flat look Consumer at prior these as period was in drive

franchise the think the of look our mix that's Chick-fil-A what you versus influenced you're business business part the of in when others, strength our business So that. of showing I at by looking at is

a guys. Thanks lot. That helps

Connor. you, Thank

King. from follow-up a is question next The Wolf Andrew Please CL go with ahead.

Yeah.

the down producing finished the the goods in the inflation the so at X% last year particularly being fiscal that least end On includes down or of inventory, from inventory it.

inventory So, thinking a it I on round XX% mean is I or down cases that are way? say case basis? the sound -- down XX% the number, could what add of using It I right just the am that not and to

down it's of but sizably in unstable much, last of demand. of And lot year that inventory. quite had units not close, You're a we terms

long up and So year flow got and this tactical really some -- performance. our planning we better items. as drive in I we've on help some built And inventory script mentioned there's my -- execution we cash through down able to that been

So question. thank that you for

of But see it's little Brian cash destocking or it their up or a retail that's versus…? even December anybody you maybe on heard you trade just if this revisit Foodservice, be there sheet and did part to up the like less -- re-ask. out brought of -- little to -- of orders, anything get think consumption or part quarter I enough. they to flow with sounds the you're And that's Foodservice, I your demand Is December the they you destocked but going their we're anything anecdotally wrap or whether kind know anything retail I -- you had any -- balance up anecdotally and a or bit because asked can't like what's in And deferred took in have just better just wonder figure down plan. say Brian Sure. may it like whether -- shore good for Foodservice -- the and did to certain for QSR because look about trying

haven't stayed conversations like and sales teams -- Yeah. and there retail No on our to close in any we've that. Foodservice there been obviously really

it's what the to you'd generally is Having and specifically. way we our look here, we're shelf a tracking us periodically this if with much we're faster nothing shipments much very fundamentals, like just than around. the your done consumption see this at line the in Tom rest seeing now where than other we of the can there's of the point see you your at while that and So looking But expectations. business rather

would was this tell I having higher execution also in-full Our and on inside What issues period be, you on-time product even in year getting like question one things period. is it are out? last where we're could the was there same problems than

and improved. our We've to not to really our service in we're metrics, on coordination. just tighten operating just have improved year trying our have down the So spent to inventory see up sequential last improved continuing even all execution levels end-to-end plants buckle safety but improvements

Got it. Thank you.

follow-up a ahead. Company. Please with is Benchmark Todd Brooks question next The The from got

where a follow-ups four-day will the be? the on cutover? just Horse that wondering of may. if couple What's is? I'm just that I quick shutdown timing When Hey, Cave

This weekend.

Okay. Perfect.

the we're quarter. of So middle the in

obviously, mid-quarter So really to quarter knock wood, model well? the need all to it's we a we any about think goes to shutdown shutdown, given assuming need don't for impact don't but the how we think

headwind factors the it. at cost. certainly, there's We looking training start-up do those a we a you've a it factory and couple there's If We're well everything And headwind. absorption goes lose days to of to Yes. as got then, and production lose cost -- a modest impact. certainly,

quantify, be bit So posted. from keep be should a modest to you it. until It's there of a actually difficult it, what in QX we'll it are through headwind will we certainly but

that and is would And this it absorption for the a of running be four factory factory days is just part we the because down XX/X. hit, have

look just drive a of just little down, absorption. going a XX So rough in period days to period, -- bit be which going the what at days top is modest on to bit little four a are in if of math, described you Tom the

other was my then And Great. Okay. on side. G&A the follow-up

it back that year? changes just Ascent level accelerating if costs, spend, you is talked in X%. about based think some we onetime set at consumer spend. north running as some on SG&A of like back I the the the to What's looks I right of commentary maybe the consumer timing mean, out the to Project look put around half I

Yes. Yes.

So, for drive continue brought spending drive volume mentioned, as be The expect -- volume the -- do the consumer million more half, the to the business the back continue growth we we cost to I'm to we year, in also in that in incremental to Ascent business. up, glad because back-half $X in Ascent loaded. previously, coming back and that's slightly or million $X basis you

anticipating Ascent to when the back in as to other -- look looking the out you then costs Ascent full a the half. And you When that we're that then a compensation we rolling have more costs X% increase of X% and adding some percent that. at increase on take the in, at it costs year, and expense, we're additional

But catch initially. on you will year math So, the up fair the do expectations a our of be I think SG&A. full with in amount -- on profile that, lot have overall, we when kind will in catch-up line a of of

Okay, great. Thanks, Tom.

call we If turn further the his concluding now comments. will questions, there are Ciesinski, for no back to Mr.

see Thank forthcoming if Have look And talk we We the a you period. out on the don't you in in you, to Anita rest sooner, to call seeing day. [ph] and thank we'll guys of you everybody May. today. you for joining NDRS our great forward

you for now This conference presentation. today's attending concluded. has Thank

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