Q1 2024 Campbell Soup Co Earnings Call

Speaker 1: Greetings ladies and gentlemen and welcome to the Campbell Soup Company First Quarter Fiscal 2020 for Earnings Conference Call. At this time all participants are in listen only mode. After today's presentation there will be an opportunity to ask questions. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one. As a reminder this conference call is being recorded.

Greetings, ladies and gentlemen, and welcome to the Campbell Soup Company first quarter fiscal 2024 earnings conference call.

At this time all participants are in listen only mode. After today's presentation.

<unk> there will be an opportunity to ask questions. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again prestige Star one as a reminder, this conference call is being recorded.

Speaker 2: It's now my pleasure to introduce your host, Rebecca Gardie, Chief Investor Relations Officer. Please go ahead.

It's now my pleasure to introduce your host Rebecca Gardy Chief Investor Relations Officer. Please go ahead.

Good morning, and welcome to Campbell's first quarter fiscal 'twenty 'twenty four earnings conference call I'm, Rebecca Gardy, Chief Investor Relations Officer of Campbell, joining me today are Mark Clouse, Chief Executive Officer, and Carrie Anderson, Chief Financial Officer, today's remarks had been prerecorded once we conclude the prepared remarks.

Speaker 3: Good morning and welcome to Campbell's first quarter fiscal 2024 earnings conference call. I'm Rebecca Gardie, Chief Investor Relations Officer at Campbell's.

Speaker 4: Joining me today are Mark Klaus, Chief Executive Officer and Carrie Anderson, Chief Financial Officer. Today's remarks have been prerecorded. Once we conclude the prepared remarks, we will transition to a live webcast Q&A session. The slide deck and today's earnings press release have been posted to the investor relations section on our website, Campbellsoupcompany.com.

We will transition to a live webcast Q&A session.

Slide deck in today's earnings press release has been posted to the Investor Relations section on our website Campbell soup company Dot com. Following the conclusion of the Q&A session. A replay of the webcast will be available at the same location followed by a transcript of the call within 24 hours on our call today, we will make forward looking statements which are.

Speaker 5: Following the conclusion of the Q&A session, a replay of the webcast will be available at the same location, followed by a transcript of the call within 24 hours.

Speaker 6: On our call today, we will make forward-looking statements, which reflect our current expectations. These statements rely on assumptions and estimates, which could be inaccurate and are subject to risk. Please refer to slide 3 of our presentation or our SEC filings for a list of factors that could cause our actual results to vary materially from those anticipated in the forward-looking statement.

Select our current expectations. These statements rely on assumptions and estimates, which could be inaccurate and are subject to risk. Please refer to slide three of our presentation or our SEC filings for a list of factors that could cause our actual results to vary materially from those anticipated in the forward looking statements because we use non-GAAP measure.

Speaker 7: Because we use non-GAAP measures, we have provided a reconciliation of each of these measures to the most directly comparable GAAP measure in the appendix of our presentation.

We have provided a reconciliation of each of these measures to the most directly comparable GAAP measure in the appendix of our presentation.

Speaker 8: Slide four outlines today's agenda. Mark will provide insights into our first quarter performance, as well as in-market performance by division. Kerry will then discuss the financial results of the quarter in more detail and outline our guidance for the full fiscal year 2024, which we reaffirmed this morning. And with that, I'm pleased to turn the call over to Mark.

Slide four outlines today's agenda, Mark will provide insights into our first quarter performance as well as in market performance by Division Carey will then discuss the financial results of the quarter in more detail and outline our guidance for the full fiscal year 'twenty 'twenty, four which we reaffirmed this morning and with that I'm pleased to turn the call over.

Her to Mark.

Speaker 9: Thanks, Rebecca. Good morning, everyone, and thank you for joining our first quarter fiscal 2024 earnings call.

Thanks, Rebecca good morning, everyone and thank you for joining our first quarter fiscal 2024 earnings call from.

Speaker 10: From Campbell's management team, we hope you enjoyed a happy Thanksgiving with family, friends and of course, some green bean casserole and Pepperidge Farm stuff.

From Campbell's management team, we hope you enjoyed a happy Thanksgiving with family friends and of course, some green Bean casserole and Pepperidge farm stuffing.

Speaker 11: As you saw in our press release this morning, we reported first quarter results with top line coming inconsistent with our expectations and adjusted EBIT and adjusted EPS coming in slightly ahead as we lapped one of our strongest quarters with 15% growth across all three key metrics in the prior year. I am pleased with these results as we continue to navigate and evolving and challenging consumer environment.

As you saw in our press release. This morning, we reported first quarter results with top line coming in consistent with our expectations and adjusted EBIT and adjusted EPS coming in slightly ahead, as we lapped one of our strongest quarters with 15% growth across all three key metrics in the prior year.

I am pleased with these results as we continue to navigate an evolving and challenging consumer environment.

Speaker 12: We also made material progress advancing the key initiatives of our focus strategic plan and continued to build confidence in the next stage of Campbell's growth.

We also made material progress advancing the key initiatives of our focused strategic plan and continued to build confidence in the next stage of Campbell's growth I am encouraged by the consistency of our outstanding execution, including strong sustained performance across our supply chain numerous successful innovations and marketing.

Speaker 13: I am encouraged by the consistency of our outstanding execution, including strong sustained performance across our supply chain, numerous successful innovations and marketing programs, and more recently improving share trends.

Programs and more recently improving share trends.

Speaker 14: We achieved all this while maintaining our margin and earnings expectations.

We achieved all of this while maintaining our margin and earnings expectations.

Speaker 15: Going forward, we anticipate these areas of focus to fuel sequential improvement over the course of the year.

Going forward, we anticipate these areas of focus to fuel sequential improvement over the course of the year generating momentum in terms of revenue volumes market share and profit margins, particularly as we head into the second half of fiscal 'twenty four as a result, we remain confident and are affirming our full year.

Speaker 16: Generating momentum in terms of revenue, volumes, market share, and profit margins, particularly as we head into the second half of fiscal 24. As a result, we remain confident and are affirming our full year guidance.

Your guidance, we believe this building momentum paired with the pending acquisition of so those brands will set the stage for accelerated growth and solidify Campbell's position as one of the most dependable names in food.

Speaker 17: We believe this building momentum paired with the pending acquisition of Sovos brands will set the stage for accelerated growth and solidify Campbell's position as one of the most dependable names in food.

Speaker 18: Turning to slide seven, as expected, organic net sales decreased by 1%, the $2.5 billion, following a 15% increase in the prior year, resulting in growth of approximately 7% on a two-year compound annual growth rate based...

Turning to slide seven as expected organic net sales decreased by 1% to $2.5 billion. Following a 15% increase in the prior year, resulting in growth of approximately 7% on a two year compound annual growth rate basis adjusted.

Speaker 19: Adjusted EBIT and adjusted EPS to climb 9% and 11% respect.

EBIT and adjusted EPS declined, 9% and 11% respectively.

Speaker 20: Following a 15% increase in both key measures the prior year, our dollar consumption was down 2%, but grew 8% versus 2 years ago.

Following a 15% increase in both key measures the prior year, our dollar consumption was down 2%, but grew 8% versus two years ago.

Speaker 21: In line with expectations, we communicated during our fourth quarter earnings call, the Consumer Landscape remains challenging.

In line with expectations, we communicated during our fourth quarter earnings call the consumer landscape remains challenging.

Speaker 22: However, we have many opportunities within our portfolio to meet these shifting macro consumer trends and have optimized our strategies and plans concentrating on three key areas. First, we're dedicated to ensuring the affordability of our products and maintaining competitive price gaps within our margin goals.

However, we have many opportunities within our portfolio to meet the shifting macro consumer trends and have optimized our strategies and plans concentrating on three key areas first we're dedicated to ensuring the affordability of our products and maintaining competitive price gaps within our margin.

Goals. This is particularly important, especially as consumers seek to maximize the value of their spending stretching their budgets to cover the cost of family meals every day and during the important holiday season.

Speaker 23: This is particularly important, especially as consumer seek, to maximize the value of their spending, stretching their budgets to cover the cost of family meals every day and during the important holiday season.

Speaker 24: Second, we are committed to sustaining our marketing and innovation plans. This is critical not only to reinforce the value and differentiation of our products, but also to continue to build the long-term equity of our brands, on which we've made significant progress in recent years.

Second we are committed to sustaining our marketing and innovation plans. This is critical not only to reinforce the value and differentiation of our products, but also to continue to build the long term equity of our brands are which we've made significant progress in recent years.

Speaker 25: Finally, our approach to spending remains disciplined and balanced, focused on high ROI and impactful programs. We are driving productivity and making appropriate trade-offs to fuel this investment, while we protect our margin and earnings object...

Finally, our approach to spending remains disciplined and balanced focused on high ROI and impactful programs, we are driving productivity and making appropriate trade offs to fuel. This investment while we protect our margin and earnings objectives, where support has been added we believe it's both sustainable and.

Speaker 26: where support has been added, we believe it's both sustainable and profit.

Profitable.

Speaker 27: We intend to maintain this focused approach throughout fiscal 24, and we are confident that we will build momentum as the year progresses and continue to deliver our financial commitment.

We intend to maintain this focused approach throughout fiscal 'twenty four and we are confident that we will build momentum as the year progresses and continue to deliver our financial commitments.

Speaker 28: We remain confident in this forecasted improvement in trends throughout the year for a number of reasons.

We remain confident in this forecasted improvement in trends throughout the year for a number of reasons, it's important to recall that our growth rates in the first half of fiscal 'twenty three averaged in the mid teens and subsequently tapered down to mid single digit growth in the second half.

Speaker 29: It's important to recall that our growth rates in the first half of fiscal 23 averaged in the mid teens and subsequently tapered down the mid single digit growth in the second half.

Speaker 30: This approximate 10 point decline in part reflected as slowing and incremental pricing. These more modest comparable post Q2 support our expectations for improving top line and volume.

This approximate 10 point decline in part reflected a slowing in incremental pricing. These more modest comparables post Q2 support our expectations for improving topline and volumes.

Speaker 31: In addition, we have a robust pipeline of innovation and marketing programs informed by the current consumer trends to also fuel the improving outlook. So although the consumer landscape remains dynamic, we are well positioned for improvement and will continue to plan contingencies and remain nimble as we navigate the balance of the year.

In addition, we have a robust pipeline of innovation and marketing programs informed by the current consumer trends. So also fueled the improving outlook. So although the consumer landscape remains dynamic we are well positioned for improvement and we'll continue to plan contingencies and remain nimble as we navigate the balance of the.

A year.

Speaker 32: Turning to our meals and beverages division, as planned, we experienced a low-to-mid single-digit decline in top line and consumption in the first quarter. On a two-year compound annual growth rate basis, organic net sales were up 6%, and dollar consumption was up 1%. The difference in net sales and consumption growth rates reflect the strength in our food service business and unmeasured channels, as well as a year ago supply and inventory recovery.

Turning to our meals and beverages division as planned we experienced a low to mid single digit decline in topline and consumption in the first quarter.

On a two year compound annual growth rate basis organic net sales were up 6% and dollar consumption was up 1%. The difference in net sales and consumption growth rates reflect the strength in our foodservice business and unmeasured channels as well as a year ago supply and inventory recovery within.

Within these results, we find many reasons to remain confident in the trajectory of the business, as consumers depend more and more on affordable, stretchable meal solutions, which is at the core of our meals and beverages division.

These results we find many reasons to remain confident in the trajectory of the business as consumers depend more and more on affordable stretching will meal solutions, which is at the core of our meals and beverages Division.

Turning to our soup portfolio on slide 11, as anticipated, throughout the summer we experience decreases in dollar consumption overall. However, within these results there are pockets of strength. For example, as consumers sought to stretch their food budgets, they turned to the strong value and convenience of the cooking portions of our portfolio.

Turning to our soup portfolio on slide 11 as anticipated throughout the summer we experienced decreases in dollar consumption. Overall. However, within these results. There are pockets of strength for example, as consumers sought to stretch their food budgets. They turned to the strong value and convenience of the cooking portions of our.

Portfolio.

In fact, in our condensed cooking portfolio, we gained dollar share for the fifth consecutive quarter, increasing 1.5 share points in the quarter. Even among younger households, we continued to see long-term potential, as household penetration of total condensed cooking soups gained 0.4 points versus the prior year.

In fact in our condensed cooking portfolio, we gained dollar share for the fifth consecutive quarter, increasing 1.5 share points in the quarter, even among younger households, we continued to see long term potential as household penetration of total condensed cooking soups gained 0.4 points versus the prior year.

In our broth business, we continue to drive relevance among consumers in this dynamic environment, as total broth was up 4% behind the strength of our Pacific broth portfolio, which saw dollar consumption grow 16%, well above the category rate.

And our broth business, we continue to drive relevance among consumers in this dynamic environment as total broth was up 4% behind the strength of our Pacific broth portfolio, which saw dollar consumption grow 16% well above the category rate.

The ready to serve and condensed eating businesses experienced more pressure in the quarter as a result of more consumer shifting to more stretchable meals versus single serve option.

The ready to serve and condensed eating businesses experienced more pressure in the quarter as a result of more consumers shifting to more stretch of bold meals versus single serve options.

Turning to page 12, as we have begun ramping up plans support and anticipation of the important holiday season, trends have been improving, especially as it relates to share. In fact, over the latest four weeks, including Thanksgiving, we've seen improvement in all segments driving overall dollar and unit share gains, including a point two improvement in dollar share, as well as a point nine improvement in unit share.

Turning to page 12, as we have begun ramping up plans support in anticipation of the important holiday season trends have been improving especially as it relates to share in fact over the latest four weeks, including Thanksgiving, we've seen improvement in all segments driving overall dollar and unit share gains.

Including a point to improvement in dollar share as well as a 0.9 improvement in unit share for our very important total soup business importantly, we're doing this with modest incremental investment as we are seeing more retailers actively returning to Campbell's brands from private label a year ago. This.

for our very important total-soup business. Importantly, we are doing this with modest incremental investment as we are seeing more retailers actively returning the Campbell's brands from private label a year ago. This is providing an outsized benefit while we continue to balance the critical interplay between growing share volumes and margins in line with our expectations.

Providing an outsized benefit while we continue to balance the critical interplay between growing share volumes and margins in line with our expectations.

Although the category remains somewhat under pressure on dollars, it's very encouraging to see improvement in both share and units as we had deeper into our key season. Turning to our snacks business, we delivered first quarter organic net sales growth of 1%, consistent with the increase in dollar consumption.

Although the category remains somewhat under pressure on dollars, it's very encouraging to see improvement in both share and units as we had deeper into our key season, turning to our snacks business. We delivered first quarter organic net sales growth of 1% consistent with the increase in dollar consumption our power brands.

Our power brands grew net sales by a solid 5% following a 21% increase in the prior year. For a 13% growth on a 2 year compound annual rate base.

Grew net sales by a solid 5% following a 21% increase in the prior year for a 13% growth on a two year compound annual rate basis, even with some emerging broader category pressure due to the consumer dynamics that we discussed earlier, our eight power brands have shown remarkable rig.

Even with some emerging broader category pressure due to the consumer dynamics that we discussed earlier, our eight power brands have shown remarkable resilience. With brands like Goldfish and Lance posting net sales growth of 5% and 15% respect.

<unk> with brands like goldfish, and Lance posting net sales growth of 5% and 15% respectively. The strength of our power brands was tempered in the quarter by lower margin partner brands and fresh bakery as those businesses are somewhat more vulnerable to private label in consumer trade down on the.

The strength of our power brands was tempered in the quarter by lower margin partner brands and fresh bakery. As those businesses are somewhat more vulnerable to private label and consumer trade

On the following slide, we highlighted the continued strength of each of our power breaths.

The following slide we highlighted the continued strength of each of our power brands dollar consumption grew 3% versus the prior year and 19% versus two years ago, while five of eight power brands held or gained share in the quarter.

Dollar consumption grew 3% versus the prior year, and 19% versus two years ago, while five of eight power brands held or gained share in the quarter.

Our eight power brands, which now represent approximately two thirds of division that sales, remain a powerful and consistent growth engine even in the current consumer environment.

Our eight power brands, which now represent approximately two thirds of division net sales remain a powerful and consistent growth engine, even in the current consumer environment.

Turning to slide 15, a prime example of our Snacks Power Brand growth engine is Goldfish. For the fifth consecutive time, Goldfish has been named teens most preferred snack brand according to Piper Sandler's Taking Stock with teens. Most recently in the fall 2023 service.

Turning to slide 15, a Prime example of our snacks power brand growth engine is goldfish for the fifth consecutive time goldfish has been named teens, most preferred snack brand. According to Piper Sandler taking stock with teens. Most recently in the fall 'twenty twenty-three survey.

This recognition is the result of the remarkable work of our cross-functional teams in expanding the brand to a broader audience and adding manufacturing capacity to meet the incredible demand for this product. We continue to see share strength in the overall portfolio as Goldfish marked its fifth consecutive quarter of holding or gaining dollar share.

This recognition is the result of the remarkable work of our cross functional teams and expanding the brand to a broader audience and adding manufacturing capacity to meet the incredible demand for this product we continue to see share strength in the overall portfolio as goldfish marked its fifth consecutive quarter.

Of holding or gaining dollar share what are the keys to our goldfish success has been a steady drumbeat of innovation on this front, we're excited to bring to consumers. Our latest limited time offer for the holiday season, Goldfish Elf Maple syrup flavored grams in partnership with Warner Brothers Discovery sell.

One of the keys to our Goldfish success has been a steady drum beat of innovation.

On this front, we're excited to bring to consumers our latest limited time offer for the holiday season. Goldfish, Elf, maple syrup flavored grams in partnership with Warner Brothers Discovery, celebrating the 20th anniversary of its iconic movie Elf.

Abrading the 20th anniversary of its iconic movie Elf is there anything better than maple syrup, goldfish to spread holiday cheer and it's perfect for stocking stuffers or snacking all season long.

Is there anything better than maple syrup goldfish to spread holiday cheer and it's perfect for stocking stuffers or snacking all season long?

And there's even more exciting innovation in goldfish and store this year. Adding to the incredible success of innovations like goldfish megabytes and our run of limited time offers, we are reinventing the category again in a way only goldfish can with the introduction of goldfish crisps. Chris, for the way that goldfish does chips, the best of goldfish with the best of chips combined into an irresistible, light, airy, crispy, fish-shaped, bake snack.

And there is even more exciting innovation in goldfish and store this year, adding to the incredible success of innovations like goldfish megabytes and our run of limited time offers we are reinventing the category again in a way only goldfish can with the introduction of goldfish crisps, Chris with the way the goldfish does.

<unk> chips, the best of goldfish with the best of chips combined into an irresistible light airy crispy fish shaped baked snack launching in three craveable flavors goldfish, Chris will be available at retailers nationwide in January.

Launching in three cravable flavors, Goldfish Criss will be available at retailers nationwide in January .

On slide 17, I want to highlight the margin momentum that the Snacks Division has demonstrated. On a two-year compound annual growth rate basis, we grew Snacks organic net sales by 8%, and operating earnings by 12%, with approximately 130 basis points of margin expansion. Consistent with our long-term margin roadmap of achieving 17%, we remain confident in fiscal 24 expectations to finish above 15%.

On slide 17, I want to highlight the margin momentum that the snacks division as demonstrated on a two year compound annual growth rate basis, we grew snacks organic net sales by 8% and operating earnings by 12% with approximately 130 basis points of margin expansion consistent with our <unk>.

Long term margin roadmap of achieving 17%, we remain confident in fiscal 'twenty four expectations to finish above 15%.

And now we're adding even more fuel to our snacks, growth, and margin journey with our DSD transformation initiative.

And now we're adding even more fuel to our snacks growth and margin journey with our DSD transformation initiative. This includes three key elements you see on slide 18, two of which were already progressing first creating one snacking DSD logistics and warehouse network. This multi.

This includes three key elements you see on slide 18.

two of which were already progressing. First, creating one snacking DSD logistics and warehouse net.

This multi-year program will streamline our logistics and warehouse network, eliminate redundancy, simplify our network, and improve our technology and capabilities within our warehouses and depots.

Your program will streamline our logistics and warehouse network eliminate redundancy simplify our network and improve our technology and capabilities within our warehouses in depots second modernizing and harmonizing tools and technology used by our critical independent distribution partners. This will enable.

Second, modernizing and harmonizing tools and technology used by our critical independent distribution partner.

This will enable new capabilities and help enhance effectiveness and focus.

New capabilities and help enhance effectiveness in focus.

In addition, this will also allow better retailer linkage and alignment to orders while improving in-store insights.

In addition, this will also allow better retailer linkage and alignment to orders, while improving in store insights.

And third, we'll focus on DSD routes. The good news is the vast majority of geographies already have scaled routes. And in combination with the upgrades from the first two elements of our DSD transformation, these will be fully optimized going forward.

And third we'll focus on DSD routes. The good news is the vast majority of geographies already have scaled routes and in combination with the upgrades from the first two elements of our D. S. T transformation these will be fully optimize going forward to.

To help improve geographies where routes are not operating at full scale, we're piloting a variety of potential solutions with encouraging early results. I'll share more about this third and very important element in our Q2 earnings call.

To help improve geographies, where routes are not operating at full scale. We're piloting a variety of potential solutions with encouraging early results I'll share more about this third and very important element in our Q2 earnings call.

We're excited to have made so much progress on such a unique and critical part of our business. And in the end, this will result in a strong and differentiated DST platform to fuel both the growth and margins of the snacks business.

We're excited to have made so much progress on such a unique and critical part of our business and in the end. This will result in a strong and differentiated DSD platform to fuel both the growth and margins of the snacks business before I conclude let me provide a brief update on the status of our pending acquisition of service brands.

Before I conclude, let me provide a brief update on the status of our pending acquisition of SOS Brand.

As we announced in October , we received a second request for information from the Federal Trade Commission as part of the agency's review of Campbell's proposed acquisition. We are working hard to complete those requests and are advancing our integration planning. I continue to be impressed with the strong results the SOVA's team is delivering and could not be more excited about completing the acquisition and fueling our next chapter of growth.

As we announced in October we received a second request for information from the Federal Trade Commission as part of the Agency's review of Campbell's proposed acquisition. We are working hard to complete those requests and are advancing our integration planning I continue to be impressed with the strong results. The service team is.

Delivering and could not be more excited about completing the acquisition and fueling our next chapter of growth.

We expect to complete the deal in the next calendar year and will continue to engage with the FTC on their review with the objective of closing the transaction in mid 2024.

We expect to complete the deal in the next calendar year, and we'll continue to engage with the F. T. C. On their review with the objective of closing the transaction in mid 'twenty 'twenty four.

In closing, the first quarter unfolded much as we anticipated, continuing our consistent track record of meeting our commitment.

In closing the first quarter unfolded much as we anticipated continuing our consistent track record of meeting our commitments looking ahead, I'm confident and optimistic about the balance of the year, we will remain vigilant and agile to meet the evolving demands of consumers, while continuing to progress our strategic.

Looking ahead, I am confident and optimistic about the balance of the year. We will remain vigilant and agile to meet the evolving demands of consumers while continuing to progress our strategic plans.

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With that, I'd like to wish all of you and my colleagues across the company a happy holiday season and thank the entire team at Campbell's for their ongoing incredible and impactful work. And now I'll pass it the carry. Thanks, Mark, and good morning, everyone. I'll begin with an O-

With that I'd like to wish all of you and my colleagues across the company a happy holiday season, and thank the entire team at Campbell's for their ongoing incredible and impactful work and now I'll pass it to Kerry.

Thanks, Mark and good morning, everyone.

I'll begin with an overview of our first quarter results as Mark indicated our topline finished as we anticipated and adjusted EBIT and adjusted EPS came in slightly better primarily due to the timing of adjusted marketing selling and administrative expenses.

As Mark indicated, our top line finished as we anticipated, an adjusted EBIT and adjusted EPS came in slightly better, primarily due to the timing of adjusted marketing, selling, and administrative expense.

Our organic net sales decline of 1% reflects mid-single digit expected volume declines, a lower contribution from pricing, and discipline levels of promotion activity.

Our organic net sales decline of 1% reflects mid single digit expected volume declines a lower contribution from pricing and disciplined levels of promotion activity.

Lapping a 15% increase in organic net sales in the prior year, organic net sales grew approximately 7% on a two-year compound and annual growth.

Lapping a 15% increase in organic net sales in the prior year organic net sales grew approximately 7% on a two year compounded annual growth rate.

Adjusted EBIT decreased 9% to $407 million reflecting lower adjusted gross profit, a commitment to continued marketing and selling investments, and lower benefits from pension and post-retirement income, partially offset by a lower adjusted administrative expense.

Adjusted EBIT decreased 9% to $407 million, reflecting lower adjusted gross profit our commitment to continued marketing and selling investments and lower benefits from pension and post retirement income.

Partially offset by lower adjusted administrative expenses.

Adjusted EPS decreased 11% to 91 cents, driven primarily by lower adjusted ebit and slightly higher interest expense. Partially offset by a reduction in the weighted average diluted shares outstanding.

Adjusted EPS decreased 11% to 91 cents, driven primarily by lower adjusted EBIT and slightly higher interest expense, partially offset by a reduction in the weighted average diluted shares outstanding.

Slide 22 summarizes the drivers of our first quarter net sales performance.

Slide 22 summarizes the drivers of our first quarter net sales performance.

excluding the impact of the Emerald Nut Business Investiture, organic net sales declined 1%.

Excluding the impact of the Emerald nut business divestiture organic net sales declined 1%.

We generated three percentage points of growth from net price realization and volume and mix declined five percentage points in line with expectation.

We generated three percentage points of growth from net price realization and volume and mix declined five percentage points in line with expectations.

As shown on slide 23, our first quarter adjusted gross profit margin of 32.1% decreased a modest 10 basis points, with the year-over-year change in margin driven primarily by unfavorable volume and mix.

As shown on slide 23, our first quarter adjusted gross profit margin of 32.1% decreased a modest 10 basis points with the year over year change in margin driven primarily by unfavorable volume and mix.

As shown on the bridge, the combination of net price realization, productivity improvements, and cost savings initiatives offset higher cost inflation and other supply chain costs.

As shown on the bridge the combination of net price realization productivity improvements and cost savings initiatives offset higher cost inflation and other supply chain costs.

Turning to 524, we continue to successfully mitigate inflationary headwinds with corn inflation moderating to 2% in the first quarter, driven by attenuation in key inputs such as flour and oil. We expect cornflation to stay within this low single digit range for the full year, down from the 12% we saw in fiscal 23.

Turning to slide 24, we continue to successfully mitigate inflationary headwinds with core inflation moderating to 2% in the first quarter driven by attenuation in key inputs, such as flower and oil we expect core inflation to stay within this low single digit range for the full year down from the 12% we saw in <unk>.

23.

Net pricing averaged 3% for the quarter, reflecting the contribution from our way for pricing, our smallest and most focused pricing round. As a reminder, our way for pricing will be fully laughed at the end of Q2 fiscal 24.

Net pricing averaged 3% for the quarter, reflecting the contribution from our way for pricing, our smallest and most focused pricing round as a reminder, our wafer pricing will be fully lapped at the end of Q2 fiscal 'twenty four in.

In addition to pricing, we continue to deploy a range of other levers to mitigate inflation, including supply chain productivity improvements and broader margin enhancing initiatives, including a focus on discretionary spending across the organization. These other levers will start to have a greater contribution to margin performance as inflation continues to moderate and volume normalizes, especially as we move into the second half of the fiscal year.

In addition to pricing we continue to deploy a range of other levers to mitigate inflation, including supply chain productivity improvements and margin enhancing initiatives, including a focus on discretionary spending across the organization. These other levers will start to have a greater contribution to margin performance as inflation continues.

To moderate and volume normalizes, especially as we move into the second half of the fiscal year.

We are pleased with the progress we have made on our cost savings initiative.

We are pleased with the progress we have made on our cost savings initiatives.

Through the first quarter, we have achieved $895 million of total savings under our multi-year cost savings program, inclusive of Snyder Lance Synergies. We remain on track to deliver savings of $1 billion by the end of fiscal 2020.

The first quarter, we have achieved $895 million of total savings under our multiyear cost savings program inclusive of Snyder's Lance synergies, we remain on track to deliver savings of $1 billion by the end of fiscal 2025 moving onto other operating items adjusted marketing and selling expenses.

Moving on to other operating items, adjusted marketing and selling expenses increased 9% driven by higher selling expenses, higher advertising and consumer promotion expense, or ANC, which increased 6% compared to the prior year, and higher other marketing expenses.

<unk> increased 9% driven by higher selling expenses higher advertising and consumer promotion expense or a N C, which increased 6% compared to the prior year and higher other marketing expenses on both a reported and adjusted basis marketing and selling expenses represented approximately 9% of net.

On both a reported and adjusted basis, marketing and selling expenses represented approximately 9% of net sales for the quarter.

Sales for the quarter adjusted administrative.

Adjusted administrative expenses decreased by $5 million due to lower general administrative cost, partially offset by inflation.

Administrative expenses decreased by $5 million due to lower general administrative costs, partially offset by inflation.

We saw some timing favorability and adjusted marketing, selling, and other administrative expenses in the quarter, but expect this to be refazed into Q2 to keep the first half in line with expectations.

We saw some timing favorability in adjusted marketing selling and other administrative expenses in the quarter, but expect this to be re phased into Q2 to keep the first half in line with expectations.

As shown on site 26, adjusted EBIT for the first quarter decreased 9%, primarily due to lower adjusted gross profit, higher adjusted marketing and selling expenses, and lower benefits from pension and post-retirement income, partially offset by lower adjusted administrative expenses.

As shown on slide 26, adjusted EBIT for the first quarter decreased 9%, primarily due to lower adjusted gross profit higher adjusted marketing and selling expenses and lower benefits from pension and post retirement income, partially offset by lower adjusted administrative expenses.

Overall, our adjusted EBIT margin decreased to 16.2% in the quarter, primarily driven by higher adjusted marketing and selling expenses, and changes in pension and post-retirement benefit income.

Overall, our adjusted EBIT margin decreased to 16.2% in the quarter, primarily driven by higher adjusted marketing and selling expenses and changes in pension and postretirement benefit income.

Turning to 527, adjusted EPS of 91 cents was down 11% or 11 cents per share compared to the prior use.

Turning to slide 27, and adjusted EPS of <unk> 91 cents was down 11% or 11 cents per share compared to the prior year.

This was primarily driven by the decrease in adjusted e-bent and slightly higher interest expense, partially offset by reduction in the weighted average diluted shares outstanding.

This was primarily driven by the decrease in adjusted EBIT and slightly higher interest expense, partially offset by a reduction in the weighted average diluted shares outstanding.

Changes in pension and post retirement benefit income drove an approximate one cent impact to adjusted EPS in the quarter.

<unk> and pension and postretirement benefit income drove an approximate one cent impact to adjusted EPS in the quarter.

Turning to the segments, in meals and beverage, first quarter organic net sales decreased 3%, driven by an approximate 6% volume and mixed decline, partially offset by 2% net price realization.

Turning to the segments in meals and beverage first quarter organic net sales decreased 3% driven by an approximate 6% volume and mix decline, partially offset by 2% net price realization.

Lapping a 15% increase in organic net sales in the prior year, meals and beverage organic net sales grew approximately 6% on a two-year compounded annual growth.

Lapping a 15% increase in organic net sales in the prior year meals and beverage organic net sales grew approximately 6% on a two year compounded annual growth rate.

During the quarter, declines in U.S. retail products were partially offset by an increase in food service.

During the quarter of declines in U S. Retail products were partially offset by an increase in foodservice sales of U S. Soup decreased 5% following an 11% increase in the prior year, primarily due to declines in condensed and ready to serve soups, partially offset by an increase in broth.

Sales of US soup decreased 5% following an 11% increase in the prior year, primarily due to declines and condensed and ready to serve soups, partially offset by an increase in broth.

Segment operating earnings in the quarter for meals and beverages decreased 13% to $287 million, largely due to lower gross profits.

Operating earnings in the quarter for Nielsen beverages decreased 13% to $287 million largely due to lower gross profit.

As expected, first quarter operating margin declined 230 basis points to 20.4%. Driven by the lower gross profit margin, which was largely driven by higher cost inflation and other supply chain costs, as well as the unfavorable volume and mix between retail and food service, partially offset by supply chain productivity improvements and net price realization.

As expected first quarter operating margin declined 230 basis points to 24% driven by the lower gross profit margin, which was largely driven by higher cost inflation and other supply chain costs as well as the unfavorable volume and mix between retail and foodservice, partially offset by supply chain productivity.

<unk> and net price realization.

In snacks, first quarter organic net sales increased 1% and on a two year compound annual basis increased 8%.

In snacks first quarter organic net sales increased 1% and on a two year compound annual basis increased 8%.

The organic net sales increased reflects net price realization of 5%, an unfavorable volume in mix of 4%. Sales of our 8 power brands increased 5% in the quarter.

Organic net sales increase reflects net price realization of 5% and unfavorable volume and mix of 4% sales of our eight power brands increased 5% in the quarter segue.

Segment operating earnings in the quarter increased 5% to $161 million, primarily due to higher gross profit, partially offset by higher marketing and selling expense.

Segment operating earnings in the quarter increased 5% to $161 million, primarily due to higher gross profit, partially offset by higher marketing and selling expenses gross profit margin increased due to the impact of net price realization and supply chain productivity improvements more than offsetting higher cost inflation.

Gross profit margin increased due to the impact of net price realization and supply chain productivity improvements more than offsetting higher cost inflation and other supply chain costs. Overall, within our Snacks Division, first quarter operating margins increased year over year by 80 basis points to 14.5%.

And other supply chain cost overall within our snacks division first quarter operating margins increased year over year by 80 basis points to 14, 5%.

I'll now turn to cash flow on slide 30. We generated $174 million in operating cash flow in the first quarter and deployed that cash consistent with our capital allocation priorities to maximize long-term shareholder value.

I'll now turn to cash flow on slide 30, we generated $174 million in operating cash flow in the first quarter and deployed that cash consistent with our capital allocation priorities to maximize long term shareholder value.

We see some great opportunities to reinvest back into the business to drive incremental growth, productivity, and enhanced business capability.

We see some great opportunities to reinvest back into the business to drive incremental growth productivity and enhance business capabilities.

And as such, we stepped up our capital spend in fiscal 23, and this will now continue into fiscal 24 after a few years of lower spend levels through 2022. In Q1, capital expenditures were $143 million, $66 million higher than in the prior year, reflecting our commitment to invest for growth, particularly in capacity for our SNACs division.

And as I shall we stepped up our capital spend in fiscal 'twenty three and this will now continue into fiscal 'twenty four after a few years of lower spend levels through 2022 in.

In Q1 capital expenditures were $143 million $66 million higher than in the prior year, reflecting our commitment to invest for growth, particularly in capacity for our snacks Division. We also continued our commitment to return cash to our shareholders with $114 million of dividends paid.

We also continued our commitment to return cash to our shareholders with $114 million of dividends paid and $28 million of anti-telutive share repurchases in the quarter. Our balance sheet continues to be in a strong position with net debt of $4.6 billion and a net debt to adjusted EBITDA leverage ratio of 2.8 times below our target of three times.

And $28 million of the anti dilutive share repurchases in the quarter, our balance sheet continues to be in a strong position with net debt of $4.6 billion and a net debt to adjusted EBITDA leverage ratio of 2.8 times below our target of three times at the end of the first quarter. The company had approximately nine.

At the end of the first quarter, the company had approximately $91 million in cash and cash equivalents, and approximately $1.85 billion available under its revolving credit facility.

$1 million in cash and cash equivalents and approximately $1.85 billion available under its revolving credit facility and.

In addition, on October 10th, we entered into a $2 billion delayed single draw term loan credit agreement. The proceeds of the loan under this credit agreement can only be used in connection with the acquisition of Sovos brands. This $2 billion credit facility, along with our current revolving credit facility, will provide ample liquidity and flexibility as we plan for the pending Sovos brands acquisition.

In addition on October 10th we entered into a 2 billion dollar delayed single draw term loan credit agreement. The proceeds of the loans under this credit agreement can only be used in connection with the acquisition of Sublets brands. This $2 billion credit facility, along with our current revolving credit facility will provide ample liquidity and flexibility.

As we plan for the pending Southworth brands acquisition.

As you'll see on 531, we are reaffirming our full year fiscal 2024 guidance provided on August 31.

As Youll see on slide 31, we are reaffirming our full year fiscal 'twenty 'twenty four guidance provided on August 31 organic.

Organic net sales outlook for the full year remains in an expected range of 0 to 2 percent and reflects volume declines in the first half of fiscal 2024 with positive volume trends in the second.

Net sales outlook for the full year remains in an expected range of zero to 2% and reflects volume declines in the first half of fiscal 2024 with positive volume trends in the second half specifically for Q2, we expect net sales to again follow in market trends with likely modest sequential volume improvement from Q1.

Specifically for Q2, we expect net sales to again follow in market trends with likely modest sequential volume improvement from Q1. However, we still expect volume and mix to be negative compared to the prior year. Additionally, our net sales performance will reflect lower contribution from pricing as we move through the year and continue our disciplined levels of promotion.

However, we still expect volume and mix to be negative compared to the prior year. Additionally, our net sales performance will reflect lower contribution from pricing as we move through the year and continue our disciplined levels of promotion our full year guidance range for net sales is largely reflective of what we see as the potential variability.

Our full-year guidance range for net sales is largely reflective of what we see as the potential variability in the speed of volume recovery for the balance of the year.

And the speed of volume recovery for the balance of the year.

Full-year adjusted EPS guidance remains in the range of $3.9 to $3.15 with an expectation of modest earnings growth and margin progress in fiscal 2024, weighted to the second half, benefiting from a moderating inflationary environment and ongoing productivity improvement benefit.

Full year adjusted EPS guidance remains in the range of $3.09 to $3.15 with an expectation of modest earnings growth and margin progress in fiscal 'twenty 'twenty four weighted to the second half benefiting from a moderating inflationary environment and ongoing productivity improvement benefits.

As I mentioned earlier, the expense timing favorability we saw in our Q1 results will be refaiced into Q2.

As I mentioned earlier the expense timing favorability, we saw in our Q1 results will be re phased into Q2.

As a reminder, the sale of our Emerald Nuts business, which we divested in May of fiscal 23, is estimated to reduce net sales by approximately 0.5% and have a one cent per share dilutive impact in fiscal 20.

As a reminder, the sale of our Emerald nuts business, which we divested in may of fiscal 'twenty. Three is estimated to reduce net sales by approximately 0.5% and have a one cent per share dilutive impact in fiscal 'twenty four.

Additionally, the acquisition of Sobos brands is expected to close in calendar year 24, and therefore is not included in our current fiscal 24 out.

Additionally, the acquisition of Sublets brands is expected to close in calendar year 'twenty four and therefore is not included in our current fiscal 'twenty four outlook, we will continue to commit to investing in our brands with marketing and selling expense as a percent of net sales expected at the low end of the targeted 9% to 10% range with the second.

We will continue to commit to investing in our brands with marketing and selling expense as a percent of net sales expected at the low end of the targeted nine to 10% range, with the second quarter having higher sequential spend than Q1. We are increasing our capital expenditure guidance to approximately 5% of net sales as we make additional investments in the business and strategically increase capacity to fuel organic growth.

Or having higher sequential spend in Q1.

We are increasing our capital expenditure guidance to approximately 5% of net sales as we make additional investments in the business and strategically increased capacity to fuel organic growth.

With the timing shift of the Sovos Brands transaction, we are accelerating certain key growth and infrastructure projects from fiscal 25 into fiscal 24. All other guidance assumptions remain unchanged.

But the timing shift of the Southworth brands transaction, we are accelerating certain key growth in infrastructure projects from physical twenty-five into fiscal 'twenty for all other guidance assumptions remain unchanged.

Turning to slide 32. We thought it would be helpful to provide some additional insight behind the Adjusted Gross Margin and Adjusted Ebit Drivers we expect to come through fruition in the second half of fiscal 24.

Turning to slide 32, we thought it would be helpful to provide some additional insight behind the adjusted gross margin and adjusted EBIT drivers, we expect to come to fruition in the second half of fiscal 'twenty four is.

As shown on the slide and referenced in our guidance, our core inflation outlook for fiscal 24 is materially improved from the low double digit levels we averaged in the prior year.

As shown on the slide and referenced in our guidance our core inflation outlook for fiscal 'twenty four is materially improve from the low double digit levels that we averaged in the prior year.

With cost inflation expected to remain in the low single digit range for the balance of the year, we expect to see a greater net contribution from productivity and cost savings to our bottom line. Other factors that we expect will contribute to improving margin trends in the second half will be more favorable mix as volume stabilized, especially on profitable businesses like SOAP, normalizing Euro-Re-Year changes in marketing and selling cost, as well as lower pension and post-retirement income headwinds.

With cost inflation expected to remain in the low single digit range for the balance of the year, we expect to see a greater net contribution from productivity and cost savings to our bottom line. Other factors that we expect will contribute to improving margin trends in the second half will be more favorable mix as volume stabilize especially on profitable businesses like soup.

Normalizing year over year changes in marketing and selling cost as well as lower pension and postretirement income headwinds in closing first quarter results were largely as expected and our fundamentals are strong as we head into this important winter season.

In closing, first quarter results were largely as expected, and our fundamentals are strong as we head into this important winter season.

Our SNACS business continues to progress its margin journey while we continue to invest in the equity of our brands. Our meals and beverage business continues to attract consumers taking stretchable meals, which is especially important for winning the holiday season given the current consumer environment.

Our snacks business continues to progress its margin journey, while we continue to invest in the equity of our brands our meals and beverage business continues to attract consumers seeking stretcher will meals, which is especially important for winning the holiday season, given the current consumer environment with.

With a clearly defined strategy and a best in class supply chain, Campbell's is well positioned to deliver the rest of its fiscal year.

And with a clearly defined strategy and a best in class supply chain Campbell's is well positioned to deliver the rest of its fiscal year.

From the management team at Campbell's, we want to thank all of our teams for their hard work and wish everyone a wonderful holiday season. And with that, let me turn it over to the operator for Q&A.

From the management team of Campbell's we want to thank all of our teams for their hard work and wish everyone. A wonderful holiday season, and with that let me turn it over to the operator for Q&A.

At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.

At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Your first question comes from a line of Andrew Zarr from Barclays. Your line is open.

Your first question comes from the line of Andrew Lazar from Barclays. Your line is open.

Great. Thanks, so much good morning, everybody.

Andrew. Mark, you mentioned an encouraging start to the holiday season. And of course, you know, we don't want to make too much of any given four week period. But for Campbell, obviously, the recent data is pretty critical. I guess it was hoping you could dig in a bit more on this data, particularly, you know, how you see sort of category dollars progressing to help inform, you know, how fiscal 2Q is unfolding. And more important, how you see the rest of the year, given the expectation that that 24 is going to be a somewhat back-end loaded year.

Hey, Andrew.

Mark you mentioned, an encouraging start to the holiday season and of course, we don't want to make too much of any given four week period, but for Campbell. Obviously, the recent data is pretty critical I guess I was hoping you could dig in a bit more on this data, particularly how you see sort of category dollars progressing to help inform how fiscal <unk> is unfolding and more important.

How you see the rest of the year given the expectation that 'twenty four is going to be somewhat back end loaded year.

Yeah, so yeah, great question Andrew. And yeah, I think it's always...

Yeah. So yeah, great question, Andrew and Yeah, I think it's always.

You know, important to see trends over longer periods of time, but of course for us, Thanksgiving.

You know important to see trends over longer periods of time, but of course for us Thanksgiving I think from a barometer.

I think from a barometer as far as the consumer, kind of macro consumer trends, but also for the business is quite important.

As far as the consumer kind of macro consumer trends, but also for the business is quite important and I guess the headline I'd give you is that the holidays as we had hoped or especially Thanksgiving was very resilient I think consumers for the most part as we had anticipated.

And I guess the headline I'd give you is that the holidays as we had hoped or especially Thanksgiving was very resilient. I think consumers for the most part is as we had anticipated were very present and especially in those categories that are most relevant to Thanksgiving. And as you may be aware, we're outside of the protein. We're in the three biggest.

We're very present and especially in those categories that are most relevant to.

To Thanksgiving and as you may be aware were outside of the protein where in the three biggest with pretty strong positions in all three which has broth condensed soup and stuffing those year your top three household penetration categories beyond.

with pretty strong positions in all three, which is broth, condensed soup, and stuffing. Those are your top three household penetration categories beyond protein for the holiday.

Protein for the holiday and I would say in all three of those segments.

And I would say in all three of those segments, we solve improvements and significant step up and share. So on condensed, we grew dollar share by 1.1 in broth, 1.2 and stuffing 0.2. I will say one of the dynamics that we are also seeing.

We saw improvement and significant step up in share. So on condensed we grew dollar share by 1.1 in broth 1.2, and stuffing point too.

I will say one of the dynamics that we are also seeing is that the shopping dynamic has evolved a little bit as you might expect in a tough economic backdrop, and what I mean by that is.

is that the shopping dynamic is evolved a little bit as you might expect in a tough economic backdrop. And what I mean by that is one of the dynamics we saw was much less.

One of the dynamics, we saw was much later purchases. So the key week of Thanksgiving was much bigger than the prior week and historically speaking those tend to be a bit more balanced and as part of that we did see a lot of consumers very actively seeking promotion and so I will say that on the dollar side of the categories in some cases although.

key week of Thanksgiving was much bigger than the prior week. And historically speaking, those tend to be a bit more balanced. And as part of that, we did see a lot of consumers very actively seeking promotion.

And so I will say that on the dollar side of the categories, in some cases, although overall improvement and total Thanksgiving categories,

Overall.

Proved meant in total Thanksgiving categories.

if you cum them together we're positive. You still see some headwinds on dollars. What I will tell you though, is it's not a function of what I would call disproportionate or inconsistent with precedent, promotion or spending. I know always when you see a little bit of separation between units and dollars, there's always that question. What I would tell you is that we did a very good job.

Cumulative together were positive you still see some headwinds on dollars what I will tell you, though is it's not a function of what I would call. This.

Proportionate or.

Consistent with precedent promotion or spending and so I know always when you see a little bit of separation between units and.

There's always that question what I would tell you is that we did a very good job of executing within the holiday one of the things I've mentioned on the in the fourth quarter.

of executing within the holiday. One of the things I mentioned in the fourth quarter.

was that a year ago at Thanksgiving, a lot of customers had chosen to go with private label as their lead item. We saw that reverse in a material way this year. And so Campbell's products were back in the lead position, which was very important for us relative to ensuring that we get off to a good start in the season. So although I wouldn't say a comprehensive...

Is that a year ago at Thanksgiving a lot of customers had chosen to go with private label as their lead item, we saw that reverse in a material way this year and so Campbell's products were back in the lead position, which was very important for us relative to ensuring that we get off to a good start in the <unk>.

The season, so although I wouldn't say a comprehensive win across every measure I think the things that we could control and the things we really needed to see we were able to see and I think bodes well as we go into the.

Win across every measure, I think the things that we could control and the things we really needed to see, we were able to see, and I think both as well as we go into the December holiday and Christmas period as we roll through the winter. You'll still see some headwinds on some of the non-Thanksgiving related products that dampen a little bit the overall category, but nothing that's inconsistent with what we've seen or quite frankly what we expect.

The December holiday and Christmas period, as we as we roll through the winter.

You'll still see some headwinds on some of the non Thanksgiving related products that dampen a little bit the overall category, but nothing that's inconsistent.

With what we've seen or quite frankly, what we expected.

Thanks for that. And then just a quick follow up. And it's related to this. Obviously, Gross Margin came in well above Street Forecast. And I think that helps suggest that there are backs up your point around promotional tactics from Campbell, maybe you're playing out sort of as you'd expected in a somewhat more rational way. I guess what maybe you can discuss what you're seeing there and more importantly, what you're seeing in terms of lifts. You know, are the lifts around some of the promotional activities sort of consistent with what you've seen historically?

No. Thanks for that and then just a quick follow up and it's related to this obviously gross margins came in well above street forecast and I think that helps suggests that there are backs up your point around promotional tactics from from Campbell, maybe are playing out sort of as you would expect it in a somewhat more rational way.

I guess, maybe you can discuss what youre seeing there and more importantly, what youre seeing in terms of lifts you know are the lifts around some of the promotional activity is sort of consistent with what you've seen historically.

I'd say better. And I think part of this now again, is I suggested I do think we are getting a bit of a tailwind and you can see it, right? What you'll notice is a fairly substantial step down in private label in certain of these categories, as you'll see that flip occur between us getting kind of key week. And for those that may not understand exactly what I mean.

I'd say better.

And I think part of this now again as I as I suggested I do think we are getting a bit of a tailwind and you can see it right. What you'll notice is a fairly substantial step down in private label in certain of these categories. As you as youll see that flip occur between us getting kind of key week and for those that may not.

I understand exactly what I mean.

Now retailers have a decision to make on who's in their ad, who's on the end cap for the key week. These are the things that are really important to enhance the return on investment for our promotion and the lifts that you're describing. And this year, opposed to last year, where I think private label might have been, a little bit more new and I think retailers felt like, well, let's just get to a low price and maybe that's what's most important.

The retailers have a decision to make on who's in there add who's on the end cap.

For the key week. These are the things that are really important to enhance the return on investment for our promotion and the lifts that youre, describing and this year opposed to last year, where I think private label might've been a little bit more new and I think retailers felt like well, let's just get to a low price and maybe that's what's most important.

I think what we continue to believe and what we saw again in this holiday is that when the chips are really down, the Campbell's brands matter and that is evident in the performance that we saw. I do think you point out a very good proof point and that is how our margin

I think what we continue to believe in what we saw again this holiday is that.

When the chips are really down that.

Campbell's brands matter and that is evident in the performance that we saw.

I do think you point out a very good proof point and that is how our margins are progressing and I think the reality is is in the first quarter you did not see any type of material change in investment relative to promotion or trade our margins came in.

progressing and I think the reality is in the first quarter you did not see any type of material change and investment relative to promotion or trade our margins came in.

very much consistent with where we expected we continue uh to do a very very good job on our productivity and some of our other levers uh in managing costs i think as we go forward you will see us being very judicious

Very much consistent with where we expected we continue to do a very very good job on our productivity and some of our other levers.

Managing costs I think as we go forward you will see us being very judicious right. This continued balancing act that we've been talking about for a while of making sure that were affordable and that the price gaps are managed right. When we most need them to be along with ensuring that the margin.

continued balancing act that we've been talking about for a while of making sure that we're affordable and the price gaps are managed right.

when we most need them to be along with ensuring that the margin and the volumes all kind of work together to give us this kind of optimal position. Not easy to do and in a dynamic environment, we've got to make sure that we're staying.

And the the volumes all kind of worked together to give us this kind of optimal position of not easy to do and in a dynamic environment. We've got to make sure that we're staying agile, but I would say so far.

Agile, but I would say so far. I see nothing on the horizon that suggests to me that there's any variation from what we would have planned or expected. Even though in certain periods of the year you may see a sharpener price point or make sure that we're strongest in a key week.

I see nothing on the horizon that suggests to me that theres any variation from what we would've planned or expected, even though in certain periods of the.

The year, you may see us sharpen our price point or.

Make sure that were strongest in Q week, but not outside of the precedents that we've said in the past or within the margin construct that we've laid out.

but not outside of the precedence that we've said in the past or within the margin construct that we've laid out.

Your next question comes from a line of Ken Goldman from JP Morgan. Your line is open.

Your next question comes from the line of Ken Goldman from Jpmorgan. Your line is open.

Hi, thanks so much. Carrie, you mentioned the opportunity to manage discretionary spending, maybe a bit more as the year unfolds. I'm just curious, is it possible to provide, I guess some examples of where the biggest opportunities might be within discretionary spending? And I suppose I'm also asking for a bit of help with how you define discretionary as well. Thank you. Thank you.

Hi, Thanks, so much.

Terry you mentioned the opportunity to manage discretionary spending can be a bit more as the year unfolds.

Just curious is it possible bull possible to provide some examples of where the biggest opportunities might be within discretionary spending.

I suppose I'm also asking for a bit of help with how you define discretionary.

As well thank you.

I would say a lot of that goes back to some of our enterprise-wide cost savings initiatives. So we have a vast program that we look at opportunity.

Yes, I would say a lot of that goes back to some of our enterprise wide cost savings initiative. So we have a vast a program that we look at opportunity.

Capabilities.

arrive efficiencies in all parts of our organization that are part of our billion dollar cost-saving.

By efficiencies in all parts of our organization that are part of a 1 billion dollar cost savings initiatives. So I would say, it's really across the board not only in.

So I would say it's really across the board, not only in our COGS areas and our manufacturing facilities, but also going into the S-GNA areas as well. And that's where we're seeing it across the board. Some of those cost savings opportunities coming through. Yeah, a lot of that can, I would say, it would be in two big buckets. One.

Our caused areas in our manufacturing facilities, but also going into the SG&A areas as well.

And that's where we're seeing it across the board some of those cost savings opportunities coming through.

A lot of that Ken I would say it would be in two big buckets one.

is what we would call the non-working bucket. So that's, you know, kind of think of it as production or materials or things that are not necessarily driving immediate impact in the marketplace. And then secondarily, what I would call the non-people cost within our S-GNA, where...

It is what we would call the non working bucket.

So that's you know kind of think of it as production or materials or things that are not necessarily driving immediate impact in the marketplace and then secondarily, what I would call the non people.

Cost within our SG&A, where.

You know, we're looking, you know, at everything. I mean, I think in a world where, you know, we wanna make sure that every dollar is working as hard as it possibly can in this moment, especially as I said before, as we kind of wrestle with this, you know, balancing act, we wanna make sure that we've got every penny possible available to either invest in the right areas and or help us deliver the earnings. So I think those two buckets are where we have been

We're looking.

And everything I mean, I think in a world, where we want to make sure that every dollar is working as hard as we possibly can in this moment, especially.

As I said before as we kind of wrestle with this balancing act we want to make sure that that we've got every penny possible available to either invest in the right areas <unk> help.

Help us deliver the earnings so I think those two buckets are where we have been.

You know, although always vigilant, I would say in a whole different degree of rationalization as we really make sure that we're working as hard as we can to get those dollars to work hard. Okay, thanks.

Although always vigilant I would say at a whole different degree of <unk>.

<unk> as we really make sure that.

That we're working as hard as we can to get those dollars to work hard.

Okay. Thank you for that and then just a quick follow up.

It's great to see the improving share data within soup and thank you for the explanation as to what

It's great to see the improving share data within soup and thank you for the explanation as to what's going on maybe behind the scenes there I'm.

going on maybe behind the scenes there. I'm curious, do you believe your key customers are satisfied with overall category volumes with soup? Right, sort of understanding that the comparison is challenging. You did talk about how maybe you expect shipments and consumption to kind of match in the next few months, and maybe that answers the question, but just trying to get any kind of sense of, how those customers are looking at the category right now in the scheme of affordability and so forth.

Curious do you believe your key customers are satisfied with overall category volumes with soup right sort of understanding that the comparison is challenging.

You did talk about how you may be you expect shipments and consumption to kind of match in the next few months and maybe that answers. The question, but just trying to get any kind of sense of how those customers are looking at the category right now in the scheme of affordability.

So forth.

Yeah. It's a great question. And I do think...

Yeah.

It's a great question and I do think.

It's a conversation that we have frequently.

It's a conversation that we have frequently.

with our customers. And you know, you've heard me talk about this before, and I'm always a little guarded because it should come with the big caveat that we're not gonna do anything to undermine the long-term profitability of these businesses and margins. But I will say it is important for us to ensure that the volume

With our customers and you know you've heard me talk about this before and I'm always a little guarded.

Because it should come with the big caveat that we're not going to do anything to undermine the long term profitability of these businesses and margins, but I will say it is important for us to ensure that the volume.

on these businesses continues to be and an appropriate range relative to ensuring that the health of the category and.

These businesses continues to be an inappropriate.

You know range relative to ensuring that the health of the category and really the health of our overall network continues to sustain and so I think one of the other things you will see can.

Really the health of our overall network continues.

And so I think one of the other things you will see can in the holiday period not surprising with the little bit of the disparity I shared between the unit share and the dollar share Being a greater Expansion in units you will see a better step up in units From where we've been on soup and I think again, it's coming with the right investment package behind it But look I think that's encouraging and I think

In the holiday period, not surprising with a little bit of the disparity I shared between the unit share and the dollar share.

Being a greater expansion in units you will see a better step up in units from where we've been on soup and I think again, it's coming with the right investment package behind it but look I think that's encouraging and I think.

you know, over a period of time where we are looking for this business.

Over a period of time, where we are looking for this business.

You know, not just for the next month or the next event, but really for the balance of the year and going forward, I think it continues to support what we believe is true, which is that this category continues to be strong. And look, just as a context.

You know not just for the next month or the next event, but really for the balance of the year and going forward.

It continues to support.

What we believe is true which is that this category continues to be strong and look just as a context right I know, we forget this sometimes and Theres a lot of reasons why we can go back and these last several years and point to.

Right, I know we forget this sometimes and there's a lot of reasons why we can go back in these last several years and point to Maybe non-normal One-time elements that affected it But if I would have told you that the four-year keg or on the soup category was gonna be around three three to four percent

Maybe not a normal one.

Onetime elements that affected it but if I would have told you that the four year CAGR on the soup category was going to be around three 3% to 4%.

We would have all felt really good about that, given that it's the greatest growth period.

We would've all felt really good about that given that it's the greatest growth period, the categories had and so even though we're experiencing.

categories had and so even though we're experiencing some slowdown in this year, I continue to believe that the underpinnings of this category, especially in the areas that we've identified as the most important growth areas continue to have a good, solid runway ahead. And I think Thanksgiving just becomes

Some slowdown in this year I continue to believe that the underpinnings of this category, especially in the areas that we've identified as the most important growth areas continue to have a good solid runway ahead, and I think Thanksgiving just becomes.

maybe a little bit, as I said, not the complete victory, but another proof point in that story.

Maybe a little bit as I said, not the complete victory but.

Another proof point in that story.

Your next question comes from a line of Robert Moscow from TD Cowan. Your line is open.

Your next question comes from the line of Robert Moskow from TD Cowen Your line is open.

Hi, thanks. Mark, last quarter you did some work to segment out grow versus optimize super

Hi, Thanks.

Mark.

Last quarter you.

I did some work to segment out grow versus optimize soup brands and I wanted to know if if.

And I want to know if the Grow Brands performs.

If the Gro brands performed.

any better than optimized in the quarter or where there are comparisons that play to kind of change it around. And also maybe a little bit into the tactics you used for grow compared to optimized. How are they different?

Any better then optimize in the quarter.

Or where their comparisons at play to kind of change it around and also maybe a little bit into the tactics you used for grow.

Compared to optimize how are they different.

Yeah, so an interesting quarter on that front because you had, I would say some real strength and some challenges in both of the two buckets.

Yes, so an interesting quarter on that front, because you had I would say some real strength in some and some challenges in both of the two buckets.

So they were fairly consistent in the quarter. A little bit better, I would say on share as broth recovered in the optimize, which was a good thing given its significance at the holiday. But the tactics I think for both, and again, if I look at this over the last couple of years, as I said in the fourth.

So they they were fairly consistent in the quarter a little bit better.

I would say on share as broth recovered in the optimized which was a good thing given its significance at the holiday.

But the tactics I think for both and again if I look at this over the last couple of years.

As I said in the fourth quarter, you do have a pretty dramatic difference where the growth businesses over the last couple of years CAGR is about 3%.

You do have a pretty dramatic difference where the growth businesses over the last couple years, Kager's about 3% of upside and growth.

Upside in growing and the optimized businesses are down about the same amount and even a little bit a little bit more more importantly in the growth areas over the last two years.

And the optimized businesses are down about the same amount and even a little bit more, more importantly in the growth areas over the last two years.

You're seeing relatively strong shares across most of the key areas like chunky and the icons on condensed.

Being relatively strong shares across most of the key areas like chunky and the icons on condensed and Pacific I think in this particular quarter what helped the optimize was some of the work and some of the benefit that we saw.

I think in this particular quarter, what helped the optimize was some of the work and some of the benefit that we saw on broth kind of regaining its footing relative to private label. And I would say that was more of a function of just cycling private label than anything dramatic we did. I will say as we went into the key weeks, and if you remember what I said on-

On on broth kind of regaining its footing relative to private label and I would say that was more of a function of just cycling.

That label than anything dramatic we did I will say as we went into the key weeks and if you remember what I said on broth, even as an optimized what's important is that we win those key holiday weeks and I think the good news is for a reasonable investment relative to what we expected.

Even as an optimize, what's important is that we win those key holiday weeks, and I think the good news is, for a reasonable investment relative to what we expected, we saw that where a broth for the quarter or for the four weeks was up for.

We saw that were brought for the.

For the quarter or for the four weeks was up 4% on dollars and up 1.2 share points in the latest four weeks, which is a great sign while private label was down pretty significantly I think on the growth Rob what were seeing that as a headwind right that I'd say condensed cooking icons Pacific all of those are doing.

on dollars and up 1.2 share points in the latest four weeks, which is a great sign while private label was down pretty significant.

I think on the growth, Rob, what we're seeing that's a headwind, right? But I'd say condensed cooking icons.

Pacific, all of those are doing extremely well. I will say the pressure on ready to serve has been a bit more pronounced in the last quarter and this is really, we believe a dynamic of consumers, especially our lower income consumers that are under a lot of pressure that are migrating a bit more to what we would call stretchable meals from single serve. And so one of the things

Extremely well.

We'll say the pressure on ready to serve has been.

More pronounced in the last quarter and this is really a we believe a dynamic of consumers, especially our lower income consumers that are under a lot of pressure that are migrating a bit more to what we would call stretch of bulb meals from single serve and so one of the things.

that you'll see us doing on chunky in particular is really positioning it more through the lens of the protein content and its ability to also stretch and meals to match a little bit where those consumers are going. But I do think in the quarter, what dampened a little bit of the growth trajectory was that ready to serve. I'm not particularly concerned, I think we'll continue to see as we get into the season.

Youll see us doing on chunky in particular is really positioning it more through the lens of the protein content in its ability to also stretching meals to match a little bit where those consumers are going but I do think in the quarter.

What dampened a little bit of the growth trajectory was that ready to serve I'm not.

Particularly concerned I think we'll continue to see as we get into the season.

A lot of activity on that business and all the other areas of growth are doing extremely well.

A lot of activity on that business and all the other areas of growth are doing extremely well.

Great. Thank you.

Your next question comes from the line of Jason English from Goldman Sachs. Your line is open.

Your next question comes from the line of J-Singlish from Goldman Sachs. Your line is open.

Hey, morning folks, things just thought me in. Thank you. Hey there.

Hey, good morning folks thanks for slipping me in.

Hey, there.

So in terms of inflation as an enabler to gain the margin recovery of the back half, it sounds like you're looking for a cork money inflation to remain roughly stable where you were the first quarter that low single digit rate. But when you show us the margin bridge, there's a big gap there. Like the 2% cornflation rate would suggest far less gross margin compression than the 460 basis points you show with the inflation in another bucket. So what's going on with the other? And what should we expect going forward?

So in terms of inflation as an enabler to gain the margin recovery in the back half it sounds like you're looking for core commodity inflation to remain roughly stable with where you were the first quarter that low single digit rate, but when you show us the margin bridge, there's a big gap there like the 2% core inflation rate would suggest far less gross margin compression in the 460 basis point.

You show, where the inflation and other bucket so what's going on with the other and what should we expect going forward.

Yeah, so the other supply chain cost is a variety of very...

Yeah. So the the other supply chain cost as a as a variety of variables, maybe carry and I can tag team on this one a little bit together, but I'd say, there's three things in there.

Maybe carrying a contact team on this one a little bit together, but I'd say there's three things in there.

that are influencing that margin pressure that we're seeing now.

That are influencing that margin pressure that we're seeing now.

The first is I would describe some inflation, albeit not core inflation, cost of the supply chain, some of the intrinsic costs within our Planck cost, have been ahead when that it moved kind of in.

The first is I would describe some inflation, albeit not core inflation cost of the supply chain. Some of the intrinsic cost within our plant costs have been a headwind that have moved kind of in concert I would say with inflation and so although we don't categorize it as core inflation I would say generally.

I would say with inflation and so although we don't categorize it as core inflation, I would say generally Um, that's what's behind it. I think the second is it's also there is a mixed dynamic that is within that Cost structure that's related more to skew mix and even as we see some of the brand and category mix

That's what's behind it I think the second is it's also there is a mix dynamic that is within that cost structure. This related more to SKU mix and even as we see some of the brand and category mix, even through the SKU, we've seen a bit of a headwind there and then the third area is.

even through to SKU, we've seen a bit of a headwind there. And then the third area is, and again, not completely unexpected. That's also where you see absorption and some of the fixed cost leverage that you would experience in a circumstance where volumes might be a little bit down from where they've been, and that's pressure that's there. So as you can expect that normalization,

And again not completely unexpected that's also where you see absorption and some of the fixed cost leverage that you would experience in.

A circumstance where volumes might be a little bit down from where they've been.

And Thats pressure that's there so as you can expect that normalization, whether it be from the mix standpoint.

whether it be from the mixed standpoint, inflation standpoint and or even the volume standpoint, that's why.

Inflation standpoint <unk>.

Even the volume standpoint, that's why we do not see those.

you do not see those continuing forward. And you will begin to cycle if you were to go back and look at our Q3 and our Q4 from 23, you would see rather significant contributions from those buckets as well. Yeah, I would just add that.

Our continuing forward and you will begin to cycle. If you were to go back and look at our Q3 and our Q4 from 23, you would see rather significant contributions from those buckets as well.

Just add that.

Think about some of those elements that Mark just talked about, is cost-a-manufacturing versus cost-a-sales? There is a timing element that ultimately moves from your balance sheet to your PNL, and we're cycling some of those things that Mark talked about on absorption.

Think about some of those elements that mark just talked about.

Cost of manufacturing versus cost of sales there is a timing element that ultimately moves from your balance sheet to your P&L and.

We're cycling some of those things as Mark talked about on an absorption as he mentioned.

That's helpful, thank you. And Mark, Carrie, another sort of higher level question on the outlook for snack foods. The notion that snack foods or growth advantage has come under some pressure recently, supported by the data. If you look at consumption data, there's been pretty sharp deceleration of volume trends across numerous snack food categories. Love to hear you a pine on what you believe is driving that deceleration, whether or not you think we are sort of pivoting into a period where the growth advantages of snack foods are behind us. And if so or if not, why, what drives that expectation?

That's helpful. Thank you and.

Marc Carrie.

Another sort of higher level question on the outlook for snack foods.

The notion that snack foods a growth advantage has come under some pressure recently.

Reported by the data if you look at consumption pattern has been pretty sharp deceleration of volume trends across numerous snack food categories Love to hear you opine on what you believe is driving the deceleration.

Whether or not you think we are sort of pivoting into a period, where the growth's advantages snack foods are behind us.

If so or if not what why what drives that expectation.

Yeah, it's a good question, Jason. I think what you're starting to see is a little bit more bifurcation within snacking. So I do think...

Yes, it's a good question, Jason I think what you're starting to see is a little bit more bifurcation within snacking. So I do think there are places, where we are seeing greater pressure, especially where.

There are places where we are seeing greater pressure, especially where I would say segments are a bit more commoditized. What's interesting in the first quarter, if you look at our results.

You know I would say segments are a bit more commoditized, what's interesting in the first quarter. If you look at our results you saw power brands right, which are are are now about two thirds of our business continuing I would say, albeit at a slightly lower rate of growth.

You saw power brands, right, which are now about two thirds of our business continuing. I would say, I'll be at a slightly lower rate of growth than we may have had in the past, but still certainly a healthy delta versus what I would say the average for total food was doing fairly well and continuing to perform well. And even the underlying ball mix trends.

Then we may have had in the past, but still certainly a healthy delta versus what I would say the average for total food was.

Doing fairly well and continuing to perform well and even the underlying vol mix trends on that business for the quarter. They were essentially flat for the I think down just under 1% for the power brands, but what you are seeing is some of the.

on that business for the quarter, they were essentially flat for the, I think down just under 1% for the power brands.

But what you are seeing is some of the, a pretty healthy step down on a couple areas, both the partner and the contract brand.

A pretty healthy step down on a couple areas both the partner and the contract brands, that's a little bit of more of our catalyst of managed continuing to optimize.

That's a little bit more of our catalyst of manage continuing to optimize DST and I talked about that for the first time in more of a complete way and I know you know a couple questions there that I'll answer in Q2 and give everybody kind of a full picture of you know margin timing and a few other things that I know we uh we owe to folks but I think what I would say is we continue to work

<unk> and I talked about that for the first time.

And more of a complete way and I know a couple of questions. There that I'll answer in Q2, and give everybody kind of a full picture of margin timing and a few other things that I know we are.

We owe to folks, but I think what I would say is we continue to work.

actively, although an important part of our business to manage that effectively. And then some of our non-core snack businesses were weaker in the quarter. And they tended to be segments where you had a little bit more pressure from private label or competition in general. I would just point the bread.

Actively although an important part of our business to manage that.

Effectively and then some of our noncore snack businesses were weaker in the quarter and they tended to be segments, where you had a little bit more pressure from private label or or competition in general I would point to bread.

was a little bit weaker in the quarter and things like microwave popcorn and some other areas that all be it not power brand certainly are not insignificant and had a little bit ahead when. So I think there's going to be a period here, Jason, where although I would suggest that overall, you may see a little bit of pressure on some of those categories, but we have to remember too, I mean these snacks business.

It was a little bit weaker in the quarter and things like microwave popcorn and some other areas.

That albeit not power brands certainly are.

Not insignificant and it had a little bit of headwinds I think theres going to be a period here, Jason where although I.

I would suggest that overall, you may see a little bit of pressure on some of those categories, but.

We have to remember too I mean, these snacks businesses.

you know, last year at this time, you know, most of these power brands were growing at 20%. And so even when I...

Last year at this time most of these power brands were growing at 20% and so even when I.

put the in market 3% growth up against that business and combine it over a two year horizon. You're still talking about strong double digit growth over the last couple years. So it's always a little hard to get the calibration of what's a trend that's going to sustain and the normalization a little bit of the business. So I still feel very bullish.

Put the in market, 3% growth up.

Just that business and combine it.

Over a over a two year horizon.

Still talking about strong double digit growth over the last couple of years and so it's always a little hard to get the calibration of what is a trend that's going to sustain and what's kind of a normalization a little bit of the of the business. So I still feel very bullish about it I think we're going to again, let unlike we're doing in other categories.

about it. I think we're going to, you know, again, Latin, unlike we're doing in other categories, have to stay very vigilant on what consumers are looking for and making sure that we're positioned well. But I would say so far, so good relative to how we're seeing that playoff.

Have to stay very vigilant on what consumers are looking for and making sure that we're positioned well, but I would say so far so good relative to how we're seeing that play out.

your next question comes from a line of Jim Solaria from Stevens. Your line is open.

Your next question comes from the line of Jim The Celerity from Stephens. Your line is open.

Hi guys, good morning. Thanks for taking our question. Mark, I wanted to drill down a little bit on the snacking, particularly, you know, Lance and late July posted, I thought very impressive, you know, share gains, just offer some color on what's driving the strengths of those two brands in particular compared to kind of the, you know, broader power brands portfolio.

Hi, guys. Good morning, Thanks for taking our question.

Mark I wanted to drill down a little bit on the snacking, particularly Lance in late July posted I thought very impressive share gains just offer some color on what's driving the strength of those two brands in particular compared to kind of the broader power brands portfolio.

Yeah, there's a lot. Those are quite, those are two quite interesting brands because they do both highlight.

Yes, it's there's a lot of.

Those are quite those are two quite interesting brands because they do both highlight.

I think consumer dynamics that may feel a little bit attention with one another, but are fueling the categories. We actually see this.

Think consumer dynamics that may feel a little bit of tension with one another.

<unk> are fueling the categories, we actually see this on meals and beverage and on stack. So let me take late late July 1st I would say late July is a more premium added value brands and we are seeing our premium brand is doing extremely well and part of the factor that underpins. This is.

on meals and beverage and on snacks. So let me take late July first. I would say late July .

is a more premium added value brand. And we are seeing our premium brands doing extremely well. And part of the factor that underpins this is a lot of the decline that we're experiencing, actually a significant outsize of contribution is coming from low income households, which index on snacking.

A lot of the decline that we're experiencing.

Actually a significant outsize contribution is coming from low income households, which index on snacking.

Only at about 20% but they represent a much bigger portion

Only at about 20%, but they represent a much bigger portion of our declines whereas the <unk>.

of our declines, whereas the premium brands that index higher to the mid and higher income levels have been very stable if not growing at faster rates. And so I think, you know, late July is a well-positioned brand in that added value and elevated space.

Premium brands that index higher to the mid and higher income levels have been very stable if not growing at faster rates and so I think late July is a well positioned brands and that added value and elevated space and thus within those consumer segments remains extremely relevant and the growth rate.

and thus within those consumer segments remains extremely relevant and the growth rates continue to perform very well.

<unk> continue to perform very well.

Lance is interesting because Lance is really a brand that in our snacking portfolio does really index height of

<unk> is interesting because lance is really a brand that in our snacking portfolio does really index high to value and one of the things that we're seeing is demand for that sandwich Cracker segment.

And one of the things that we're seeing is demand for that sandwich cracker segment and in particular, Lance has been extremely high. And when you think about the price point, the value, even the content, right, protein delivery, the perception of value of food relative to spend, it is a very, very high performing brand and one that is doing very well. So you can imagine among the more challenged consumer base, that particular business

And in particular Lance has been extremely high and when you think about the price point the value even the content right protein delivery the.

The perception of value of food relative to spend it is a very very high performing brand and one that is doing very well. So you can imagine among the more challenged consumer base.

Particular businesses, just right on target and.

right on target and we've seen demand doing going up pretty dramatically across that whole portfolio. So it is a really good example of two very different macro trends that we're experiencing within the businesses both snacking in meals and beverage.

And we've seen demand doing going up pretty dramatically.

Cross Apple portfolio. So it is a really good example of two very different.

Macro trends that we're experiencing within the businesses, both stacking in meals and beverages.

Great, that's helpful. And then maybe to wrap up on some of the innovation you guys have, if we think about...

Great. That's helpful and then maybe to wrap up on some of the innovation you guys out.

If we think about especially in goldfish.

Are these innovations meant to bring new households to the brand, obviously, Goldfish is very well known brand? It meant to kind of expand the buy rate with core Goldfish consumers, or are you still kind of in search of adding incremental households that maybe don't buy the core product but would be enticed by an innovation?

Are these innovations meant to bring new households to the brand, obviously goldfish very well known brand is it meant to kind of expand the buy rate with core goldfish consumers or are you still kind of in search of adding incremental households that maybe don't buy the core product, but would be enticed by an innovation.

Yeah, I would say consistent with what our ongoing strategy has been, which is broadening usage of goldfish to the entire house.

Yeah, I would say consistent with what our ongoing strategy has been which is broadening usage of goldfish to the entire household.

You know, we have always been a powerhouse with kids. And, you know, not surprising, I think, to many of ourselves, whose our own behavior may indicate that once it's in the household, more of the family tends to eat it. But we've not necessarily brought offerings that index a little bit more or specifically meet more of the expectations of either teens or...

We have always been a <unk>.

Our house with kids and <unk>.

Not surprising I think to many of ourselves as our own behavior may indicates that once it's in the household.

More of the family tends to eat it, but but we've not necessarily brought.

Offerings that index, a little bit more or specifically meet more of the.

Expectations of either teens or.

even adults in the household. And that strategy over the last couple years, whether it was Frank's Red Hot or Old Bay or Megabyte.

Even adults in the household and that strategy over the last couple of years, whether it was Frank's red hot or old Bay or megabytes.

The innovation has been paramount into driving that. And you know, one of the things that we mentioned in the call today.

The innovation has been paramount into driving that and you know one of the things that we mentioned in the call today.

You know, this is now going on two years of being the number one requested snack.

This is now going on two years of being the number one requested snack among teens and that's everything right. That's the brands you think of as being kind of these mega teen snacks and goldfish has been number one and so when you think about a product like crisps, where you really are intermingling kind of potato.

among teens and that's everything right that's the brands you think of as being kind of these mega teen snacks and goldfish Has been number one and so when you think about a product like Chris

where you really are intermingling kind of potato chip behavior with cracker behavior to get this kind of light, munchable texture on goldfish. It's a perfect fit for that. But, you know, we also want to make sure that kids target. We continue to, you know, meet their expectations as well. So you love to see, you know, a maple flavored elf product on Graham as well. So I think the goal for us is to continue to be that number one.

Chip behavior with cracker behavior to get this kind of light multiple texture on goldfish, it's a perfect fit for that but we also want to make sure that kids target we continue to.

Meet their expectations as well so you'd love to see you know in.

Maple flavored elf product on Graham.

As well so I think the goal for US is to continue to be that number one choice for kids, while enabling the entire household to be fans of it. So I would say I would expect that to be to manifest itself in both by rate.

for kids while enabling the entire household to be fans of it. So I would say I would expect that to be to manifest itself in both by race.

as you hope that a kid's household is buying a couple more packages of some of these other innovations or flankers or that we hold on to households longer. So as the kids age up, you're actually maintaining goldfish in that repertoire, even if it may be through a crisper or a megabyte as an extension into a longer and older set of kids or households.

As you hoped that a kid's household is buying a couple more packages of some of these other innovations are flankers or that we hold on to households longer so as the kids age up you're actually maintaining goldfish and that repertoire, even if it may be through a CRISPR a megabyte.

As a as an extension into a longer an older set.

Set of kids are households.

Ladies and gentlemen, we have reached the end of our question and answer session. This does conclude today's conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, we have reached the end of our question and answer session. This does conclude today's conference call. Thank you for your participation you may now disconnect.

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