J&J Snack Foods (JJSF) 6 Feb 242024 Q1 Earnings call transcript

Thank you for standing by, and welcome to J&J Snack Foods fiscal 2024 First Quarter Conference Call. [Operator Instructions] I would now like to hand the call over to Norberto Aja, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining J&J Snack Foods fiscal 2024 First Quarter Conference Call.

harbor just before with take doing to the in and management's a start read questions. But your so, safe will a the minute comments minute We language. let me within This call Litigation Act XXXX. of meaning the Private Reform the contains Securities of statements forward-looking

results nor the report statements this our by Commission, year and expectations regarding statements As discussed or are anticipated for matters strategies, and do the goals, Securities to objectives call statements X, or forward-looking as on management's performance guarantees September actual performance uncertainties different date promises involve cause not and to XX-K filings management's achievements performance. These annual known including factors such, risks, XX, to estimates neither financial XXXX, this future all historical statements materially forward-looking facts other Exchange statements, ended indicated there unknown that of that relate from and this our and those implied forward-looking that represents of in such should Form made and on are results, be be any from considered plans, may or important February call, other the statements. Factors cause results, on could today. Any with of expressed made the statements materially forward-looking XXXX. the differ by call achievements

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

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

Fachner, Dan Officer, Joining Financial with Officer. our Chief is Executive on the call along Ken today Plunk, our Chief me

turn go Dan. the we J&J Chief that, prepared Dan Mr. would call and to Fachner, will Officer. open session. With over question-and-answer Snack go I ahead, call Please now for management's a like to ahead remarks, Foods' Following the Executive

Thank this successfully J&J you, consumer and with I Foods customers quarter everyone. traffic through with good many to ability appreciate a We discuss first fiscal to results. challenging experiencing joining XXXX declines us and environment our Snack manage morning, am of in consumption. Norberto, you year-over-year our pleased morning consumer

brands ahead J&J Our leveraged X%, the customers in and the incremental holiday of season, inventories adapted our a like in proud how line resulted the just sales reducing trends with cookies decline consumer in customer product opportunities am overall especially of to first in to and maximize industry. quarter. opportunity team frozen sales iconic by trends This under pies, novelties. I categories the every of largely in the

in resilience driven Beverages as grew softness While Service we across decline our X.X%, our Food in respectively. in experienced segment, continued sales sales and growth X.X% bakery, strong by we Retail saw X.X% a in Frozen and

productivity. basis focus strategy gross by ongoing products well overall driven gains continued a resulted to XX.X%, as in higher-margin expansion Our as core points XXX our to margin improvement in grow on

our quarter. a success XX.X% a increase XX.X% strategic including the of we adjusted our talking improvement EBITDA. I'd sales, take is performance meaningful income in softer Despite minutes becoming delivered operating the few business, in sales a overall Importantly, the initiatives and visible. the in of to in like adjusted a profitability year-over-year about increasingly increase

our as to faces never confident ability grow consumer our been more in challenging have environment. more industry a We even

cross-selling expand and about to leverage For to and of core continuing opportunities our placements J&J, products brands. innovation it's

Our business incremental consumption is as trends positioned gaining well is opportunities and improve.

a portfolio. to during our retail super of core compared increased seller launched #X Bavarian product our the segment, the the late products the the soft brands and is fiscal In now insights best sticks, few pretzel quarter. into sales XXXX in our pretzel a product in Here first of products new prior XX.X% are year. performance Retail

within We Woodman's items few. Super portfolio name also including Publix, gained & to Stop incremental Pretzel a retailers, our across Shop and major

Food in pretzels declined segment. by driven our X%, to Moving Sales soft channels. traffic key Service primarily soft in trends

the menu. business, the bites in several pretzel knot However, incremental launch super theater permanent pretzels are with of filled of national new a buns. a making team Jalapeno chains sales did gain Also, casual gains nationwide and major part fast a their Pretzel including customer and

this We year. quarter share last continued compared to to gain market

talk churros. Let's about

We already manufacture opportunity Service exceeding locations. The an first quarter team momentum continue Footlong is and expectations. began This opportunities. Subway about and to for growth the U.S. across Food strong Churro rollout in the to a with see secured successfully segment remain all excited the

churros We of food a also the September to major out original roll distributor up momentum. doubled began they have and order XXXX, recently with strong in their given

driving innovation extensions flavor launch Churro is are the Finally, leveraging of new we opportunities. Filled sales with such that as Chocolate our recent

by Service slightly franchisee the an of or business. from retailers. quarter, led also expanded softness Schnucks, at the Retail Food for expectations were Churros above approximate segment, X.X% Dippin' top are brand which additional Dots, Wakefern, Grocers in feedback iHola! of performing segment. We awaiting customers. for increase the and the was, however, sales by at This and Our the is positive Supply Sales distribution Giant-Landover in part is XX some our part offset in of

quickly growth see to opportunities activate continue for business. Dippin' Dots and We to new are moving

the rollout agreement this extended XXXX through Piper XXX past Peter customer commitment Cheese with our for placements. received a from completed of a convenience store Pizza and we quarter, E. another Chuck Just

with across the install Theatres and we at third Marcus Cinemark, to for addition, locations ongoing a incremental rollouts tests major theater at In chain. expand theater XX vending at commitments channel to continue

quarter. Mexico, This to increased the for was in traffic. Sales an segment expectations performing of posted below increase releases and club lower quarter. due in to customer results volume frozen restaurants major locations a beverages. the strong program but ICEE. mass by delivering converted quarter in to led prior Moving over strength the new sales, locations Overall, plans year, to XXX retailers compared out continue the is movie the merchandise softer to theater with The the X.X% rolling continued second self-serve channel, of with amusement for increased date a for and rollout

a our as retail as impact Trolls campaign overall such C-store had channel continued major as from also Target We positive outlets marketing well at strength.

XXX Looking to are April. a Buster's phase opportunity partners ahead, by we excited out at we major from Also, Dave across a entering test received a our late QSR about QX. & in to locations roll commitment

novelties brands, this to but year-over-year grow growth faster sales continue previously customers our key in as inventory reduced and most areas. the the of we This in than key many impacted mentioned, As category. in our Frozen quarter levels market declined orders for

our secured excited In Ice during placements incremental brand gained shelf fact, market to grocery compared Dogsters retail team our additional at continue Luigi's retailers. Products share competitors and our quarter, Italian and ICEE like novelty the top branded to continue perform growth we strong later placements Dogsters Dogsters it as retailers as gained in outpacing well. delivered incremental our about really XXXX. of expect shelf competitors. largest I'm results, our something reset will the also recently

to see spring season Frozen growth for continue peak seasons. portfolio we summer as approach novelty We our and across strong opportunities

talk about Finally, our business. I'd bakery like to

holiday customer consumption management trends. of sales X.X%, the through driven largest impact experienced our traffic orders to decreased softer season. the lower customers the entirely cookies inventory manage Many reduced bakery tighter during For for of of the and pies and quarter, by moved

Looking that lower-performing more us continue is gross we sales selling ahead, SKUs. focused identifying new margins strategy product drives improve innovation This on profitable we helping while are bakery while rationalizing opportunities.

mentioned to seasonal cakeables recently on we execute and On initiatives and with across continue and and chain to cookie to opportunities introduced outlets grocery, an several growth support in supply retail and Starting opportunities operational Bavarian of partners, on working calls, prior enhance customers, we the Croissants new with convenience. From cookies overall we to bakery Pretzel strategy. as growth better launch we our secured in-store a SUPERPRETZEL handful buns front, across the our opportunities. perspective, have operations are

our opened have and Woolwich, We the chain. enable Jersey. now distribution new centers, productivity DCs improvements in These New continue X supply X exceeding of to are Texas Terrell, us expectations driving will X and

third open the quarter. Glendale, to scheduled Arizona, in are DC We the second in

In and customers us lines and output of we're as efficiencies novelties automation, The core and think such frozen products Shifting it through fact, operations. new create opportunities. These lines this higher capacity grow margins and and and gives week. channel across new product better I to production churros to opening flexibility production pretzels, profitability. the metrics addition improves X also which

along dominate portfolio, the protect employees culture. In core their to categories, thank want embrace with Our the closing, us a core in team unwavering of power is the our future we and commitment focused customers. their to to invest something is The nature our diverse establishing of business brands, products and our serve brands as and we our for aligned channel culture our XXXX J&J commitment cross-sell partners and confident grow our fiscal and strategies: beyond. execute are X of to to our diversity will continue winning our in that I well and the and

and would been us over are ahead shareholders. value I its review in in partners to that, of now the strategy, more never to has excited call company financial to our detail. With employees, about more aligned and Our performance the to we vision pass Ken? our like and to opportunities long-term Ken deliver

morning, you, Thank Dan, and everyone. good

navigate a team's softer we discussed, just our QX. consumer Dan environment As are to fiscal pleased in with ability

sales slight to a decline in but the line industry prior compared experience were trends. did we quarter, the with For year, overall

margins executing down efficiency for of As primarily Net million, improving totaled season operational versus our due of in handheld decline and our a opportunities certain channels prior and declined impacted profit sales quarter. $XXX.X we decrease agreement. Bakery X.X% the and growth declines that the helped and in X.X% well handheld customers many decreased balance Food in Dan consumption X.X% inventories reflecting and to across the traffic during contractual cookies among stated, as cost strategy, $XXX.X the segment sales customers. quarter sales year. saw to largest consumer were This true-up our holiday expanding X.X% customers. Service, million, reduced pies as and sales a sales

Food softer our 'XX onetime million pressures. This $X increase quarter. and distribution continue and as the novelties growth pretzels and the respectively, QX X.X% of Service period. X% business. core this were costs distribution Although volume This consumer a handhelds sales opening to X.X% offset soft segment driven our declines led our center, by quarter of impacted by and previously frozen grew high-margin or associated of income for prior Jersey expenses. versus Churros operating Sales with the declined the These we decrease food New X.X% the in category, for in partially sales of drive service discussed which did reflects which to

led of XX.X% the sales of mix, by onetime opening versus expansion XX.X%, with compared QX prior increased million XX.X% sales Moving segment $XX.X and products novelties by driven to and income distribution to a retail. soft versus year XX.X% of respectively, continued by Retail of X.X% QX the Jersey Frozen our Retail in biscuit period. This our grew to segment. into SUPERPRETZEL XX.X% Handheld the sales QX $X.X decrease or million increased the costs 'XX pretzel center. product prior resulted while 'XX retail margin New and 'XX. sales year period, associated of gross lower the operating declined

sales the prior increase convenience to increased it Beverage from compared by third by in million, million a versus XX.X% our restaurants. Machine period channels. operating amusement X.X%. year $X.X channels, QX 'XX, performance improved X.X% $X.X $XX.X QX equipment beat QX parks, mass to XX.X%, sales income Beverage driven or relates segment, 'XX QSR service QX were grew of convenience, and led growth the across segment key by sales Frozen Frozen higher sales while the also increased million in than Beverages, solid merchants 'XX. strong of including As X.X% revenues 'XX and

pricing gross improved goods clearly through mix of our benefiting line core results. focus of margin products, Our efficiencies expansion is on cost more an and

remain of quarter, This compared plans and of totaled compared flour, in environment inflation the $XX.X year. the for profit expect and ingredients, or softer of QX including favorably gross XX% in have For for a to confident profit margins better margin of gross QX the declined. in to to improve 'XX. Despite our fiscal led we we margin eggs to X.X% 'XX, experienced XX.X% the XX.X%, increase achieve consumer Overall, cost QX dairy oil, The to quarter. full slight 'XX. million, gross a of

products such was this in continue meats, novelties sugars, and inflation by sweeteners, However, chocolate which and impact frozen mixes, goods. offset to double-digit as baked

planned we to Total is Looking expenses the onetime to incurred our important New for of in reflecting and costs was once operating distribution this at $X.X Jersey. This X.X%, note the strategy a we million representing October It 'XX. in $X.X initiative. increased cost expected meaningful expenses. compared is quarter distribution QX of savings center drive million expenses, of to during sales network of the to our transition complete related or quarter, that cost XX.X% XX.X% opening second in

Our X.X% QX center marketing to XX% and costs. versus QX were as Marketing transition quarter in quarter open second sales in the X.X% to in the expenses hosting increase the million income compared led the 'XX, QX an year compared previously of earnings of and mentioned similar impact resources QX logistics fiscal million XX.X% to with operating $X.X a the of was to in onetime expenses operating in of reported resulting prior of compared in the prior and of management already for new EBITDA in $X.X from costs. The earnings $X.X year network distribution Arizona and our sales $X.X more million year or income compared in per and to in XX.X% effective net million improvement XX.X% million X.X% prior primarily favorable X.X% 'XX. After incremental third support compared Adjusted to distribution investments our in onetime $X.XX $XX.X the 'XX share national will the million, year-over-year -- and quarter. in will $X.X to Glendale, driven brands the $XX.X taxes $X.XX to attributable period, income the promotional increased of transition inflationary prior XXXX. well first of distribution across supply rate This core Distribution 'XX, to were chain. $X.XX environment period, pandemic. earnings XX.X% our time period, increase or and a in QX meeting per incur to compared for of since efficiency period year per even was tax $X.XX period. in to sales Adjusted was the expense in our share diluted initiatives first prior benefits incremental million driven selling X.X% in in period. Adjusted sales improve million by the were the the increased was to quarter of X.X% as share on compared products. Administrative by $XX.X prior costs increase

and with to $X continue we a in have balance debt. overall position cash strong million in position, liquidity liquidity our healthy approximately sheet million at Looking $XX and

and working Our ability initiatives capital more business. through investing to improve pay is in down stronger cash generating and to profitability flow cash continue debt, raise our dividends

to position, our continue the balance to continue will in investing focus Our business of and leverage and maintaining value on a shareholders. our prudent sheet us growth to returning enables healthy be which

call and plans turn the our summary, operator our addition, remain growth answers. would approximately like borrowing of and In we questions you. Thank to over profitable executing in our in value to ample revolver $XXX have now In capacity. under million I to additional we are for strategy availability and shareholders. continue our driving the confident to

first the Wolf CL line Andrew from of question comes King. Instructions] Our of [Operator

about I a quarter ask I with wanted handheld the row. this the guess product. it true-up cost to second was in contractual

model the on So and -- how occur it's out? happens first, swings been -- get the might that? that how normal your thing a Or is we, input that that and cost what's about handle just because outside, is nature calling going Like costs, such -- quarterly how kind can that a is big of forward? of to worth in there's that on try to think

-- as And are good costs prices I'm we're you that true-up. question. do saw coming want we add were to up, do is to we were quarterly. Ken, it that and a costs anything our doing seeing going down, as a It great. It's quarterly that?

phenomenon a reason It's call years. Andrew, the Yes. of we larger is out, few the amount. it The because last of

had on that that those the had that, quarter, deflation, years, commodities us ago, cost as big but profits So which been as that's is should XX%, that the sales customer. And months areas has has Andrew, to many lap significance opposite have And trued the quarterly, that it's cost drove XX it's the then X why up number been. opposite. reducing and been that and effect, in in we've passing obviously But up and area. we we on next for lapping should of as therefore, probably impact the an that be that

could commodity kind can And would you realize be of basis? like but... amount, least real Okay. it's give dollar earnings a the us think about I a we neutral what so on money, at

it's closer Yes, Andrew. $X -- million, million to $X.X over

ask and the And Internet. cookie to it. Costco at is replacing on with and a least situation wanted cookie. then Costco chip chocolate the -- the which follow-up them according Got materials I discontinuing to as with Churros,

to is wanted a would of the you up Costco? going And So it that firm impact rolled matured, look relationship is net-net where be those look like? to have kind you that your do end in events time what across with And accurate? is confirm, Subway, at guys that X when year's you of out? a And timing when

sheer has this offer SKU locations, happened there. is out we is in That within they've for really throughout excited Subways of and really XX,XXX it losing that there's limited of end numbers be past. Dan. is we impact we're about rotated things that a at menu product December. the that. what some opportunity a time. there and rotation our XX,XXX good towards the the at They In to will rotated Costco, today they point. That well. outweighs Subway their and really It's potentially periodically do and of accepted really, just the regards us, have Andrew, would Yes, a to account And done great being a Yes, off so contract, question. has different the the Subway They the that the by size saw locations, churro this outweighs

growth business. the churro about excited we're the So in

question Company. comes the from line next Our the Brooks Benchmark of of Todd

couple of as A questions well.

want results, either or really lines demand? during there that cost full Just if any the the was Or fourth some ramping market end to us on in the sales the at side look the on the -- there quarter of shortfall RDC revenue softer operational to friction new around up we did line new the coming just anything reflect ensure revenue quarter productivity? maybe

saw Todd, than No, but really, tightened market. well. inventories across customers, did just Yes. what as we with And is board, being our anything up the it more reflect softer really just the with not distributors

fact, have month. or that but Circana, we show When you In even would data inventories were narrowed strong during IRI look some certainly really at down. sales the

closer And so way. January those sales going affect that somewhere or could come back play. It it somewhere a inventories to spring. period you assumption period, in make happen But we might not in into the out get line, did side operational won't happen as a down the will that February but any

good it's channels from seeing slowdown February. obviously, And in prior are you tough customer the month in And now. How Food spend, they're of to a channel think traffic, hearing of But Obviously, what we just the January, the digesting you're Service? That's consumer kind going here. lap to points up of in for your what data do what's through Dan, January traffic through right consumer not about end bunch whether California different is the brought whether really There's hear. helping in a year. the here. you crosscurrents on Omicron holiday

quarter so certainly the time concerned reading we cautious makes in what we off think hard very Well, couple we're One, we will cautious the think like still not looks data A as well. And and doing, well. off sense cautious, and I I've be have close We're I to probably that do reading back our what same believe that think interesting that year. strategy we're we're like. is you're year, and inventory, inventory future confident come think out things read come today. pulled the long-term I really in I the about I up we're to just on a or play around. I we'll of seeing It's of come think another that the out that consumer that a are But back strong there lot and me. by

play seeks increases the that second see but time a of that's we we're is I there think a out softness of going higher reference people team get know like there. Overall, I that that And and feel price is for of I new at price little feel and don't they're until in look a long-term a level, say, it's the short-lived. bit period waiting that food play about generating are I a rapid predict shopping sure, what we may think that used for rate confident to don't come very back price for I what to The we its they that the still. a and the of price our we're had confident really think at they and kind down. it's pricing, such can caused just January, call own kind short-lived. business that water to that see February "Boy, I the year." and and executing, you

think great. that's I

ahead. go Sorry,

back little the it really XX% were growth quarter years look context give a and kind sales. X going XX% growth we back at Because QX. last stronger But not you expecting I of we're top consumer growth the bit of have some if over just QX on a did, at softness. ago a of and Sorry, when went the to I than laying more thought look X we year on could years, ago, we and

numbers. at significant as of year-over-year. played in we're about story post-COVID a have growth we of to that to on we're to opportunities So sales look top segments actually X some and chain, the to have but to you out that foundation to of the pretty quarter, there, top able lot that the saw supply and environment even positive kind in is grow in it what continue on know sales continue growth be the of on And really of happy building we

look one more, going Dan, into year fiscal back consumer is in 'XX, If deliver you made about you're we release the do on wins, can of here. what building does, I'll new Great. balance product at comment forward of end aside put at the the kind think momentum and you to looking the customer new pipeline the the sort just you're in the rate queue. sales growth the those what jump if the And what thinking we launches, then kind we is you for cross-sell did fiscal X, forward back consumer of see looking as success, the all 'XX? of and if adjust for consumer, as macro you're

even that Dave bakery I team to working some a We've lend and of but and we going is rate, Like I we Bavarian of into generating. it us of that on the what kicked some bakery point. Like growth the Retail iHola! kicked know Love things has at it's way rationalize exciting doing. cakeables, the and a some in moving speak cookies QSR I'm we I for that continued quarter SKUs, going and opening, things see things about of We've our just that this the got a the little opened we have lot right and on like great. we're excited that going again, actually talked just and unlimited working sticks convenience that which the the that impact narrow operational But bit number the you in the now if #X cookie with really out the the Todd. that growth and you escalate of opportunities our off. We're some give sticks now that buns and there position as club theaters The Churro on up going sell, and of of the happening area. how to that. might X don't a today. We've is the we to a have that's to and really working kind additional of this is some store is Subway Yes, on Buster's. they rolling opportunity we're off Dippin' our that that on that ICEE way remind gourmet the even the test the seasonal see And things install to talked & yesterday. right Glendale and can really, we margins. and to side, conversion DCs about X in the self-serve is that the way out the Dots about. The

looks And new we take so we're what by starting just to up, effect see as doing really those the fill well encouraged the lines that future like.

from comes William David question next Our of the line Shakno of Blair.

just in how last This wanted of balance for at And is the were price you the you some about also recall and Jon pricing to talk I call, in little David volumes 'XX? If Shakno then mentioned I the understand for Andersen. take from stepping calendar you're a Can volume bit. you looking at looking to areas year?

on kind the business things a Yes. speaks bit can can David, in. Again, for you're of vary area and what Overall, of consumer. depending you, volume tell the depending down to Well, I I some of think the we volume business little it quarter, somewhat was what X%, that again, but channel, talked X% about, to with on the

if So overall idea kind some we against company. can of at price the of that X.X%, get you at negative of where number look the kind for just you landed benefit

Dots January price As side, with in got inflation. commodities you Dippin' then December in a our ICEE deflation, well. And on took we lot you increase the you've with increase We snack you take -- in food January price a some some of or as business. look forward, got in a did got

to looking we opinion think has approach terms surgical a we've well a to price, taking in price increase that of points. an as but kind we're case So by where David really the market case, got place that, on of and

kind what's of and been So what's planned. that's done

we volume, bit forward kind makes cautious. a coming I we're a of Dan look on said, that of out As core us just would echo what

getting kind of of people that, week think of when be benefit still each into in that if data We every get there forward, that but the business. hoping we're volume, and we're out have of we're kind looking But might where is and at will I spring, consumer to sense us. launches front cautious some a you at our looking get slight out I in what's there improvement was about

For if thinking increase years been think, price think January, couple or past ICEE of so. that the Correct about similar each I'm January, same I it again? roughly should that in that me of price wrong. so the digits we to, has be mid-single we increases on Should the

Probably mid-single high where probably the but that, that. are as way a to were digit, not under hair as with about inflation, the X is years quite maybe last that in David, think some we

And first of then second be there? down on you you of 'XX? other and outline Historically, be, kind for for the can expecting And here pricing of half can. question regardless, think, I bps bit quarter to that takes that to outline fiscal kind commodities. I just if general, of I But mentioned that puts would if half gross higher tend XXX year. those than the you XXX Are half with thing, the second still one margins, the Great. a X great. just fiscal cadence you of some know kind in could then just little about the

even the points, sell bakery side budgets about that. relates this to for Yes. we -- challenges very exceeded saw ICEE margins internal Food good with We some gross and we're Yes, driving improve happy what on it with strong over that in gross We actually as basis Service. our doing our XXX profit margin we in performance quarter on of margins. still really profit feel we're the

doing. what So we we're like

mentioned working. heavier XX-plus are Dippin' some much expect we mixing that QX into which of out will in the point, What generate to as we makes ICEE, year much heavier think X, and and ago. highest those is did a to better. we're get your that initiatives And margin and percent businesses, we margin on X Dots, gross then our we are particularly focused those I

the think we above the sign to what a off of that. that in we've direction XX% kind moving we've first And is see reason year. for the talked back so we're in no And which done of good we right about, on getting quarter is what

next comes of the Our Rattigan Connor from Edge. line Consumer question of

Yes.

wanted on little on specifically Service the to line the just a I top touch bit, pressure. So Food

was a I guess, customer? pullback? in there? more channel maybe And it Or may be pricing was was a isolated select involved first to I a thing guess So or first, any this more broad-based deflationary there also,

There in pricing affected about our being really talked and We really being and at cookies. pies all. was affected Service Food no it deflationary through involved

volume as impact surgically, if we were our and on off we started so IRI inventory as data that's Circana to in Again, December, earlier, at reductions where that. that this through at a that And looked mentioned sizable saw that. And early looked good real. pretty you I looks and had and early it see November, late some

good portion do And feel like so related. complicate and you were these the know pulled already, this We back we've but we it. is consumer inventory that cautious a of inventories really so over we said is think as don't

in that back And holidays, orders. traffic get their life it particular trying that. shorter they on a kind areas. shelf retailers grocery to And down of just the they decline decline into year-over-year. mentioned top product But product and then you're to retailers a majority display start gets pie bakery to see The that's of stores, we the was cookies into and concerns and as coming on as magnify, so once about the of

number year-over-year And was a of so terms that in big comparison.

Got it.

you more deload inventory nothing the like should and the balance it pies throughout of sounds onetime that headwind saw a persist year. fair? I more the of whatnot, and the to Is So that and on be guess there

but stretch too, different data we find, onetime we is a yes, really, year a about business, for true. off watch right, doesn't that. really we're and to and be that, closely all at come going we're that why believe believe remember, business quarter cautious pies to points a that out be it can And quarters. Certainly, really We do the looking X and that

it. then that squeeze Got it. Got in. I'll for one And more just me

the expect traffic see maybe And consumption? maybe some on do of what we slowing more can quarter. you balance need and should more marketing light So I do to your some I of maybe year? step-up you the touch for or of And initiatives guess, in the a sort pretty the in advertising a significant spend in some mean, maybe there? of

doing his this think Connor. our of Yes. marketing believe build what We and done lot to is about ground with Lynwood grow. with brands are out -- I really we Mallard key a growth. And getting new of we're had love of we we brands investments a us these talked and really to those have that before, terms We investing both in continuing to marketing and team great that products a job and

to we invest so continue And accordingly.

benefits even Just lot that. to the of of and and spend the remember -- rest the has beyond a impacts of those that year

always you not QX our the against just be a kind look a it's -- of at contained much our QX, lowest bases. thing. will one in When It's quarter-by-quarter also of same. So sales

kind that a lower sales of got spend on base. You've

as So the [ low to to that probably in year should X.X% range. X.XX% level ] out through the we its get way in year, and of ultimately that sales

comes Jefferies. of next Dickerson the Robert question from of Our line

at Great. I -- hear of because to maybe doing Maybe still to basis, new I the just circle the provide nonbranded back asking relative and distribution Subway branded well. overall. of right? Because I'm new kind potential potential of around pretty to and guess of a kind hearing maybe performing kind like like performing portfolio cookies the of some situation I'm right? how you is just ICEE as see distribution kind or great, pies the recently doing color SUPERPRETZEL versus what kind to

on -- some branded a bit side. the also provides momentum uplift there's sounds almost mix more that over it And positive side So non-branded like mix margin time. the little usually, maybe versus

be just So there great. updated thoughts any would

that's really question. a good Rob,

We've SUPERPRETZEL, is about branded that our think release been the this. have are market I to really the we brands and our opportunity talked know like And in You well. Within we've and it products really advertise branded doing that well fact get to an accepted out team able there that out products. I being our several really, products, I right? times. some new industry. love really good love

some about nice prior that should feels timing. from natural that like seeing a Bavarian it done we're this, sticks. we like lifts have think to Almost I maybe the so is but everything And

are branded opportunities. and And our have so real some do I like think going products where we

think and Churros I grow really a our We're pace. at Dogsters Retail iHola! still have opportunities. some great nice seeing

branded our organization. that's continue our as in our are so brands products well, and our of core to growing X And push strategies we'll

on going more side do churro supplier, the we continue at. opportunities extremely we doing we business our like well than of other continue a think that just there's if opportunities the we right have we're with have look Churros churro And nonbranded to some However, opportunity as the to and it's now. That's that well. good to be

I have a So balancing growth way act, right? always, we that too. think It's some nice going

for opportunities the makes And around love so there's brands to to nonbranded. them really behind advertise going us we're good some going we're out also an get sense them, opportunity those to because an push do but right the we that and things, them organization and and of as seek

All right. Great.

at low. very one-off some there Another segment. look margin, dynamic the of I Supermarket Retail op feels And your little one. kind a guess that just be business, true-up could clearly, specifically, just quick I when maybe just in in I

don't amount business why clearly if to X where and think have single like doing like could low margin is get what like like digit we branded you, that business kind longer of I'm kind low in forward margin? well kind op high is that you're to and kind a is of can X, gauge kind business what of then later. years, then trying so or of that we to gauge we think that just today trying operating to of double-digit if term, now? of that, the a I come decent And know, do maybe Just are

Rob, Yes. question. thanks. Great

just on bit Retail operating me a little income. provide Let more clarity

in included number of expense. million onetime distribution So that $X.X is that roughly

that one-timer, income a that starts X.X%. kind if you're to change have out that adjusting roughly little about would bit. Operating So think, picture grown, a thinking I of as

a the of leveling in consumer couple that bit says more this think our higher ordered of Luigi's, somewhat areas. factor mix on And many that in, after lower sales are customer inventory we in the you it of mentioned Again, novelties. like sell, that novelty areas many frozen but data of because a of we got and impact If chain and less. challenges, in tied is was margin gross into supply that kind those in Handheld on bought doing that Frozen a we've

that think its retail work So way we business. we will Yes, get can think out. that we

Certainly we I into that to think get things. and QX, ended it QX, up some once we range. improve cycle if closer expected of that up mid-single-digit was to these moving range

a just quarters. And only it's saying super. question. thrown consistently right? of being a not Consumer theoretical. lot then company All cautious, that, be more term cautious, the X last More you're hear seeking right? right, value maybe around clearly a Clearly, more today, the bit We over to little little past saying couple bit seems the

of seasonal -- that kind the are left, X kind but of to X, business. enter, about you to start on about uplift probably are guys You months enter

about the then think get of an And So process a thought cautious discretionary. a just a we price when it's it's need Like some having argue could state, maybe the kind state, as ICEE argue others also some we right? that more think little year. about is mandatory, through of we drink launch might more points, bit right? It's

So don't we're a Are there know, consumption? bit promote channels just I'm sit try kind amusement a where can in like these I little more, of you're little or like today, May, you June, all varied go. and push parks, where opening put to signage if about basically into where bit the more maybe time you consumer out just curious of about time it's right, areas thinking like all really to

us There for Absolutely. are really ICEE Rob. to well. that. ways do Yes, that does

week, Steve part energize the even that we Avery, as led that. as months, soon is by we sales of last can revisiting team the signage all right? ways fact, as have get And to core been a those big In

about and flavor promotional a the something front of or in lines. that. out along talking customer BOGOs Our big Getting of items that becomes or rotations part

that that we love teams we able that hope And an peak than And the selling as in across in to And can. get can spread we're doing ICEE country. engaged I impulse get be rather into your proactive that being need that season going so I to are that. to sure item. we everything we're about already thought make the

I like Sir? President and back turn for to conference remarks. would to CEO, Fachner, now closing the Dan

you. Thank Great.

The questions as forward Investor a to consumer that to environment Have XXX-XXXX. you wish and J&J good throughout turn us, updating and and continue you at to incremental in continue please contact the continued to us executing for the JCIR, channels customers growth fiscal much. progress look improves. have We we we well is our team we across As facets In our speak any we opportunities overall on or Relations our business, to confident positions XXX serve. This XXXX, Thank growth afternoon. profits. of sales secure remain growing the strategy all the across interim, XXXX. firm, should you to very

for This concludes today's conference call. participating. you Thank

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