J&J Snack Foods (JJSF) 31 Jan 232023 Q1 Earnings call transcript

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the J&J Snack Foods Fiscal 2023 First Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

would turn I to conference time, Mr. this like the to over At Relations. Aja, Norberto Investor begin. please Sir,

Thank Act statements you, first the to good with doing J&J call We'll historical Reform plans, operator, this statements, COVID-XX of Litigation and so, and This XXXX. in safe be Securities management's All not our Snack on within joining you start business. contain Private the take questions, will Foods our regarding harbor strategies, the comments on for let of forward-looking and made language. of call fiscal and constraints, objectives but the relate anticipated statements a me read meaning expected management's XXXX considered just quarter the and your call. morning, conference statements including to forward-looking minute fact, everyone. financial impact before do goals, Thank supply minute that performance, a matters of should industry-wide

nor involve Form ended date Any materially expressed call and as XXXX. of estimates those year indicated different may by future this promises the or statements XX, Exchange the statements. implied by the results on September filings differ be forward-looking cause to January neither that in Securities forward-looking are performance other annual today. from materially this for statements discussed or represent achievements our XX, results, guarantees Factors Commission, XXXX of actual with the results, factors and the to could cause such unknown forward-looking statements call management's made known risks, from in and important that or These performance other uncertainties, report achievements and any XX-K

events some the to our any forward-looking cause statements we point subsequent views so do we may disclaim update even change. to such if While in elect obligation to future, at

in the today, all website. the nearest EBITDA, In which are certain or metrics of including to share, per may release, reconciled of in earnings which Investor the call addition, also company's reference be Relations earnings on non-GAAP press the income, found section GAAP metric adjusted we operating can our

today Joining Officer; Chief call Ken as Financial is Fachner, our me Dan Plunk, on our well Officer. Executive the Chief as today

remarks, question-and-answer the go and open Management's session. ahead prepared a for call will we Following

would I the Fachner, Executive J&J Mr. that, now like With over Dan. Officer. to turn Foods' call go to Snack ahead, Dan Please Chief

morning, you, everyone. joining We you fiscal this Norberto, our us discuss good results. and morning appreciate Thank XXXX fiscal to quarter

continue growth the report double remain to quarter seventh growing sales. line top confident digit pleased are plans our We and of to consecutive in

brands, across We accelerating are strong expanding the in customers pipeline production with our product and strategy cross-selling and a our our innovation. investing capacity of our building channels,

United gained We hit second our have the at ground Regal having theatre the States. business chain placement movie in with Dippin' Dots the running already largest Theatres,

we sales Dots growth Hola! are just brand fact, In the in seeing and over XX% sales of Also, These couple the increased XX% examples opportunities and the into first business Dippin' in our a quarter. first us ahead well recently of business, grow quarter. strong launched This introduction Churros new to the new our us. churros of of including products entry unit over including momentum, channels. positions in are we

historic and to country of the In some adapt traffic industry most economy. hit the storm categories of our did the selling these strategic in and consumers changing challenges, as volume weeks prior quarter. including especially venues. experienced two softness theatres Dots, sales, winter key to food first during and outdoor Hola! the Dippin' grew many quarter, spending during the retail, our service ICEE, that impact Churros and in volume Despite Christmas across restaurants Also,

results. As softening and consumer year-over-year line impacted environment the bottom pressures ongoing inflationary our it our to relates income performance,

XXX QX throughout basis the approximately recent Our last are that margins will and we year pricing help points actions confident continue gross above year. of deliver this improved

compared side year, However, most on expense pressures noticeably to prior the our cost to we manage continue when distribution expense.

expect through inflationary high distribution year. to later in the see as expenses these periods We we improvement cycle in

is it to negatively business expected, will seasonal some moments. profitability impacted quarter. the its and year. a most performance in the second will in Also, financial in more Dippin' drive our few business Dots of the as half of a first results just provide This insights Ken our

as even the December. This three winter through our our weather on to challenging events movie foodservice. with was QX releases up segments, had combined a business starting revenue Swapping we impact slate some with sales. of XX% in managed weaker

this sales QSR as increased theatre, and on we and growth introduce pretzel channels. nuts pimento year see opportunity focused expanded We the entertainment, convenience quarter. X% pretzel Soft throughout the bites,

saw our XX% casual business, momentum Food also of team increasing churros new brand continued strong regional with restaurants. expanded We introduced fast we our major QSR, distributors, Hola! in Service. and large with sales placement as sales a The churros Churros

across into Hola! that opportunities confident fast the selling full and a first and opportunity with plan have are a Churros in distributors, QSR QSR, will major of test the channels chain growth year. still significant burger convenience half are going there a major marketing We significant including support throughout casual, with XXXX.

Dippin' was Dots. novelties relatively in excluding Frozen flat QX from sales

further weather this is was The conditions. for a slow first quarter by category, and impacted challenging seasonal the period

in year in have growing sales in remain the We parks, place channels. starting theme confident convenience strong in and and quarter healthcare very throughout second plans category this incremental the

to these have production two new added We support opportunities. lines growth also

convenience with sales well. expanded bakery of by a to and increased Handhelds growth strategic Transitioning X% and strong major as a business, cookies customer with we driven customer store our business club

our for cookie see ICEE frozen opportunities and we growth additional cookies dough. our forward, Looking

very mix Group. improve is to we rationalize business working strategy Our in portfolio, more with bakery in our productive pleased as our to the and shift margins products Bakery profitable customers and items the less

in Lastly, we as such to key funnel added Handhelds forecast continue fries. items and gains

we In in our experience to spending and organic thought the consumables. started retail to segment. brand, industry driven macroeconomic segment, for strength X% SuperPretzel quarter and gains softness our for the Moving continued pretzel flagships by distribution soft Sales increased growth. as our

brand and lower private as margin However, in primarily planned declined sales licensed of executed products overall quarter, pretzel items. rationalization in we XX% SKU the

focus As progresses, sticks SuperPretzel our flavors, is pretzel the strong full to brand, Bavarian pretzel on lead soft in SuperPretzel bite SuperPretzel and expected knots, a pretzel of year launch including year the new category. growth SuperPretzel revenue

we In frozen quarter. saw increase novelties, a for the sales X%

including enter we and and Whole ICEE quarter PUPPIE category, further As the launch the our planning expansion Fruit brand of grocery. Luigi SLUSH growth distribution this are Dogsters pots, of second incremental for in we in and the gains

later be a big plans Hola! capacity opportunity added will this confident also are bring for to this We with We our year. category. growth to this Churros retail

X% years. Regarding in timing our offset up beverage the service partially by a to installations XX% This was customer X% Beverages, in XX% sales. Frozen segment, third the of QX between in and decline equipment due was an increase sales, by revenue revenue, increase driven

However, we're installed to to half excited the of secured machines, the year. a second Checkers we these have communicate will contract that be with XXX over buy and approximately

our where of This continue customers, contract well. pipeline ICEE includes service and regard process to Dots Not business, potential XX% including sector. expanding as holds in most in QSR well across business for thus food Dippin' unit a growth, service the predominantly In the the an performed well quarter, in tests, also the it's stores both is but in sales increase strong. nationwide. added first only as as are a ICEE out far, into it today, with we very significant has rolling branded it large retail

over you some recently deal sales in Regal locations are over of we really know, is locations. as XXX placement Theaters, which, XXX with example, States The initial results rest encouraging. an largest to thereafter. with theater will with chain United the The a signed come a second As cover initial the

our recently business cherry Dots Dippin' strong promising our product and and ability sales, demonstrates also new to ICEE We introduced brand QX across portfolio a which flavors, channels. launch rasp with Blue leverage

now to spend we priorities moments like as strategic our remain would transforming business. a few on I the focused reviewing

to to success. operate of historic We for facing we under as the pressures, company long-term challenges offset us aggressive measures have position and this the backdrop inflationary taken

improving building aggressively more new optimized system, outsourcing distribution focused through lines, operational implementing efficiencies network. are like seven adding initiatives a automated on production geographically our and We logistics, new more ERP a shipping

implemented have across to various will margins. price drive addition, fully increases continue our improved now portfolio, which gross In we

with management responsibility chain distribution logistics me strategy the we now Let improve have industry. expect annualized our network that quarter improve supply management priorities. fully through to are and management. generate now start our We carriers NFI and minimize our truckload managing They as benefit outsourced business, communicated miles expert been last and in recognized XXX% of $X of approximately we to better efficiencies a million

Two These our build RDC enable our moving a over We supply products simplify network capacity are RDCs to of new three Dippin' we'll inventory box the able a from chain distribution located for [PL] of out Dots plant geographically country. locations these approximately to this product in the have centers location store three and better customer. closer across further XX through the box growing we'll and adding investing process where will to managing be getting business in six. warehouse of

and a Our outside open of fiscal in later in RDC facility should June first just the at the up up Dallas, open RDC will year. second

in is still RDC third opened XXXX. to be development fiscal expected and The in

have new production drive add have better efficiency operation line. will the add To-date, we we frozen churro On through and and lines opened two novelty new one to side, automation. seven committed investments lines capacity that additional

additional activate months, next expanded we will the on three focused Over lines six production. pretzel

operations. same to to brand time, J&J Dots M&A relates opportunities it M&A, on potential and business integrating our currently we channels the and into our the working complement that we are At continue Dippin' model. portfolio systems, customer evaluate processes, As

long-term to more this to in are In and help our us while we on brands efficiently. business, focused grow investing will growth. operate summary, remain for business capacity the building Strategically, transforming implementing the we initiatives

J&J us organization is about the great aligned ahead of Snack to the building team leadership continue Our on opportunities history and of is the Foods. excited

I to would financial now to call the like our to Ken? over Plunk, CFO Ken performance. review turn

good you, Thank morning and everyone. Dan

period. We XX.X% the balance year sales across the experience Net and about initiatives bottom prior were to many mentioned continue expected we on by their year the line. Dan earlier, remain we $XXX.X for As the have impact top the quarter the to our growing given of business line sales versus optimistic million underway, from double-digit growth our business.

of million in increase with and representing The XX% in businesses in of sales. handheld sales sales by driven churros increase well, our XXX% from performance or approximately our food XX% healthy $XX.X proximately increase Dots food novelty and $XX.X revenue QX, exceeded services $XXX.X increase largest of XX% benefiting included by and total in growth sales, was Dippin' sales. XX% services Dots Dippin' million that an Starting in XXXX million our segment

in and X% an of biscuits We XXXX. respectively. segment X% continue also business $XX.X same year. X%, saw growth X% our soft period increased compared novelties frozen with million pretzels pretzels strong in and of increase or sales the XX% XXX% in The decreased X% in of the fiscal Retail increase respectively sales bakery prior their Handheld posted versus so or and to performance

$XX XXXX period. quarter Equipment growth between the sales beverage to of Frozen Beverages XX% fiscal in declined X% maintenance due in sales XX.X% million previous timing was compared the increase XX.X% to year over repairs margin were as or XX% growth well of and million XXXX. profit grew years. was comparing Gross to Gross led of by $X.X the for X%. an QX, service sales revenue QX quarter as installation and the versus favorably, XX% of

distribution representing the largely of reflect the for and Distribution XX.X% respectively. income XXXX compared total down to lines particular the to were expense all expenses XXXX, XX.X% improve XXXX. they QX but compared $XX.X sales - in XX.X% and across million expenses. QX when of XX% expenses XX.X% QX operating our persistent to Moving did increased in These to of fiscal quarter compared sales were statement, of pressures XX.X%, results inflationary in

expenses sales costs, points expense administrative equivalent of approximately year versus represented basis in QX, were year for ago. to XXX X.X% XXXX. the distribution X.X% prior million XXXX in The a QX an while percent when quarter on in period, as selling contributed compared of and $X additional Marketing higher of compared to basis sales expenses of sales X.X% a X.X%

will Dots XX%. those This first the Dippin' impacts income led operating half compared expected, XXXX second business year the its in business of seasonal This leverage in in of QX, the a decline sales or to $X.X to and better most expenses of our million year-over-year $XX.X higher in Also as is quarter. million of profitability in results drive negatively an quarters.

After prior $X.XX. to reported $X $XX.X to diluted share in $X.XX. was earnings million million in income an decreased QX operating the fiscal per per in to net share diluted income earnings of period. tax million, $X.X considering earnings compared XXXX, was $X.X Adjusted compares resulting adjusted $X.XX of That million

X% Adjusted to decreased EBITDA $XX.X million.

was Our marketable even effective and a continue our have to securities, first with overall debt. quarter. tax Dots healthy Dippin' XX% look the liquidity in the Taking a and at million $XX.X strong liquidity in rate and position we with sheet $XX cash balance for acquisition, approximately million position,

we availability In with addition, of approximately additional have revolver borrowing our ample $XXX capacity. under million

summary, our our initiatives fuel business, are portfolio remain about continue excited and and In we will opportunities that ahead strategic brands, in the growth. investments to confident

means and the to the available position adequately opportunities strength, in and J&J ahead drivers in Our efforts to the leverage $XX improved in ample of With cash displays efficiency of to a growth gain we us. invest effectiveness liquidity, our added of have added ability support, and million business.

like to questions. call now Operator? would the open to I

first from Mr. of your is Instructions] comment comes line line Andrew King. the open. CL or Our from question [Operator Wolf, Wolf

you. morning. thank Hi, Good

Andrew. morning, Good

I know, want to gentlemen. start with, good morning you

the maybe what saw of volume demand. consumer and results, behavior, of On elasticity with you kind your

like know, consumer you caught itself, you and quarter, particular. outperforming extent, perhaps kind the to the referenced industry then of seemed most I behavior? slowing and business elasticity the of you're this like, some industry up negative think, in on seems And to the experience some kind know, you

as volumes So of kind you great? and that maybe the a sense for of get well? a just be to where that like, SKU you adjusted rationalization penalized that us your Could don't by quantitative - sense qualitative will give are

then our talk I'll quarter, you this strong. volumes were to Yes, quarter, said, question. some Andrew, last on, for off. as were into of your Right, trailed went that quarter entered ended our what And the they even And like when much thanks you strong. it's we know, they as we

as so, affected I that to company, in a watching we month. we're December closely. do And that really personally were think, greatly tend the and we pretty

we as And got or shopping it quarter. our does three won't you're we we - And effect, weeks got two I people have that. to liked late into blame mainly, do and an to never that holiday weather, in weather season. as as cold especially really into the anything on we allow experienced But of the the

move new it are what into we're be quarter see really closely watching there mindful it eye to that as And so we happens close from to watching a and on. a with going and

have don't personally I issue think the that we hit of elasticity.

our took I even think others maybe well was might line categories maybe the within in slightly pricing that. what taken even that below we have and of a

don't that and issue. the under period I of recession got know, much done there's have a weather hit I that's cold and believe as as you really I think different out you just of into threats where that we people shopping might conditions. So aren't they - a time

rationalization off of error? you number some you a where out a that just productive think I - SKU know it's SKU, helpful. very pretzels. I got significant, calling Ken pretty Is think significant on you alluded Thanks know, the somewhat to And - or worth I rounding out

call in it certain category. wouldn't Andrew I significant

the that You with a of of Dan bigger had trail you because know, know of didn't that more. Again, said, kind other of not and than expect, magnified a off key things some it's it places some impact bit others. you the But volume the we of, little driver.

to bakery, I places a the to really you we bit, in taking tried you pencil mentioned pretzel. think that know, in we there's as places were comment, quarter sharpen

some do focused get there to really feel we bit. grow. we're recalibrate our that, of were standpoint little to on a a it to that business from things about wanted kind margin But good we Where model,

significant the your answer but of wouldn't so question until. had And couple on it impact anyway, is, to it the I yes, an quarter categories, a on call

what capital increase Got pretty expenditures, really you in business? what you budget allocation it. for be think big - lines. year to capital And invest new one plans cash a the seems you back is comport in your other can all, on aggressive pretty your you question, how know, kind of seven But to us reported of with you for just the spending and kind of which express capital first to might

M&A deal? know I side Thank there's alluded the you the you the my executive And sheet how the execute much more is to. on that leverage question, other and to to a related is - willing committee guess balance debt to, you. take Board

feel the invest I lines spend the about business. at relates But in versus Again, capital clear double for changes ago. as it to appreciate Andrew. where ability to year new we're the almost really RDC. on in question, $XXX investing saw we in good we're the to continue, debt. new of million that your mean terms Yes, close seven think, very in I Yes these the point you a and been balance to sheet? quarter Yes, We've

obviously, So know, versus, to in know, years you two, ago. increases drive, three going that's you CapEx

number $XX we You'll to I spent of know, to there. that be in investments see as South to in going we're just these say you the range. in was think probably million execute somewhere $XXX CapEx million that million making, continue the we number is I'd XXXX XXXX. that fiscal $XX that

we're focused lines completing key all execution making. and the those of really it's investments on And production that RDC

say we're of terms moved supportive as got In can of this go kind we this number seeing think specific exact that we've point. say invest leverage kind no and and that a can't now willing start to the balance Board yes there's a business do. to evolving that. I our of with But grow to from mind leverage at is the we've of with sheet on what Board, We that company. I that the in number landed We're an debt, leverage I wouldn't Board really there's and of

I'll Okay, on pass thank it you. it. appreciate

Thanks Andrew

Thanks Andrew

you. Thank

line Benchmark or comment is Todd now Company. Our the Brooks Mr. next from from open. question of your line comes Brooks,

Good morning, Todd.

quick way we the - operating that you impact business, of Few Dippin' on the Dippin' with for questions Dippin' the the Dots? the what can for of seasonality you, from gauge of trend drag was outside income us in of all Obviously, a Dots. on Dots can kind is the quarter income there that operating size first first so

this Yes, is hi Ken. Todd,

of group the kind of of XXX% had surprise, the we the in all again, you the QX quarters, - business. qX negative no it and impact. last almost profitability given call in a think tried you it and can guide to know, that is I dividends seasonality that in has qX slowest

you'll Dippin' this just in know, Dots. from think XX-Q spelled negative south $X see this in million You quarter I the out impact of

a And that's and a this a was the sales of base, weight had Dippin' in deleveraging fixed creates Dots that's kind impact SG&A above quarter high our But a side. performed based in that expectations, on but what little of great idea QX, expenses around on was gives bit of quarter. that actually and certainly expected that low you

use right to and ramp? is the into the September of March well going Thanks, And type for as that June Ken. number we're the as quarter

be you $X probably than better less than of Slightly it's know, should I that kind that, positive, Todd, you positive. million would but guide

thank Okay, you. that's helpful,

year? at the of in or may obviously at see any One, and why that to Is the back up the those all consumer? volumes, get working be in would did Did just from Were question outside later wondering volume dip Secondly, inventories down little of this destocking the inventories business? quarter? I food at of have two retail and on of things. a - see was Andy's customers to the clubs service end wanted you the you follow part your about the mass

observation. good Yes, Todd and And believe a we discussed our good did that's business. as we absolutely that a what feel with bit I that a question little own

smart and the retailers inventories and themselves down. in in drive started found the I to same many of retailers our think out there, - situation

came play And into so a yes, that was of I December month. think what that in portion

sorry, great. Okay, go Ken I'm ahead.

are there's I a doing data I there's at was said stores data, sure there. did same to read lot was But just I'm out going that thing. grocery And one of you slightly the add, spending down. guys

frugal basket. a I to starting people you're be So the more see bit on think

the at other less The pronounced Stores, the some Dollar bigger higher read a thing particularly and pretty I grocery retailers, bit and in traffic shopping increase end traffic that little a stores. was at of

And something that decisions think a drive of the slowdown then as there start that, much production different We is first of your of impacting to got us. back does push kind little on I of So buying inefficiency. trying there's We've for too retail some know, products. in create and you where side question, to it, they you're now on inventory. to bit all calibrate on can of our

a was if I quarter wondering was any the just did last compared kind volume is would have customers conversion year? advance the of in conversion well. quarter tougher this And that of in as the for compare fiscal year, this made part volume benefited Okay. March the this ERP inventory Obviously, of but of the 'XX, December preload

a that's but encouraged what XXXX point, happen. not But great in we that can't have know, Todd really year, at did might hindsight that's No, say Maybe you happened. that last I that this question.

the service quarter was question, roll was along. that for it churros final in And I'll food quarter. The the only was it strength in full at over - great. for out launch the, did Okay, the pass place

strength a a bit of channel going So service accelerate food have actually selling quarter the actually, you full could that when into it forward?

are good can there, but We feel brand. we've what behind it. it through lot you really the marketing lot of distribution churros We're come to it. out about And sale we've age. a behind just large We We the love even about got the know, new of putting of opportunity believe We talked network. all like really accelerated. separately, be push with continue not a love we're, there, the Much customers of it.

continue momentum can the year it build So although I -- to think throughout

the quarter? rollout Dan quarter full the for available or over did it it Was

started rolled it throughout but quarter, been would out really have It early. the

know, quarter. would early you it been it have the been, would so in have And

sure So I'm and XX% not to increase good increase. XX had you XX% we quarter Was guide on how that. a plus,

I expect same So not thing, the the it's coming good a if quarter. greater, quarter.

great thanks. Okay,

- we've marketing say you plans is that around about hit come There's plan to it around that. even know, kind part more there Yes executed our and wouldn't we're stronger and really brand. really every of, promotional of I excited Todd.

we tests good some as things got in And of really well. it

thanks, Excellent, guys.

Thank you, Todd.

Thank you.

Mr. next comment the now is question or Our your Consumer Edge. from from Connor Rattigan, comes Rattigan of line line open.

Hi guys, good morning.

Good morning, Connor.

So just quickly this million expectations. on sales decently your of Dippin' like Dots, it in ahead sounds were - $XX.X generated

So last in historical by first run rate math, brand my XX% about XX% that sort or quarter it's than of million of about about sales the the $XXX quarter. on higher puts you Could a get how big rollouts? this thing to expectations to year your distribution just over sense the should brand we be of the maybe given for planned guys quantify trying expect

your I is think good math with that. good, job Connor

you. Thank

just in operationally are number, to ballpark good expectations in that feel we're Dots. our - other doing think you things in about doing just really I with. script, but in out the pipeline. but we're exact we Dippin' the mentioned And like Nothing that example, came release things one really, the what with be We

on do with year. think So that you kind yes, with of we we're business we what aligned this can

team really about and your We part are excited that what that good doing. in they're and math

really with whole way that thrilled the the we're office the in team responding. And fact, they're this sales a week is sales just here In at meeting.

efforts also you on great mentioned. efficiency that's the quickly that guys. some of then Awesome, just And

or - purely that incremental lines are just million year goal? $X to be also new that clear, fully is to fully a lines the of efforts, more So replacing or figure, expected just realized And capacity? is 'XX be these these on fiscal automated this that manual are automation

you want Do go to first?

well, is it the added capacity. lines, Yes on

this better So its is current modern not but that new lines than obviously automation with more and replacing existing. are lines lines,

expect in those product I'm to we efficient question? how first your through lines. be So more sorry, was what move we

be realized that is on $X of Is and more savings Just to 'XX from expected the this distribution like fully incremental or outsourcing. in fiscal the year logistics role? that million

spoken of think to really strings until we this kind them to on the I our key and we across is to October, of around all the us be network. pulling and kind on business way we've distribution before, Yes, how the it all about our get September, NFI for manage of product entire took managing

we I'd say 'XX, so on their to for RDC we XXXX, $X good get Secondarily, Yes, we've in even strategy - a make easier I basis, an if given yes, period. million had a of job, to as carry annualized this probably execute guess what think to got this that going in some of it's should portion carry fiscal I that is realize but into going motion.

shifting to me you much lines efficient on touch more make different the the Connor, let we They in do become of some And have in just areas. to are question that today, that some addition also we products where lines had. but it allows us to

to line, that intention capacity. able former for Our more down be but shut the use to not is to

right ahead pass All so and go much. I'll you great that's guys. Thank it on.

you, Thank Connor.

you. Thank

open. Mr. from comes now comment line Blair. is William from the or question Jon next Anderson line your Our Anderson, of

Hi Great, good everybody thanks. morning.

morning, Jon. Good

morning. Good

we're just Good it. last with I'll on since that morning. stick - question Maybe

shifting you unlocking will production And new are productivity capacity question much new And of well? as optimization some your seven production. the lines? the and capacity, these seven On kind the of But or benefits in around again, are benefits that's with of associated comments lines, are gets to how it? much second guess, of how new the I lines unlock? with there margin aggregate part also

to our and was experienced products, core, the frozen right? outgrowing side novelties don't one I the really and the capacity, us but you dog pretzels have and our So of grow number churros our pretzel our on the give exact things core it to does even of allow which business. we is

able so, back have out there team opportunities. we selling lines that new capacity really and And enough to sales our get be new addressed to have to and

to It side. where making different does as areas, novelty help to are maybe like making part even more on becoming because opposed in the the products across efficient in another much of we they're shipping and products our making side, country one them margin side, in sold

improvements So there we we realize think can margin these open that are up. that we as

kicking thank and first then you about quarter us the Can volume That's was X% growth much growth of helpful, was Organic organic price? how you X%. was kind And that in you. help gauge the how much up? kind very based that demand interesting of a are the be of the laid kind that of generation of the cross-selling new channel account, through lining initiatives of new out to lot opportunities opportunities seem year, kind in

think trying accelerating we confidence kind should growth know initiatives for the do profile in that year range? or the during of that this balance of - to a through level of of organic difficult company get but coming the question, of what and the have might sense about I growth quarters? lined mid-single-digit kind the just a How to it's some in your up you organic that maintaining

I'm that if for going Ken or quarters want a it let teams. to the companies he getting bit people little can. more couldn't customers. And and I proud more. products selling the more is of just talked two say about about cross-selling and But about responding numbers, different now across on sales across the our three they're that the engaged talk to We this way that, in I channels to be about happening and

relationships if led that. with is look And the leverage them really number, happening so, by we with on business, Ken, and I get that. really to being certainly and our with It's progress that that some our it firsthand, growth see just if Dippin' that sales helpful and don't the have accelerate as you you could we're side, will Dots that know at have helpful. I happy teams, help our to pleased customer able be starting contacts to to that

Jon, up Well, Dots we to SuperPretzel glad I'm so a add intentional is examples, what frozen I it. little when churros. growth deeper on were go it highlighting we would a to just we But see lot was Dippin' even an to but opportunity bit novelties sprinkled picked you to very of on maybe really some

if very, you second. the very just in our of in side take still next we for a to Dippin' business, grow out remain yes, Dots three confident organic the quarters our So ability

data there, we're that back, Like watching and going rates up. mean, of like see and a see every you out dialed other consumption savings bit GDP things little you on being company I

that, consumers with So haven't as our our brands some time which consumer at impacts of things But there's, innovation what watching, aside a more don't J&J, confident cross-selling. where we obviously I business that from know doing pullback. we're felt in and we're about

So going remain we're of for to very what to rest confident able the we do be the in year.

so When it's EBITDA at I adjust, a but from even impact to similar the for quarter, guess, what One be? EBITDA around helpful. looks or perspective. of in that's came Dippin' a EBITDA year the XX% It Okay, like or EBITDA kind look bit of of the I of anticipates the first earnings deleverage. Dots, more an more adjusted in question, street full and

the of the And to XX% year then trended more back looks some it pre-pandemic if I kind in to like years, might more XX% quarter typical of first EBITDA range. have look

year what modeling look little So just an the the slower perspective, to like EBITDA maybe you're would is it for at starting this kind optically, full least relative of street year? the year from bit a

that, the cross-selling I But those entering and good are full QX of catch-ups There great of again, a cetera. on am we're exiting I things pretty metrics expectation? hey, good thinking kind et in - QX deliver on front, to a year about from margin position mentioned so it despite right you efficiency are happening there of lot Are pricing, many going things kind a operational on.

yes in we my think in even ago, this will or but number got Two expenses. back headwinds distribution the even don't I this a little again, impact $X comparing bit. off year went head, number a 'XX, explain bigger, if have I you on terms of EBITDA be you've the back to Yes, try right roughly million of to but

would ago. versus just on would you be impact - year year - equal profitability an that basis, this If that a

loss And the that weren't in with quarter as expect off of weather think right And about. volumes to in on expected. two little from talked do Then the some that expecting things. then and, again, had there business a December then the the better create it mentioned of kind to to ended I because million bit Dippin' I than we do tail impact $X we challenges we quarter, we, we bogey a just when a that starts bring that Dots

sales, That's for quarter QX, of in and the QX pretty even years Keep XX% don't you really if be J&J, a it's back. out of kind you the should if play quickly. the go you total in of profitability seasonality business. And going to just that where create then deleverage and and mind sales the J&J in that for is

it. much so Thanks Okay. Appreciate guys.

Jon. Thanks

Thank you.

Dickerson Mr. Our Jefferies. of line the now next comes from Robert from comment is question your Dickerson, open. or line

hear Great. so Can you you much. Thank okay? me

can. Good We Rob. morning,

to follow-up Great. little through high. right. the inflation a to volume question to that right, still Thanks there's was differently. of I deleverage I a had last input asked. ask Ken, kind a comes little All a that point, just little your a guess, bit is cost lot.

then pricing On the happened you the in the side, growth as understand sounds offsets. margin, distribution to like it good specifically back you speaking QX, side. the EBITDA opportunities could COGS innovation, through of kind but what just not behind get other there And more mentioning, as drivers half. I'm be keep

in maybe you're and is last you more of of pre-pandemic couple the those kind making of we go that year, got feel right? back we decent this of a little bit pretty right, could back as like quarters, get back seems on year, it back of and into QX more margins, kind the kind progress goal half-ish of half If a

now, point some kind there'd I issue be consumer back because And sit had year, just of lapping year, the December maybe this QX here behavior that extent. kind of last right, one, I shifts to when think think of just about then if ERP about a as half would I what kind guess, margin do you thinking one, we're we're And progression. you're right, nice thinking some volume, softer then you of maybe right, little some like consumer obviously, is a behavior right? contingent, Some summer, be some maybe there's also like help some feel still And is sounds kind into that right, this we still weakness. through target, of might incremental which then on offset as maybe pricing offset of of some away. it's get like I inflation. going this is hearing, consumer could some I'm little bit far of to to cost distribution come a the It moving innovation had

gauge margin So to is Or potential where this lot in that want the of trying just you how I'm kind kind to be year. there. market recovery thinking about of -- just of little a bit that all a That's a we're forward lot That's we're pushing maybe it kind of it because have. maybe kind something little clarity? -- less there's I

Thank you, Rob.

me, my right? you Rob, did job for

pretty it well did though. You

Yes.

this as trajectory you think, can get had We going back clear I meetings last to a margins. up go XX% those to even these to quarter. on been business

new new and stuff getting ideas, to now, of particularly our drive As these the season, behind to do to sit I ability getting some the and here that, feel see start because doing, we'll new think really I going us, still as and volumes all I peak QX, we're in QX inflationary we growth. in are believe products initiatives, things in confident get those I the innovations to back kick and

to you for where We economic what a pay and as driving benchmark, quarter investment long and long-term of said quarter, into challenges together So here, I inventory growth, we're recalibrate manage like from could emphasize continue aspects pretty then into to demonstrate business our to anything, Rob. bit. doing we're of us. kind you get and pulls We where a if come the good a little And this I this, standpoint dividends that are jobs then that each term. as back casually weather on reduction seeing we still an some to volume get have are from going

good quarter, half And still of hit but back the a feel really about so that year. the can

Yes, Rob, once pricing I to add would that And quarter. year. takes that ICEE have in some we We talked also it as side. would the still pricing that ICEE on just echo another I well. about coming a

a there's X pricing taken so the that And on ICEE January side. was

groups yes, pre-COVID and all to our of our I so, part feeling of conversation all And still that percentages. getting pretty back of amongst those think we have about we're And confident conversations. the that's

Super. Perfect. much. you Thank so

Thank you.

Thanks Rob.

Thank you.

follow-up Mr. Mr. Our line open. King. Wolf from or your Andrew next is comment now question CL is a from Wolf,

My is release. I for cost said on slowing, commodity Hello. your outlook which inflation in you the think first

you're But going things your costs percent and of on about in cadence locked could the is but might did. didn't a you I thinking be, this, You more talked you maybe what hear be have that. if contracts it forged what like little of through to are well specific kind

of the business? better are really when where to -- pricing quarter plus supply chain looking COGS others comes a the comparisons in for and on think I of folks a lot manufacturers inflation, the your really the relief in June the to is than year-over-year sense lot that unambiguously

full trends and other the days you And more pretty the like ended. straightforward. either It's way five since then -- the quarter second a there's you.. been very changes much couple volume seen in January? Have is weeks any follow-up Thank just in

commodity handle costs? the Can you

Yes.

said look better. think trends data And Andrew. we've I on I much at commodities, getting the so this, On that, are

gradual, seem better. but too they getting they are Sometimes

a ago. examples. to higher XX% were points. went of give Quarter-over-quarter, it basis XX We just Just than you a year couple up was

it So And XX did went all on points. basis to that decline. outlook the expect up, it go up but is continue wheat that the do we

we go think as we right QX. commodity, at think think the -- is to on I as X% our wheat it's I biggest as of now quarter second may down look best X% at this our guess and it look kind we

year-over-year. across obviously eggs. of a if you go Even, eggs, triple XX% use we of kind digits quarter-versus-quarter. lot Egg up is the But

go up. to continue eggs So

crystal commodity So of them Collectively, talking we on to continue you're ball. a do a different it's answer. expect down. what have kind about. don't to spending It's I go

to it's big this ones quarter two range to down high as then not that guess next I of to signs it mean, our bit. quite heavy showing that. supposed a but are hopefully still was, that Sugar, as continue better best not decline further it's I point. at go as X% X% look than think maybe somewhere and, are is diesel we wheat, in out,

kind we're what's ahead, cautiously the watching in bright being some weeks out do that the careful have happening on Andrew We then really And industry. of about spots.

would in month. January back come They've bright in December the business those of one the really was be So off theater spots where the strong pretty month.

encouraged And so far. what by so we're seeing we're

Thank Great. you, guys.

Thank you, Andrew.

you. Thank the to additional to Fachner any closing this I'd for time. queue Dan back no at the over showing I'm Mr. conference turn like in questions remarks.

and on Great. Thank more we conditions, partners. while dynamic you, effectively managing to that serving In focused than our ever, operator. you assure customers are want through these teams our closing, market

on various outlined challenges these company have the we long-term call As aggressive measures taken position success. offset and to the today, for we've to

continuing strong resonate remains core new customers. and to momentum brands with products Our with our

we positive will And and progress have XXXX, that strategies as on -- our are through are impact our we results. business a confident our we marked and and

to our contact work or acknowledge take JCIR joining business talented interest entire We wish will continued everyone, Thank to you, your of the your you firm, this to and have much. very unit. at teams call. and speak questions Relations the appreciate any (XXX) us, Should hard thank We XXX-XXXX. for support. also please you on Investor dedication across opportunity the And us our today

in participating the program. This Ladies concludes conference. today's and gentlemen, thank you for

Everyone, wonderful have a disconnect. now may day. You