Q2 2024 The Hain Celestial Group Inc Earnings Call

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Operator: Greetings! Welcome to the Hain Celestial Second Quarter 2024 Earnings Conference. At this time, all participants are on a listen-only basis. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone key.

Speaker Change: Greetings and welcome to the Hain Celestial second quarter 2024 earnings conference call. At this time, all participants are in a listen only mode.

Speaker Change: Question and answer session will follow the formal presentation if.

Speaker Change: Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: I'll now turn the conference over to your host, Alexis Tessier, Vice President of International Relations. You may begin. Good morning, and thank you for joining us on Hain Celestial's second quarter fiscal year 2024 earnings conference call. On the call today are Wendy Davidson, President and Chief Executive Officer, and Lee Boyce, Executive Vice President and Chief Financial Officer. During the course of this call, we may make forward-looking statements within the meaning of federal security law.

Speaker Change: I'll now turn the conference over to your host Alexia.

Alexia: S E Vice President of Investor Relations May begin.

Alexia: Good morning, and thank you for joining us on Hain celestial second quarter fiscal year 2024 earnings conference call.

Alexia: On the call today are Wendy Davidson, President and Chief Executive Officer, and Lee Boyer Executive Vice President and Chief Financial Officer.

Alexia: During the course of this call we may make forward looking statements within the meaning of federal Securities laws.

Alexis Tessier: These include expectations and assumptions regarding the company's future operations and financial performance. These statements are based on our current expectations and involve risks and uncertainties that could cause actual results to differ materially from our expectations. Please refer to our annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed from time to time with the SEC, as well as the press release issued this morning, for a detailed discussion of the risks that could cause our results to differ from those expressed or implied in any forward-looking statements made today. We've also prepared a presentation, inclusive of additional supplemental financial information, which is posted on our website at Hain.com under the Please note that remarks made today will focus on non-GAAP or adjusted financial measures. Reconciliations of non-GAAP financial measures to GAAP results are available in the earnings release and the slide presentation accompanying this call. This call has been webcast, and an archive will be made available on the website. Now, I'd like to turn the call over to Lynn. Thank you, Alexis.

Alexia: These include expectations and assumptions regarding the company's future operations and financial performance.

Lee Boyer: These statements are based on our current expectations and involve risks and uncertainties that could cause actual results to differ materially from our expectations.

Lee Boyer: Please refer to our annual report on Form 10-K quarterly reports on Form 10-Q, and other reports filed from time to time with the SEC as well as the press release issued this morning for a detailed discussion of the risks that could cause our results to differ from those expressed or implied in any forward looking statements made today.

Lee Boyer: We have also prepared a presentation inclusive of additional supplemental financial information posted on our website at <unk> dot com under the investors.

Lee Boyer: Please note that remarks made today will focus on non-GAAP or adjusted financial measures.

Lee Boyer: Reconciliations of non-GAAP financial measures to GAAP results are available in the earnings release and the slide presentation accompanying this call.

Lee Boyer: The call is being webcast an archive will be made available on the site.

Lee Boyer: And now I'd like to turn the call over to Lynn.

Lynn: Thank you Alexis and good morning, and thank you all for joining US today I will begin today's call by first reviewing our second quarter results and then provide an update on the progress with our Hain re imagine strategy to return the business to profitable growth. Lee will then review our financial results in more detail along with our outlook for the year.

Wendy Davidson: And good morning. And thank you all for joining us today. I will begin today's call by first reviewing our second quarter results and then providing an update on the progress with our Hain Reimagined Strategy to return the business to profitable growth. Lee will then review our financial results in more detail along with our outlook for the year. We are pleased that our second quarter delivered sequential improvement from our first quarter as anticipated in revenue, growth margin, and adjusted EBITDA. Our international business segment continued its strong growth led by pricing, distribution, and currency benefits, and our North America business segment improved revenue trends compared to our first quarter. Adjusted EBITDA for the first half came in ahead of our plan, but it was down versus the prior year due to lower volume and increased investments in marketing and SG&A, offset by both pricing and productivity. Lee will provide greater detail in his remarks.

Lynn: We are pleased that our second quarter delivering sequential improvement from our first quarter as anticipated and revenue gross margin and adjusted EBITDA. Our international business segment continued its strong growth led by pricing distribution and currency benefits and our North American business segment improved revenue trend compared to our first quarter.

Lynn: Adjusted EBITDA for the first half came in ahead of our plan, but was down versus prior year due to lower volume and increased investments in marketing and SG&A offset by both pricing and productivity, we will provide greater detail in his remarks.

Wendy Davidson: We are making continued progress on the four pillars of our Hain Reimagined strategy, focusing our business on our five core categories and our five core geography, progress in building our organizational capabilities to scale our brands and gain share, driving growth through innovation and channel expansion, and progress in generating fuel through working capital management and productivity savings to expand our margins and transform our business for sustained performance. This momentum contributed to the sequential improvement in both our top and bottom line trends and is expected to drive growth in our second half. As we outlined on Investor Day, Fiscal 24 is the foundational year of our multi-year transformation strategy.

Lynn: We are making continued progress on the four pillars of our Hain re imagine strategy, focusing our business and our five core category in our five core geographies.

Lynn: Progress in building, our organizational capabilities to scale, our brands and gained share driving growth through innovation and channel expansion and progress in generating fuel through working capital management and productivity savings to expand our margins and transform our business for sustained performance.

Lynn: Momentum contributed to the sequential improvement in both our top and bottom line trends and is expected to drive growth in our second half.

Lynn: As we outlined on Investor day fiscal 'twenty four is the foundational year of our multi year transformation strategy.

Wendy Davidson: In the first half of the year, we prioritize execution against the focus and fuel pillars of our strategy, which will enable us to fund incremental investments in capabilities for the build pillar in the back half of the year to support accelerated growth. Let's look now at some highlights across the business for the second quarter. Our snack category dollar growth trends have improved since the start of the fiscal year, and I'm pleased with the momentum we are building. This improvement in trend occurred despite the first half strategic changes we made in our promotional strategy and channel mix, which resulted in short-term impacts on our overall snack category trend. Our largest snack brand, Garden Veggie Snacks, grew dollar sales more than 3% in the second quarter across all customers, measured and non-measured.

Lynn: In the first half of the year, we prioritize execution against the focus and fuel pillars of our strategy, which will enable us to fund incremental investments in capabilities for the build pillar in the back half of the year to support accelerated growth.

Lynn: Let's look now at some highlights across the business for the second quarter.

Our snack category dollar growth trends have improved since the start of the fiscal year and I'm pleased with the momentum. We are building. This improvement in trend occurred. Despite the first half strategic changes we made in our promotional strategy and channel mix, which resulted in short term impact on our overall snack category trends are.

Our largest snack brand garden veggie snack grew dollar sales more than 3% in the second quarter across all customers measured and non measured and Terra chips grew dollar sales, 8% in the quarter and grew unit five per cent and gained share.

Wendy Davidson: And Tara Chips grew dollar sales 8% in the quarter and grew units 5% and gained share. With channel expansion a key growth lever for our snack brands, we are pleased to see our non-measured trends outpacing measured channels, and both non-measured and C-store sales continuing to grow double digits. We are excited for our flavor burst innovation launch in the garden veggie brand that should further drive our revenue growth in the second half, which I'll elaborate on more shortly. In the baby and kids category, industry-wide organic formula supply shortages persisted from quarter one into quarter two.

With channel expansion of key growth lever for our snack brands. We are pleased to see our non measured trends outpacing measured channel and both non measured and C store sales continuing to grow double digits.

Lynn: We are excited for our flavor burst innovation launch in the garden Veggie brand that should further drive our revenue growth in the second half, which I'll elaborate on more shortly.

Lynn: And the baby and kids category industry wide organic formula supply shortages persisted from quarter one into quarter. Two we continue to work with industry supplier partners and I'm happy to report we have secured supply commitments that we expect to support double digit year over year growth during the second half and improved end market consumption by.

Wendy Davidson: We continue to work with industry supplier partners, and I'm happy to report we have secured supply commitments that we expect to support double-digit year-over-year growth during the second half and improved in-market consumption by the fourth quarter. Excluding formula, our overall global baby and kids category continues to perform well. Earth's Best Snacks and Baby Food are outperforming the total category driven by pricing and distribution gains with expansion into Canada this year. And our UK-based Ella's Kitchen branch grew net sales year-on-year, gaining share in e-commerce by optimizing online visibility and enhancing customer planning. In our beverage category, we grew net sales year over year. Celestial Seasoning, the number one bagged herbal tea brand in North America, grew dollar sales in the most recent quarter and gained share, driven by success in both brand building with our Magic in Your Mug campaign and with innovation with the continued performance of both Sleepytime Melatonin and Throat Cooler.

Lynn: The fourth quarter.

Lynn: Excluding formula our overall global Baby and kids category continues to perform well Earth's best snacks and baby food are outperforming the total category driven by pricing and distribution gains with expansion into Canada. This year and our U K based Ella's kitchen brands grew net sales year on year gaining share in E comm.

Lynn: <unk> by optimizing online visibility and enhancing customer planning.

Lynn: And our beverage category, we grew net sales year over year.

Lynn: She'll fees me the number one bag herbal tea brand in North America grew dollar sales in the most recent quarter and gained share driven by success in both brand building with our magic in your mug campaign and with innovation with the continued performance of both sleep time melatonin and broke cooler.

Wendy Davidson: In the international segment, we grew non-dairy beverage net sales for the second consecutive quarter, driven by both private label and brand growth across our Lima and Nittumi brands. Our Meal Prep category grew net sales year over year, led by Spectrum Oil, Maranatha Nut Butters, and Imagine Soup in North America, and Branded Soups, Hartley's Jams and Jellies, as well Spectrum Oil grew dollar sales by mid-single digits, driven by strong velocity. And our branded soup portfolio continued its strong momentum with mid-single-digit year-over-year growth, ahead of the category and gaining share. Our three international brands, New Covent Garden, Yorkshire Provender, and Cully & Sully, are the number one, two, and three leading fresh soup brands in the UK.

Lynn: In the International segment, we grew non dairy beverage net sales for the second consecutive quarter, driven by both private label and brand growth across our Lima, and there are too many brands.

Lynn: Our meal prep category grew net sales year over year led by spectrum oil Maranatha nut Butters and imagine soup in North America, and branded soups, partly jams and jellies as well as our private label grocery business and international.

Lynn: From oil grew dollar sales by mid single digits, driven by strong velocity in our branded soup portfolio continued its strong momentum with mid single digit year over year growth ahead of the category and gaining share.

Lynn: Our three international brand, New Covent Garden, Yorkshire, Provender, and Cully and Sully are the number one two and three leading fresh soup brands in the U K.

Wendy Davidson: Private label spread showed continued strength, growing dollars by double digits and gaining share. However, in the plant-based category, the overall category continues to be challenged. However, it returned to growth in the UK in the latest quarter in frozen, where the majority of our plant-based meat resales come from. We have two leading meat pre brands, Eve's, the number one brand in Canada, and Linda McCartney Foods, the number two brand in the UK. Ease is performing better than Category, resulting in both distribution and share gains, and we are seeing recovery in both branded and private label in the UK. Lastly, we continue to concentrate on stabilizing our personal care business. While we acknowledge we still have progress needed, we delivered year-over-year net sales growth overall, led by Alba Suncare, Avalon Organics, and LiveClean, a leading personal care brand in Canada.

Lynn: Private label spreads showed continued strength growing dollars by double digits and gaining share.

Lynn: And the plant based category. The overall category continues to be challenged however, it returned to growth in the U K in the latest quarter and frozen where the majority of our plant based meat resale come from.

Lynn: We have two leading meat free brand is the number one brand in Canada, and Linda Mccartney food the number two brand in the U K.

Lynn: He said, it's performing better than category, resulting in both distribution and share gains and we are seeing recovery in both branded and private label in the U K.

Lynn: Lastly, we continue to concentrate on stabilizing our personal care business well.

Lynn: While we acknowledge we still have progress needed we delivered year over year net sales growth overall led by Alba Sun care Avalon organics and in live clean a leading personal care brand in Canada. We're.

Wendy Davidson: We're seeing growth in e-commerce and other non-measured channels, leading to unmeasured growth for our overall portfolio. And we've made progress optimizing our manufacturing capacity utilization for improved efficiency. As Lee will outline, we will be pulling forward some of the Hain Reimagined initiatives originally planned in fiscal year 25 that will result in a top-line drag on the personal care portfolio in the back half of this fiscal year but enable us to accelerate key business mix improvements. Overall, we continue to be encouraged by the bright spots we're seeing across our five categories and our five geographies.

Lynn: We're seeing growth in e-commerce, and other non measured channels, leading to non measured growth for our overall portfolio and we've made progress optimizing our manufacturing capacity utilization for improved efficiency as Lee will outline we will be pulling forward. Some of the hain re imagined initiatives originally planned in fiscal year 'twenty five.

Lynn: That will result in a top line drag to the personal care portfolio in the back half of this fiscal year, but enable us to accelerate key business mix improvements.

Lynn: Overall, we continue to be encouraged by the bright spots, we're seeing across our five category and our five geographies.

Wendy Davidson: Turning to our Hain Reimagined Progress, as we've said, fiscal 24 is the foundational year of our strategy. We're making great strides towards focusing our business, resetting our global operating model, enhancing critical capabilities across brand building, channel expansion, and innovation, and in implementing our fuel program. Our second quarter results demonstrate a marked improvement sequentially in year-over-year trends. This improvement is even more pronounced if you include the short-term impact of baby formula.

Lynn: Turning to our Hain re imagine progress as we've said fiscal 'twenty four is the foundational year of our strategy, we're making great strides towards focusing our business resetting our global operating model enhancing critical capabilities across brand building channel expansion and innovation and in implementing our fuel program.

Lynn: Our second quarter results demonstrate a marked improvement sequentially and year over year trend. This improvement is even more pronounced if you exclude the short term impact of baby formula.

Lynn: This reinforces confidence that our Hadrian imagine strategy is on track as we begin to deliver on our promise of returning our company to profitable growth.

Wendy Davidson: This reinforces confidence that our Hained Reimagined strategy is on track as we begin to deliver on our promise of returning our company to profitable growth. As a reminder, Hained Reimagined is built upon four strategic pillars: focus, grow, build, and fuel. Starting with the focus pillar, we've made great progress in simplifying our business and aligning our global teams and functions to support a high performance culture. We recently welcomed a new chief people officer, Amber Jefferson, to our global executive leadership team.

Lynn: As a reminder, pain re imagined is built upon four strategic pillars focus.

Lynn: <unk> build and fuel.

Lynn: Starting with a focused pillar, we've made great progress in simplifying our business and aligning our global teams and functions to support our high performance culture.

We recently welcomed a new chief people officer, Amber Jefferson to our global Executive leadership team.

Amber Jefferson: Amber will be instrumental in building out our people strategy to enable our high performance culture, and a strong pipeline of talent to help us deliver on our full potential.

Wendy Davidson: Amber will be instrumental in building out our people strategy to enable our high performance culture and a strong pipeline of talent to help us deliver on our full potential. During the quarter, we also made strong progress on streamlining our footprint as well, opening our right-sized headquarters in Hoboken, New Jersey, consolidating our sales offices in Europe, and continuing to optimize capacity utilization in our manufacturing facilities across both meat-free and personal care. The rollout of our agile working model to leverage our hub-and-spoke footprint is delivering on our high-performance culture objectives. In the past 12 months, our applications are up 300% on fewer job openings, and applications are up 500% with women.

Amber Jefferson: During the quarter. We also made strong progress on streamlining our footprint as well opening or rightsize headquarter in Hoboken, New Jersey, consolidating our sales offices in Europe, and continuing to optimize capacity utilization in our manufacturing facilities across both meat free and personal care.

Amber Jefferson: The rollout of our agile working model to leverage our hub and spoke footprint is delivering on our high performance culture objective.

Amber Jefferson: In the past 12 months, our applications are up 300% on fewer job openings and applications are up 500% with women our turnover remains below industry average and our engagement scores improved by 8%.

Amber Jefferson: Looking ahead to the balance of the year, we will be pulling forward. Several focused pillar initiative designed to establish a winning portfolio of skus.

Wendy Davidson: Our turnover remains below the industry average, and our engagement score has improved by 8%. Looking ahead to the balance of the year, we will be implementing several focus pillar initiatives designed to establish a winning portfolio skew, streamline our operations, and simplify our geographic footprint. These initiatives are an important step towards eliminating complexity in our business, allowing us to concentrate our resources more effectively on the areas where we have the greatest right to win. Under our growth pillar, our goal is to drive share gains across our core snack, baby, and kids, and beverage platforms. These platforms have gained incremental distribution across mass and grocery channels, reinforcing our confidence that this momentum will continue to build throughout the year and support our pivot to growth in the back.

Amber Jefferson: <unk> mine, our operations and simplify our geographic footprint. These.

Amber Jefferson: These initiatives are an important step towards eliminating complexity in our business, allowing us to concentrate our resources more effectively on the areas, where we have the greatest right to win.

Amber Jefferson: Under a growth pillar our goal is to drive share gains across our core snack baby and kids and beverage platforms.

Amber Jefferson: These platforms have gained incremental distribution across mass and grocery channels reinforcing our confidence that this momentum will continue to build throughout the year and support our pivot to growth in the back half.

Amber Jefferson: Our build pillar is centered on brand building channel expansion and innovation as we mentioned previously we're driving improved marketing efficiency through a reshaping of working and nonworking media and leveraging both paid and earned media to drive brand awareness and reach we launched our Hain agile and amped brand building model globally.

Wendy Davidson: Our build pillar is centered on brand building, channel expansion, and innovation. As we mentioned previously, we're driving improved marketing efficiency through a reshaping of working and nonworking media and leveraging both paid and earned media to drive brand awareness and reach. We launched our Hain Agile and Amped brand building model globally and began to ramp up brand campaigns in the first half of the year for Celestial Seasonings with Magic in Your Mug and the beloved Sleepytime Bear, as well as targeted marketing for Greek Gods Yogurt. We've begun to leverage global platform insights and campaigns for our leading baby and kids brands. Earth's Best with Good Food Made Fun in North America and Eat Play Fun for Ella's Kitchen in the UK.

Amber Jefferson: <unk> and began to ramp up brand campaigns in the first half of the year for celestial seasonings with magic and your mug in the beloved Sleepy time bear and targeted marketing on Greek gods yogurt.

Amber Jefferson: We've begun to leverage global platform insights and campaign for our leading baby and kids brands Earth's best with good food made fun in North America, and eat play fun for Ella's kitchen in the U K.

Amber Jefferson: Our improved effectiveness and our brand building spend will drive more from our core products and brands and also support new innovation launch like that.

Amber Jefferson: For innovation, we continue to enhance our capabilities and pipeline working to leverage key insights to develop breakthrough scalable innovation.

Amber Jefferson: Our recent launch of garden Veggie flavor burst tortilla chip is a prime example.

Amber Jefferson: Created from consumer research highlighting a gap in the better for you snacking segment flavor burst fills the better for you tortilla chip buoyed by combining the craveable flavors of Nacho cheese, and Dusty ranch with Holt with wholesome ingredients, including non GMO corn and colorful veggie with no artificial flavors and no artificial.

Wendy Davidson: Our improved effectiveness and our brand building spend will drive more from our core products and brands and also support new innovation launch success. For innovation, we continue to enhance our capabilities and pipeline, working to leverage key insights to develop breakthrough scalable innovation. Our recent launch of Garden Veggie Flavor Burst Tortilla Chips is a prime example. Created from consumer research highlighting a gap in the Better for You snacking segment, Flavor Burst fills the Better for You tortilla chip void by combining the craveable flavors of nacho cheese and zesty ranch with wholesome ingredients including non-GMO corn and colorful vegetables with no artificial flavors and no artificial preservatives.

Amber Jefferson: Fishel preservative consumer testing results have been outstanding and we've received nearly 100% retailer acceptance in both the U S and Canada.

Amber Jefferson: Flavor burst will hit the market with strong initial ACB and we expect distribution to build based upon retailer commitments.

Amber Jefferson: Any flavor burst up to be the strongest innovation launch in recent company history.

Amber Jefferson: We're supporting the launch of a robust omni channel activation, leveraging our agile and Ams brand building model to drive awareness trial and repeat purchase plus on shelf and online.

Wendy Davidson: Consumer testing results have been outstanding, and we've received nearly 100% retailer acceptance in both the U.S. and Canada. Flavor Burst will hit the market with strong initial ACV, and we expect distribution to build based upon retailer commitments, setting Flavor Burst up to be the strongest innovation launch in recent company history. We are supporting the launch through a robust omni-channel activation, leveraging our Agile and AMPS brand-building models to drive awareness, trial, and repeat purchase, both on-shelf and online. Flavor Burst Tortilla will be a strong driver of our year-on-year second-half growth in the snacks category.

Flavor burst tortilla will be a strong driver of our year on year second half growth in the snack category to support the strong launch you will see a sequential increase in marketing investment in quarter three and.

Amber Jefferson: In addition to innovation, we are strengthening our channel expansion capabilities in both away from home and ecommerce.

Amber Jefferson: As our new team scale up we are pleased to see our C store sales up 15% in the quarter driven by our snacks business, which was up 18%.

Amber Jefferson: Further in January we expanded snacks distribution to more than 10000 and C stores, increasing our store count in this margin accretive channel by double digits.

Wendy Davidson: To support the strong launch, you will see a sequential increase in marketing investment in Q3. In addition to innovation, we are strengthening our channel expansion capabilities in both away from home and e-commerce. As our new teams scale up, we are pleased to see our C-store sales up 15% in the quarter, driven by our snacks business, which was up 18%. Furthermore, in January, we expanded SNAC's distribution to more than 10,000 C-Stores, increasing our store count in this margin-accretive channel by double digits, and Garden of Eaton had several significant wins in commercial restaurants, helping drive both revenue and reach.

Amber Jefferson: And garden of Eatin has had several significant wins in commercial restaurants, helping drive both revenue and reach on the ecommerce side. We were pleased to see digital sales penetration and our unified commerce retailers growing and outpacing grocery category averages brand building innovation and channel expansion are key drivers of our pivot to.

Amber Jefferson: Growth in the back half of the year.

Amber Jefferson: Our last pillar is fuel, which is designed to unlock efficiencies across our business to fund our growth and drive margin expansion, our productivity pipeline as measured by cost savings initiatives in our manufacturing operations is robust and on track to deliver our targeted savings to offset inflation within the year.

Wendy Davidson: On the e-commerce side, we are pleased to see digital sales penetration at our unified commerce retailers growing and outpacing grocery category averages. Brand building, innovation, and channel expansion are key drivers of our pivot to growth in the back half of the year. Our last pillar is fuel, which is designed to unlock efficiencies across our business to fund our growth and drive margin expansion.

Amber Jefferson: Our revenue growth management initiatives are on track for fiscal 'twenty, four expected savings largely in trade and non trade efficiencies net price realization and price pack architecture.

Amber Jefferson: Our working capital initiatives are also on plan to reach fiscal 'twenty four targets we.

Amber Jefferson: We have approximately 80% of our payables target committed to date and our raw and packing inventory is over 20% lower than a year ago and our finished goods remain below the expected seasonal build for the first half better than we projected on the last earnings call.

Wendy Davidson: Our productivity pipeline, as measured by cost savings initiatives and our manufacturing operations, is robust and on track to deliver our targeted savings to offset inflation within the year. Our revenue growth management initiatives are on track for fiscal 24 expected savings, largely in trade and non-trade efficiencies, net price realization, and price tech architecture. Our working capital initiatives are also on track to reach fiscal 24 targets.

We are continuing to unlock value through our fuel program, which will facilitate reinvestment in the business and the return to growth in the back half of the fiscal year.

Amber Jefferson: I'm excited that we've made strong progress in our fuel initiative and for our plan to deliver continued sequential improvement in our business and year on year growth in quarter, three and quarter four.

Amber Jefferson: With Formula supply recovery distribution gains and innovation and channel expansion and continued momentum in our international region. We have many reasons to believe in our outlook for our pivot to growth in the back half in spite of the challenging macroeconomic environment.

Wendy Davidson: We have approximately 80% of our payables target committed to date, and our raw impact inventory is over 20% lower than a year ago, and our finished goods remain below the expected seasonal build for the first half, better than we projected on the last earnings call. We are continuing to unlock value through our fuel program, which will facilitate reinvestment in the business and a return to growth in the back half of the fiscal year. I'm excited that we've made strong progress on our fuel initiative and for our plan to deliver continued sequential improvement in our business and year-on-year growth in quarter three and quarter four. With formula supply recovery, distribution gains and innovation, channel expansion, and continued momentum in our international region, we have many reasons to believe in our outlook for a pivot to growth in the back half in spite of the challenging macroeconomic environment. Before I hand the call over to Lee, I want to thank the entire Hain team for their dedication, their passion, and their hard work.

Amber Jefferson: Before I hand, the call over to Lee I want to thank the entire hain team for their dedication their passion and their hard work as we re imagine Haynesville last Joe and redefine the future of better for you purpose driven brands. Our global team has played a pivotal role in putting new plans into action coming together to grow our brands our business.

Lee Boyer: Our impact and our people.

Lee Boyer: Want to thank them for their continued commitment to lead with purpose deliver hain values and to demonstrate possibility thinking with that I'll turn the call over to Lee.

Lee Boyer: Thank you Wendy and good morning, everyone Q2 delivered a sequential improvement in both topline and bottom line performance versus Q1.

Lee Boyer: This was driven by the focus and fuel pillars of Hain re imagined and establishes the pathway to continue to deliver sequentially improving growth rates as we move through the balance of the year.

Lee Boyer: Consolidated net sales for the second quarter were flat versus the prior year period at $454 million in.

Lee Boyer: An improvement sequentially from the first quarter decrease of three 3% year over year.

Lee Boyer: Organic net sales for the second quarter adjusted to exclude the effects of divestitures and discontinued brands increased 0.2% versus the prior year period.

Wendy Davidson: As we've reimagined Hain Celestial and redefined the future of better-for-you, purpose-driven brands, our global team has played a pivotal role in putting new plans into action, coming together to grow our brands, our business, our impact, and our people. I want to thank them for their continued commitment to lead with purpose, live our Hain values, and demonstrate possibility thinking. With that, I'll turn the call over to Lee.

Lee Boyer: An improvement sequentially from the 2.9% year over year decrease in the first fiscal quarter.

Lee Boyer: Organic net sales growth in the second quarter reflects an approximately two percentage point benefit from foreign exchange.

Lee Boyer: The increase in organic net sales was driven by sales growth in the international segment offset by lower sales in the North America segment as expected.

Lee Boyce: Thank you, Wendy. Good morning, everyone. Q2 delivered a sequential improvement in both top-line and bottom-line performance versus Q1. This was driven by the focus and fuel pillars of Hain Reimagined and establishes the pathway to continue to deliver sequentially improving growth rates as we move through the balance of the year. Consolidated net sales for the second quarter were flat versus the prior year period at $454 million, and sequentially from the first quarter decrease of 3.3% year over year.

Lee Boyer: There was a 2% drag on organic net sales growth in the quarter.

Lee Boyer: We delivered second quarter, adjusted EBITDA of $47 million versus $50 million in the prior year period.

Lee Boyer: Adjusted EBITDA margin was 10, 4% as compared to 11% in the prior year period.

Adjusted gross margin was 23, 5% in the second quarter, an increase of approximately 60 basis points versus the prior year period.

Lee Boyce: Organic net sales for the second quarter, adjusted to exclude the effects of divestitures and discontinued brands, increased 0.2% versus the prior year period and improved sequentially from the 2.9% year-over-year decrease in the first fiscal quarter. Organic net sales growth in the second quarter reflects an approximately two percentage point benefit from foreign exchange. The increase in organic net sales was driven by sales growth in the international sector, offset by lower sales in the North America sector. As expected, formula was a 2% drag on organic net sales growth in the quarter. We delivered second quarter adjusted EBITDA of $47 million versus $50 million in the prior year period. The Adjusted EBITDA margin was 10.4% as compared to 11% in the prior year period.

Lee Boyer: The increase was driven by pricing and productivity savings, partially offset by deleverage on deleverage on lower sales volume and by cost inflation.

Lee Boyer: For full fiscal year 'twenty four we anticipate gross margin to show an improvement of 50 to 100 basis points versus the prior year.

Lee Boyer: SG&A increased two 2% year over year to $74 million, representing 16, 3% of net sales for the quarter.

Lee Boyer: The increase was driven primarily by higher marketing expense and people related expenses on the reinstatement of bonus accrual as expected.

Lee Boyer: Looking ahead, we expect to ramp up marketing spend in the third quarter in support of our flavor Bose launch and additional programming in the back half of the fiscal year on our priority brands.

Lee Boyer: During the second quarter, we took charges totaling $31 million associated with actions under the restructuring program, including contract termination costs asset write downs employee related costs and other transformation related expenses.

Lee Boyce: Adjusted growth margin was 23.5 percent in the second quarter, an increase of approximately 60 basis points versus the prior year period. The increase was driven by pricing and productivity savings, partially offset by de-leverage on lower sales volume and by cost inflation. For full fiscal year 24, we anticipate gross margin to show an improvement of 50 to 100 basis points versus the prior year. SG&A increased 2.2% year-over-year to $74 million, representing 16.3% of net sales for the quarter.

Lee Boyer: All of these charges 21 million were noncash.

Lee Boyer: Interest costs for the second quarter rose, 49% to $16 million.

Lee Boyer: Due to the higher variable interest on the unhedged portion of our debt.

Lee Boyer: Partially offset by lower outstanding borrowings.

Lee Boyer: As a reminder, we have hedged oil rate to exposure on approximately 50% of our loan facility with fixed rates at five 6% and remain keenly focused on driving down net debt over time.

Lee Boyce: The increase was driven primarily by higher marketing expense and people-related expenses on the reinstatement of bonus accrual, as expected. Looking ahead, we expect to ramp up marketing spend in the third quarter in support of our Flavor Burst launch and additional programming in the back half of the fiscal year on our priority brand. During the second quarter, we took charges totaling $31 million associated with actions under the restructuring program, including contract termination costs, asset write-downs, employee-related costs, and other transformation-related expenses. Of these charges, 21 million were non-cash.

Lee Boyer: All of these factors combine to produce net loss for the quarter of $14 million or 15 cents per diluted share.

Lee Boyer: <unk> to net income of $11 million or 12 cents per diluted share in the prior year period.

Lee Boyer: Adjusted net income, which excludes the effect of restructuring charges amongst other items was $11 million or 12 cents per diluted share versus $18 million or 20 cents in the prior year period.

Lee Boyce: Interest costs for the second quarter rose 49% to $16 million. This was due to the higher variable interest on the unhedged portion of our debt, partially offset by lower outstanding borrowings. As a reminder, we have hedged our rate exposure on approximately 50% of our loan facility with fixed rates at 5.6% and remain keenly focused on driving down net debt over time. All of these factors combine to produce a net loss for the quarter of $14 million, or $0.15 per diluted share, compared to net income of $11 million, or $0.12 per diluted share in the prior year period.

Lee Boyer: Yeah.

Lee Boyer: Now turning to our individual reporting segments.

Lee Boyer: In North America reported net sales decreased five 2% year over year to $268 million in the second quarter.

Lee Boyer: Organic net sales decreased by four 8% versus the prior year period due to sales volume decline in baby and kids, which is a function of continued industry wide challenges in organic baby formula supply as previously discussed.

Lee Boyce: Adjusted net income, which excludes the effect of restructuring charges amongst other items, was $11 million, or $0.12 per diluted share, versus $18 million, or $0.20 in the prior year period. Now turning to our individual reporting sectors, in North America, reported net sales decreased 5.2% year over year to $268 million in the second quarter.

Lee Boyer: And lower sales in snacks, as we shifted our promotional strategy and optimized our channel mix for improved trade efficiency and profitability.

Lee Boyer: This was partially offset by growth in beverages.

Lee Boyer: Believe me there was a 3% drag on organic net sales in the quarter.

Lee Boyer: Second quarter adjusted gross margin in North America was 24, 8%, a 40 basis point decrease versus the prior year period, driven by deleverage on lower sales volume and cost inflation.

Lee Boyce: Organic net sales decreased by 4.8% versus the prior year period due to a sales volume decline in baby and kids, which is a function of continued industry-wide challenges in organic baby formula supply, as previously discussed, and lower sales in snacks as we shifted our promotional strategy and optimized our channel mix for improved trade efficiency and profitability. This was partially upset by growth in beverages, and formula was a 3% drag on organic net sales in the quarter. Second quarter adjusted gross margin in North America was 24.8%, a 40 basis point decrease versus the prior year period, driven by deleverage on lower sales volume and cost inflation, partially offset by pricing and productivity savings. Adjusted EBITDA in North America was $31 million, an 18.9% decrease versus the prior year period.

Lee Boyer: Partially offset by pricing and productivity savings.

Lee Boyer: Adjusted EBITDA in North America was $31 million and the 18, 9% decrease versus the prior year period, and adjusted EBITDA margin was 11, 7% a 190 basis point decrease from the prior year period.

Lee Boyer: These year over year declines resulted from lower volume inflation and marketing investments, partially offset by productivity.

Lee Boyer: In our international business reported net sales demonstrated continued strength.

Lee Boyer: Increasing eight 5% to $186 million in the second quarter.

Lee Boyer: Organic net sales growth was also eight 5%.

Lee Boyer: This reflects 5.8 percentage points of growth from FX.

Lee Boyce: An adjusted EBITDA margin was 11.7%, a 190 basis point decrease from the prior year period. These year-over-year declines resulted from lower volume, inflation, and marketing investments, partially offset by productivity. In our international business, reported net sales demonstrated continued strength, increasing 8.5% to $186 million in the second quarter. Organic net sales growth was also 8.5%. This reflects 5.8 percentage points of growth from FX. As Wendy mentioned earlier, our growth was primarily driven by meal prep, including private label and branded jams and jellies, private label meat-free, and our branded soup brands, and non-dairy beverage growth. International adjusted gross margin was 21.6 percent, up approximately 260 basis points year over year driven by pricing partially offset by inflation. International adjusted EBITDA was $26 million, a 35% increase from the prior year period, driven primarily by pricing, partially offset by lower volumes and inflation.

Lee Boyer: As Wendy mentioned earlier, our growth was primarily driven by mill prep, including private label and branded jams and jellies private label meat free and all branded soups brands and non dairy beverage growth.

Lee Boyer: Okay.

Lee Boyer: International adjusted gross margin was 21, 6%.

Lee Boyer: Off approximately 260 basis points year over year, driven by pricing, partially offset by inflation.

Lee Boyer: International adjusted EBITDA was $26 million, a 35% increase from the prior year period, driven primarily by pricing, partially offset by lower volumes and inflation.

Lee Boyer: Adjusted EBITDA margin was 13, 9%.

Lee Boyer: Approximately 270 basis points versus the prior year period.

Lee Boyer: Now shifting to cash flow and the balance sheet.

Lee Boyer: We generated second quarter cash from operating activities of $21 million versus $3 million a year ago.

Lee Boyer: Higher operating cash resulted from continued working capital management, including our accounts payable optimization and inventory management initiatives tied to the fuel pillow hanging re imagined.

Lee Boyce: Adjusted EBITDA margin was 13.9%, up approximately 270 basis points versus the prior year period. Now, shifting to cash flow on the balance sheet, we generated second quarter cash from operating activities of $21 million, versus $3 million a year ago.

Lee Boyer: Capex was $6 million in the quarter and we now expect expenditures to be in the mid Forty's for fiscal 2024.

Lee Boyce: The higher operating cash resulted from continued working capital management, including our accounts payable optimization and inventory management initiatives tied to the fuel pillar of Hain Reimagined. CapEx was $6 million in the quarter. And we now expect expenditures to be in the mid 40s for fiscal 2024. Finally, we close the quarter with cash on hand of $54 million and net debt of $756 million, translating into a net leverage ratio of 4.2 times, as calculated under our amended credit agreement. We drove leverage lower than we had previously projected due to better cash flow on momentum from our fuel initiative. Paying down debt and strategically investing in the business continue to be our priorities for cash utilisation. Consistent with our stated priorities for cash, we have reduced net debt by $91 million since the end of Q1 2023.

Lee Boyer: Finally, we closed the quarter with cash on hand of $54 million and net debt of $756 million.

Lee Boyer: Translating into a net leverage ratio of 4.2 times as calculated under our amended credit agreement.

Lee Boyer: We drove leverage lower than we had previously projected due to better cash flow on momentum from our fuel initiatives.

Lee Boyer: Paying down debt and strategically investing in the business continues to be our priorities for cash utilization.

Lee Boyer: Consistent with our stated priorities for cash we have reduced net debt by $91 million since the end of Q1 2023.

Lee Boyer: And as we've previously indicated our long term goal is to reduce balance sheet leverage to three times adjusted EBITDA or less.

Lee Boyer: Turning to our outlook.

Lee Boyer: We are making early progress against Hain re imagined, especially in the delivery of fuel as planned and is foundational year the restructuring program.

Lee Boyce: And as we have previously indicated, our long-term goal is to reduce balance sheet leverage to three times adjusted EBITDA or less, according to our Outlook. We are making early progress against Hain Reimagined, especially in the delivery of fuel, as planned in this foundational year of the restructuring program. We have accelerated some of the initiatives outlined in the focus pillar, primarily Portfolio and Channel Mix Improvement. This is expected to create a near-term revenue headwind as we rationalize lower margin skews and sales. As a result, we believe it is prudent to take a more conservative view of the balance of fiscal 2024.

Lee Boyer: We have accelerated some of the initiatives outlined in the focus pillar, primarily portfolio and channel mix improvements.

Lee Boyer: This is expected to create a near term revenue headwind as we rationalize lower margin Skus and styles.

Lee Boyer: As a result, we believe it is prudent to take a more conservative view of the balance of fiscal 'twenty 'twenty four.

Lee Boyer: In addition, we expect less of a tailwind from foreign exchange than when we initially provided guidance in August.

Considering these factors as well as performance year to date, we are adjusting our guidance for the full year.

Lee Boyce: In addition, we expect less of a tailwind from foreign exchange than when we initially provided guidance in August. Considering these factors, as well as performance year to date, we are adjusting our guidance for the fall year. On the bottom line, we delivered better results versus expectations through Q2 year-to-date. However, as previously stated, a tenet of Hain Reimagined is to link our brand building, innovation, and channel expansion investments to the supporting generation of investment fuel. Consequently, the over delivery in the first half of fiscal year 2024 will be utilized in the second half to step up investments to drive longer-term volume growth and margin expansion. Our revised fiscal 2024 guidance is as follows; we expect organic net sales growth of approximately 1% or more year over year, adjusted EBITDA to be between $155 and $160 million, and free cash flow of 40 to $45 million, which now reflects costs associated with Hain Reimagined.

Lee Boyer: On the bottom line, we delivered better results versus expectations through Q2 year to date.

Lee Boyer: However, as previously stated at tenet of Hain re imagined is to link how brand building innovation and channel expansion investments to the supporting generation of investment fuel.

Consequently, the over delivery in the first half of fiscal year 'twenty 'twenty four will be utilized in the second half to step up investments to drive longer term volume growth and margin expansion.

Lee Boyer: Our revised fiscal 'twenty 'twenty four guidance is as follows we expect organic net sales growth of approximately 1% or more a year over year.

Adjusted EBITDA to be between 155 and $160 million.

Lee Boyer: And free cash flow of $40 million to $45 million, which now reflects 20 'twenty forecast associated with Hain re imagined.

Lee Boyer: Our 'twenty 'twenty four guidance assumes that first currency exchange rates will not materially change from today's rates, resulting in an approximately one point net sales benefit from foreign exchange.

Lee Boyce: Our 2024 guidance assumes, first, currency exchange rates will not materially change from today's rates, resulting in an approximately one point net sales benefit from foreign exchange. This compares to an approximately two points net sales benefit when we gave guidance in August. Second, net pricing will recover most of the expected cost inflation as we continue to make progress on revenue growth management initiatives. And finally, productivity will drive gross margin expansion and fuel investment. Lastly, we're now projecting the annual effective income tax rate to be between 32 and 33%.

Lee Boyer: This compares to an approximately two point net sales benefit when we gave guidance in August.

Lee Boyer: Second net pricing will recover most of the expected cost inflation as we continue to make progress on revenue growth management initiatives.

Lee Boyer: And finally, the productivity will drive gross margin expansion and fuel investments.

Lee Boyer: Lastly, we're now projecting the annual effective income tax rate to be 32% to 33%.

Lee Boyce: This is primarily as a result of a shift in the geographical mix of earnings and the associated impact related to global, intangible, low-taxed income and limitations on certain deductions. While we are not providing specific guidance for the fiscal third quarter, we do want to provide some color on the shape of the balance of the year. In keeping with our expectation of momentum building throughout the year, we anticipate organic net sales growth in the third fiscal quarter to be greater than that in the fiscal second quarter, and organic net sales growth in the fiscal fourth quarter to be greater than that in the fiscal third quarter. Similarly, we expect continued sequential improvement in adjusted EBITDA growth rates. Now, I turn back to Wendy for closing remarks.

Lee Boyer: This is primarily as a result of a shift in the geographical mix of earnings.

Lee Boyer: C. A T the impacts related to global intangible low taxed income and limitations on certain deductions.

Lee Boyer: While we are not providing specific guidance for the fiscal third quarter, we do want to provide some color on the shape of the balance of the year.

Lee Boyer: In keeping with our expectation of momentum building throughout the year, we anticipate organic net sales growth in the third fiscal quarter to be greater than that in the fiscal second quarter.

Lee Boyer: And organic net sales growth in the fiscal fourth quarter to be greater than that in the fiscal third quarter.

Lee Boyer: Similarly, we expect continued sequential improvement in adjusted EBITDA growth rates.

Lee Boyer: Now I'll turn it back to Wendy for closing remarks.

Wendy Davidson: Thank you, Lee. Amid our company's transformation, we remain committed to driving positive change for people, communities, and the planet through Better4U Brands. Making a positive impact on the world around us is core to our Hain Company purpose. To that end, we're proud to share that we will soon be publishing our annual global impact report, which outlines the progress we are making towards our goals for healthier people, healthier products, and a healthier planet. You will be able to access the report and learn more on our company website.

Wendy Davidson: Thank you Lee.

Wendy Davidson: Amid our company's transformation, we remain committed to driving positive change for people communities and the planet through better for you brands.

Wendy Davidson: Making a positive impact on the world around is core to our Hain company purpose.

Wendy Davidson: To that end, we're proud to share that we will soon be publishing our annual global impact report, which outlines the progress we are making towards our goals for healthier people healthier products and a healthier planet you'll be able to access the report and learn more on our company website.

Wendy Davidson: I am encouraged that we are continuing to report sequential improvements and fuel generation through our Hain Reimagined Strategy. As we outlined on Investor Day, our approach will be to pay as we go to generate fuel and reinvest in the business to deliver profitable growth and margin expansion. This is a multi-year strategy to transform the business, and we'll continue to balance the pacing and prioritization to deliver steady progress to our goals. We are pleased to see the second quarter demonstrate our progress made and the momentum in our business. The accelerating trends coupled with recent innovation and distribution gains across growth categories give us confidence that we will pivot to growth in the back half of the year. And the progress we're making in our fuel program will enable us to reinvest in the business to get the flywheel spinning and to realize our potential as a growth leader in better-for-you brands. We firmly believe the best is yet to come and appreciate you joining us on the call today. Thank you for your interest and for your continued support. With that, Operator, please open the line for questions.

Wendy Davidson: I am encouraged that we are continuing to report sequential improvements and fuel generation through our Hain re imagine strategy as we outlined on Investor day, our approach will be to pay as we go to generate fuel and reinvest in the business to deliver profitable growth and margin expansion. This is a multiyear strategy to transform the business.

Wendy Davidson: And we'll continue to balance the pacing and prioritization to deliver steady progress to our goal.

Wendy Davidson: We are pleased to see the second quarter demonstrate our progress made and the momentum in our business.

The accelerating trends, coupled with recent innovation and distribution gains across growth categories give us confidence that we will pivot to growth in the back half of the year and the progress we're making in our fuel program will enable us to reinvest in the business to get the flywheel spinning and to realize our potential as a growth leader in better for you brand with <unk>.

Speaker Change: We believe the best is yet to come and appreciate you joining the call today. Thank you for your interest and for your continued support with that operator. Please open the line for questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: Thank you and at this time, we'll be conducting a question and answer session.

Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

Speaker Change: Maybe first start to if you would like to remove your question from the queue.

Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We also ask all participants asking questions. Please limit themselves to only one question and one follow up question.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. We also ask all participants asking questions to please limit themselves to only one question and one follow-up question. We'll allow everyone in the queue enough time. Our first question comes from the line of Jim Solero with Stevens Inc. Please proceed with your questions. Hi, guys. Good morning.

Speaker Change: Everyone in the queue Apple enough ample time.

Speaker Change: Our first question comes from the line of Jim Suva with Stephens, Inc.

Jim Suva: Please proceed with your question.

Jim Suva: Hi, guys. Good morning, Thanks for taking our question.

Jim Suva: Oh, Florida.

Jim Suva: Hi, Good morning, I wanted to double click a little bit on the snacking growth.

Jim Solero: Thanks for taking our questions. Thank you all. Thank you. Morning, Wendy.

Jim Suva: It seems like.

Wendy Davidson: I wanted to double-click a little bit on the snacking growth, you know, it seems like the data that we have visibility into with the track channels don't really capture the full picture. And so if we think about the back half of the year, can you just maybe break out how much of the growth you expect? come from recovery in track channels, from what we can see, versus distribution gains, class, just organic sales growth in untracked channels. I appreciate the question.

Jim Suva: The data that we have visibility and with the tracked channels.

Florida: Don't really capture the full picture and so if we think about the back half of the year can you just maybe break out how much of the growth you expect to come from recovery in tracked channels from what we can see versus <unk>.

Florida: Distribution gains slash the organic sales growth in untracked channels.

Speaker Change: Yeah I appreciate the question and as we said when we look at.

Wendy Davidson: And as we said, when we leaned into Hain Reimagined on Investor Day, we were going to be driving disproportionate growth in channel expansion, especially in our snacks category. It's important to remind you that there were two big drivers in the snack category in the first half of the year. In quarter one, we had an impact on Tara because we made some decisions about optimizing promotion spend and channel mix. And so that was a quarter one impact. I'm pleased to say that we actually saw Tara grow in quarter two in both dollar sales as well as unit growth. In garden veggie, it was the opposite.

Speaker Change: Leaned into Hain re imagined on Investor day, we were going to be driving disproportionate growth in channel expansion, especially in our snacks category. It's important to remind there were two big drivers in the snack category in the front half of the year in quarter. One we had an impact in Tara because we made some did.

Speaker Change: <unk> in optimizing promotion spend and in channel mix and so that was a quarter one impact pleased to say that we actually saw terra in growth in quarter two in both dollar sales as well as unit growth.

Speaker Change: In Garden Veggie. It was the opposite we had good growth in quarter. One we made some choices in promotional shift and again some optimization around promotional spend in our our G. M initiatives that impacted garden, veggie straws or the garden Veggie brand in quarter, two really pleased.

Wendy Davidson: We had good growth in quarter one. We made some choices in promotional shifts and again some optimization around promotional spend in our RGM initiatives that impacted garden veggie straws or the garden veggie brand in quarter two. Really pleased with the distribution gains we've had in non-measured, so we mentioned in the earlier remarks that we now have our snacks brands in 10,000 C stores starting in January. We obviously have the garden veggie flavor burst launch that takes place right now, and we're beginning to see some momentum even in our measured channels in the last four weeks. So I think the combination of cleaning up our promotional activity, leaning on our channel mix and the work that we're seeing on TDPs as well as velocity combined with innovation and channel expansion in the back half gives us confidence in the snack portfolio. Right, and maybe a follow-up on the channel expansion. As you guys enter a channel where you've been underpenetrated in the past? Is it kind of a you have to prove that the products can work?

Speaker Change: The distribution gains we've had in non measured so we mentioned in the earlier remarks that we now have our snacks brands in 10000 and C stores starting in January we obviously have the garden veggie flavor bursts launch that takes place right now and we're beginning to see some momentum even in our measured.

Speaker Change: Panels in the latest four weeks.

Speaker Change: So I think the combination of cleaning up our promotional activity leaning on our channel mix and the work that we're seeing on T. D Pes as well as velocity combined with innovation and channel expansion in the back half give us confidence in the snack portfolio.

Speaker Change: Great.

Speaker Change: A follow up on the channel expansion.

Speaker Change: As you guys enter a channel where you've been.

Speaker Change: Underpenetrated in the past is it kind of a you have to prove that the products can work and so you come in with one or two Skus and then give the retailer a trial period to see if they want to add more or should we think of there's already kind of a plan in place that we should see distribute.

Wendy Davidson: And so you come in with one or two skews and then give the retailer, you know, a trial period to see if they want to add more? Or should we think of there's already kind of a plan in place that we should see distribution ramp up on track channels, as you guys introduce new products and, you know, get the promotional thing right. It's a great question.

Shouldn't ramp in on track channels as you guys introduce new products and.

Speaker Change: The promotional thing right sized.

Speaker Change: And that's a great question and the thing that I think we have felt all along we know that we have beloved consumer brands, they're just not able to find them everywhere. So the opportunity for us isn't proving the viability of the products or the viability of the brand is making them more available to the.

Wendy Davidson: And the thing that I think we have felt all along is that we have beloved consumer brands; they're just not able to find them everywhere. So the opportunity for us isn't proving the viability of the products or the viability of the brands; it's making them more available to the consumer where they're shopping. We've had great retailer take rates in all retail, in food service, and in C-Store. We're up double digits, in high double digits, in all three of those away from home non-measured channels. That gives us a lot of confidence as we go forward. But I don't think that there is a need to prove it.

Speaker Change: Tumor where they're shopping we've had great retailer take rate in all retail in foodservice and in C store were up double digits in high double digits in all three of those away from home non measured channels that gives us a lot of confidence as we go forward, but I don't think that this is a niche.

Wendy Davidson: There is a need to make it accessible and available to the consumer. Okay, great. Thanks, guys. I'll hop back in the queue, and thank you.

Speaker Change: To prove it its a need to make it accessible and available to the consumer.

Speaker Change: Okay, great. Thanks, guys I'll hop back in the queue.

Speaker Change: Okay.

Barclays: Okay. Thank you. Our next question comes from the line of tangible bizarre with Barclays. Please proceed with your question.

Andrew Lazar: Our next question comes from the line of Andrew Lazar with Barclays. Please proceed with your question. Great. Good morning, everybody.

Tangible Bizarre: Great Good morning, everybody.

Wendy Davidson: Good morning. So Wendy, I guess, I'd love to get a better sense, or maybe I'm just not clear yet on sort of what changed or what you're seeing in the market that's leading you to want to accelerate some of these focus pillar actions and sort of what specific actions are really being accelerated. So, you know, are there certain parts of the business brands or categories where you're accelerating the sort of SKU rationalization? Well, remember, good morning, Andrew, but remember what we said on investor day that we would need to pay as we go.

Tangible Bizarre: Good morning.

Tangible Bizarre: So winter I guess I'd love to get a better sense or maybe I'm, just not clear yet on sort of what what changed or what you're seeing in the market. That's leading you to want to accelerate some of these focused pillar actions and sort of what specific actions are really being accelerated so are there certain parts of the business brands or categories, where you ask.

Tangible Bizarre: Celebrating the sort of SKU rationalization.

Speaker Change: Well remember well good morning, Andrew but remember what we said on Investor day that we would need to pay as we go so as we unlock fuel we would be able to lean into investments, but also some of the simplification work that we knew would be needed things like the war.

Wendy Davidson: So as we unlock fuel, we would be able to lean into investments, but also some of the simplification work that we knew would be needed. Things like the work that was done with Joya last year in international. We eliminated 50 percent of the SKUs in the Joya portfolio, and the brand grew double digits. So a harder working core assortment in the Joya brand; we're taking a similar approach across the entire portfolio where we have a tail of SKUs that are both adding complexity to our Indian supply chain and adding inventory, both in raw and pack and in finished, but it also adds maybe unproductive SKUs in the assortment for our retail partners.

Speaker Change: It was done with joy of last year and international we eliminated 50% of the Skus in the joy of portfolio and the brand grew double digits. So a harder working core assortment in the joy of brand, we're taking a similar approach across the entire portfolio, where we have a a tail of.

Speaker Change: Skus that are both adding complexity into our Indian supply chain. It as added inventory both in raw and packing and finished but it also adds maybe unproductive skus in the assortment for our retail partners. So but that obviously when you do that that kind of SKU rat at the top line.

Wendy Davidson: So, but obviously, when you do that, that kind of SKU rat, it's a top line drag and it can also be a bottom line drag. So we knew we were going to need to pace that a bit because we over delivered EBITDA in quarter one and quarter two. It puts us in a position to both invest in some of the brand building that we wanted to do, and it allows us to accelerate the addition of some of the organizational capabilities that we want to think of as headcount in revenue growth management and in a way from home on the commercial sales side of our business. But it also allows us to accelerate some of those simplification things in SKU and footprint that we may have planned in fiscal twenty five because we didn't think we'd be in a position to be able to do them. We are in a financial position to be able to do them in fiscal twenty four. So we're gonna pull those forward into quarter four.

Speaker Change: Drag and it can also be a bottomline drag. So we knew we were going to need to pace that a bit because we over delivered EBITDA in quarter, one and quarter two it puts us in a position to both invest behind some of the brand building that we wanted to do it allows us to accelerate the adding of some of the organizational capabilities that.

Speaker Change: We wont think head count and revenue growth management and in away from home on the commercial sales side of our business, but it also allows us to accelerate some of those simplification things in SKU and footprint that we may have planned in fiscal 'twenty five because we didn't think we'd be in a position to be able to do it we're in a.

Speaker Change: Financial position to be able to do it in fiscal 'twenty four so we're going to pull those forward into quarter four and so maybe I can just build upon that a little bit I mean, you know the other thing is we do distribute products into 75 markets as we simplify our focus.

Lee Boyce: So maybe I can just build upon that a little bit. I mean, you know, the other thing is that we do distribute products in 75 markets. As we simplify our focus, you know, it is on five key markets. So it is an opportunity for us as well, just to simplify where we've got physical assets. So that's come into account as well. Again, we will continue to distribute in kind of broader markets but really focus on five key markets. I got it.

Speaker Change: On five key markets. So it is an opportunity for us as well just to simplify where we've got physical assets.

So that's come into accounts as well again, we will continue to distribute into kind of broader markets, but really focus on five key markets.

Got it no. That's helpful. And then and then Lee just a follow up for you I think you said in your prepared remarks that for Q organic sales growth would be greater than what we see in <unk>.

Andrew Lazar: That's helpful. And then, Lee, just to follow up for you, I think you said in your prepared remarks that 4Q organic sales growth would be greater than what we saw in 3Q. And I'm just looking at it, and just like last year, right, the comparison in 3Q in terms of organic growth is far easier than in 4Q. So I'm just curious, what are some of the things maybe you can remind us that are still expected to dampen organic sales growth in the third quarter that would make the fourth quarter organic sales growth better? Thank you. Yeah, I mean, so a couple of things.

Speaker Change: And I'm just looking at it and just last year right. The comparison and three Q in terms of organic growth is far easier than in <unk>. So I'm. Just curious what are some of the things maybe you can remind us that are still expected to dampen your organic sales growth in the third quarter that would make the fourth quarter organic sales growth better.

Speaker Change: Thank you.

Speaker Change: Yeah, I mean, so the pulp.

Speaker Change: A couple of things I mean, we've obviously got the ramp up of our new product initiatives. That's part of it is also just the pacing of our investments. So you know, we're investing with stepping up investment in Q3.

Lee Boyce: I mean, obviously, we've got the ramp up of our new product initiative, but part of it is also just the pacing of our investments. So, you know, we're investing, we're stepping up investment in Q3, you know, and then that will kind of drive, and the focus is driving that sequential improvement in volume. So part of it is tied into kind of the pacing of our investments, you know, and just as kind of a reminder, overall, we said we'd have a pay-as-you-go model.

Speaker Change:

Speaker Change: And then that will kind of drive in the focus area and is driving that sequential improvement in volume. So part of it is tied into kind of the pacing of our investments and just as kind of as a reminder, overall, we said we'd have a pay as you go model. So you know with what we've delivered from an EBITDA perspective through the first half that's given us the.

Speaker Change: Our ability to then invest increase that investment in Q3, and then we'll see that starting you know really coming through into the fourth quarter.

Lee Boyce: So, you know, with what we've delivered from an EBITDA perspective through the first half, that's given us the ability to then invest, increase that investment in Q3, and then we'll see that starting, you know, really coming through in the fourth quarter. Well, and let me add to that, some of those distribution gains that we said that are coming certainly this month, think C Store and some of the away from home. It takes time, and even the flavor burst launch, it takes time for that to ramp up. So we assumed that we would fully realize some of that velocity in quarter four, but it takes some build time in quarter three. So you see some of that around the timing of those as well. Thanks so much.

Speaker Change: And let me add to that some of those distribution gains that we said that are coming in certainly in this months think C store and some of the away from home. It takes time and even flavor bursts launch it takes time for that to ramp up. So we've assumed that we would fully realize some of that velocity in quarter four but it take some <unk>.

Speaker Change: Build time in quarter three so you see some of that around the the timing of those as well right.

Speaker Change: Great. Thanks, so much.

Speaker Change: You bet.

Speaker Change: Thank you. Our next question comes from the line of Andrew Wolf with C. L. King. Please proceed with your question.

Andrew Wolf: Thank you good morning, I'm on the North American snacks business.

Wendy Davidson: Thank you very much. Have a great week. Thank you. Our next question comes from the line of Andrew Wolf with CL King. Please proceed with your question. Thank you. Good morning.

Andrew Wolf: Could you unpack for me.

Andrew Wolf: The changes in the velocity or just the total sales for garden veggie.

Andrew Wolf: In Tara.

Andrew Wolf: It seemed to go in the opposite direction sequentially.

John Baumgartner: On the North American snacks business. Can you unpack for me? You know, the changes in velocity are just the total sales for garden, veggie, and Tara. It seemed to go in the opposite direction sequentially, between, you know, distribution changes, and promotional case. So, you know, I'm trying to, like Tara, you know, like just observation, promoted pretty heavily, at least at Whole Foods. So I'm trying to get a sense. You know, is there a non-promotional aspect to this? off promotion previously.

Andrew Wolf: Between you know distribution changes.

Andrew Wolf: And promotional cadence.

Andrew Wolf: So you know I'm trying to like Tara you know like just observation when I saw it being promoted pretty heavily at least at whole foods.

Andrew Wolf: So I'm trying to get a sense of you know.

Andrew Wolf: What was your non promotion aspect to this versus off promotion previously and also you know with Terra.

Andrew Wolf: The garden Veggie Theres so much of it.

Andrew Wolf: So sold through.

Andrew Wolf: Or lethal appreciable amount sold through the club was there a change in any big change in the club distribution.

Wendy Davidson: And also, you know, with Tara, I mean, with garden veggie, there's so much you know, so sold through, or at least appreciable amounts sold through the club. Is there a change in any, a big change in the club? Yeah it well as we mentioned in actually in some of the guidance that we gave going into the fiscal year quarter one would have some very specific drags one of which would be tariff because we were making a decision to reduce the depth and frequency of large promotions particularly in the club channel on tariff and that was going to have a quarter one impact that allows us to have a much more stable distribution but also promotional activity and I would say you know and I mentioned earlier we've seen unit volume growth as well as dollar growth in tariff in quarter two and in the latest four weeks we've seen double digit dollar growth as well as our promotion our our our sales on promotion are about flat to where they've been so we've stabilized the promotion frequency and depth to be right sized I would say for Tara and we can build from their garden veggies a bit different less so in channel mix but much more around the promotional depth in quarter two we we didn't pace the same promotions that timing that we did a year ago so some of that you see as a year-on-year drag going into quarter three strong distribution gains on garden veggie both in measured and non-measured but what we're most excited about obviously is innovation news coming in garden veggie that actually creates overall brand news for the entire franchise of garden veggie so gives us confidence as we go into the back half but what you saw in the front half is a little bit of some of the cleanup in our revenue growth management initiatives impacting both timing and depth of volume that's just a timing issue year-on-year. Okay, Wendy, thank you, that's very clarifying. And just the follow-up is also... Actually, with the veggie burst. Um, It sounds like the acceptance was strong, did it, you know, was the acceptance what you expected or was it actually a little better?

Speaker Change: Yeah, well as we mentioned and actually in some of the guidance that we gave going into the fiscal year quarter. One would have some very specific drags one of which would be terra because we were making a decision to reduce the depth and frequency of large promotions.

Speaker Change: Particularly in the club channel on Terror and that was gonna have a quarter one impact that allows us to have a much more stable distribution, but also promotional activity and and I would say you know what I mentioned earlier, we've seen unit volume growth as well as dollar growth in Tara.

Speaker Change: In quarter, two and in the latest four weeks, we've seen double digit dollar growth as well as our promotions are are our sales on promotion are about flat to where they've been so we've stabilized the promotion frequency and depth to be right sized I would say for Terra and we can build from there garden veggies a bit different.

Speaker Change: Less so in channel mix, but much more around the promotional depth in quarter. Two we didnt pace. The same promotions that timing that we did a year ago. So some of that you see is a year on year drag going into quarter three strong distribution gains on garden veggie both in Mezz.

Speaker Change: And non measured but what we're most excited about obviously is innovation news coming in garden Veggie that actually creates overall brand news for the entire franchise of garden Veggie. So it gives us confidence as we go into the back half, but what you saw in the front half is a little bit of some of the clean up in our revenue growth management.

It is impacting both timing and depth of volume, that's just a timing issue year on year.

Speaker Change: Okay. Wendy. Thank you that's very clarifying and then just the follow up is also.

Speaker Change: With the veggie bursts launch.

Speaker Change:

Speaker Change: It sounds like the acceptance was strong because it is you know what's the acceptance what you expected or was it actually a little better.

Speaker Change: If it was better did that affect your you know your marketing plan or was it pretty much spot on in your marketing plans assume just with.

Wendy Davidson: And if it was better, did that affect your, you know, your marketing plan, or was it pretty much spot on and your marketing plan's the same, just for the launch? Well, I would say, and I encourage you to order the product. You're going to love it. So once we tasted the product and saw the consumer research, we were very excited about it. To be honest, we expected it to have large retailer acceptance. But I would say we have almost 100% retailer acceptance across both Canada and the U.S. That gives us a lot of confidence as we go in. We've got a little bit more feature activity because of the strength of the launch. That's probably a bit more than we planned.

Speaker Change: With respect to the lunch.

Speaker Change: Well, I would say and and I encourage you to order the product you're going to love. It. So once we tasted the product and we saw the consumer research. We were very excited about it but to be honest, we expected to have large retailer acceptance, but I would say we are we have almost 100% retailer.

Speaker Change: It's across both Canada, and the U S that gives us a lot of confidence as we go in we've got a little bit more feature activity because of the strength of the launch that's probably a bit more than we planned. So what we did was as Lee said, we're leaning into the Omnichannel marketing activity and that actually has a ramping up.

Wendy Davidson: So what we did was, as Lee said, we're leaning into the omni-channel marketing activity. And that actually has us ramping up our investment in brand building in quarter three, which will be reflected as sort of the outlook that we have for the balance of the year because we want to make sure that we're appropriately supporting the innovation for a successful launch, both for our retail partners and for us. Okay, thank you, but, Thank you.

Speaker Change: Our investment in brand building in quarter, three which will be reflected as sort of the outlook that we have in the balance of the year, because we want to make sure that we're appropriately supporting the innovation for a successful launch both for our retail partners and for us.

Speaker Change: Okay. Thank you.

Speaker Change: But.

Speaker Change: Thank you. Our next question comes from the line of Ken Goldman with Jpmorgan Chase. Please proceed with your question.

Ken Goldman: Alright, Thank you with the understanding that the data that we get especially from some syndicated providers does not really tell the whole story on the hanes somebody.

Ken Goldman: Our next question comes from the line of Ken Goldman with J.P. Morgan Chase. Do you foresee what your question is? Hi, thank you.

Ken Goldman: Numbers, we're looking at would suggest perhaps that the lifts that.

Wendy Davidson: With the understanding that the data that we get, especially from some syndicated providers, does not really tell the whole story on Hain. Some of the numbers we're looking at would suggest perhaps that the lifts that Hain is getting on some of its promotions may not be quite as strong as the company had hoped. I was just curious if you could comment on that. Is that valid? And if not, you know, I'd love to hear it.

Ken Goldman: Hain is getting on some of its promotions you know it may not be quite as strong as the company that holds I was just curious if you could comment on that is that valid and if not you know what.

Ken Goldman: I'd love to hear it and B. If it is valid you know can you talk a little bit more about the decision to kind of invest more in the business understanding also that not all of those investments are of the promotion type of course.

Speaker Change: Yeah, Good morning, Ken and that's a great question and we're seeing the same data that you're saying in measured channels and I would say it depends on the brand.

Wendy Davidson: And B, if it is valid, you know, could you talk a little bit more about the decision to kind of invest more in the business, understanding also that not all those investments are of the promotion type? Yeah, good morning, Ken. And that's a great question. And We're seeing the same data that you're seeing in the measured channels. And I would say, and this depends on the brand, Terra has a very effective response to promotional activity. And that is allowing us to more effectively invest our trade behind Terra, both on features and merchandising, as well as discounting of promotions that actually gets lift. So I feel very good about the plans that the team has for Terra and the response to that. Garden Veggie is a bit different.

Terra has a very effective response to promotional activity and that is allowing us to more effectively invest our trade behind Tara both on feature and merchandising as well as discounting promotions that actually gets lift so feel very good about the plans that the team have on <unk>.

Speaker Change: Tara in the response to that garden veggies, a bit different and what we're finding is that the frequency of our promotions is more important than the depth of those promotions and having feature activity both in our snack portfolio in the U K and feature activity in the U S are really important in the snack category.

Wendy Davidson: And what we're finding is that the frequency of our promotions is more important than the depth of those promotions, and having featured activity, both in our SNAC portfolio in the UK and in the US, is really important in the SNAC category. So, as a part of our revenue growth management initiatives, the team is now using some really good data analytics to evaluate trade effectiveness, make those adjustments, and then move forward. I feel better now because of those analytics that will allow us to increase the spend in the right way to move in the direction we need to, rather than a peanut butter approach across the trade. And that's what you'll see us reflecting as we go into the back half, leaning into some of those ROI effectiveness decisions rather than just throwing more dollars at it. Great, thank you. I'll pass it on.

Speaker Change: So as a part of our revenue growth management initiatives. The team is now using some really good data analytics to evaluate trade effectiveness to make those adjustments and then move forward I feel better now because of those analytics that will allow us to increase the spend in the right way to move.

Speaker Change: In the direction, we need to rather than a peanut butter approach across the trade and that's what you'll see us reflecting as we go into the back half is leaning into some of those are why our effectiveness.

Speaker Change: <unk>, rather than just leaning more dollars.

Speaker Change: Great. Thank you I'll pass it on.

Speaker Change: But.

Speaker Change: Thank you. Our next question comes from the line of Michael.

Michael: Piper Sandler. Please proceed with your question.

Michael: Thank you and good morning.

Michael: Good morning.

Michael: Just wanted to come back to some of the channel expansion and.

Wendy Davidson: But. Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Chief Receiver, what's your question? Thank you and good morning. Good morning.

Could you put the 10000, new C stores in context I guess.

Michael: Is that.

Michael: Just the low hanging fruit and you feel like there's some more wood to chop is it have you kind of look.

Michael Scott Lavery: Just wanted to come back to some of the channel expansion, and could you put the 10,000 new C-Stores in context? That, you know, is just the low-hanging fruit, and you feel like there's, you know, some more wood to chop. Have you kind of made the rounds?

Michael: Made the rounds and and that's likely you know kind of the.

Michael: So the upside how do you think about what the runway looks like there and then.

Michael: Touched on foodservice opportunities in the past maybe can you give an update of how that might be progressing as well.

Wendy Davidson: And that's likely, you know, kind of the extent of the upside. How do you think about what the runway looks like there? And then you've touched on food service opportunities in the past. Maybe you could give an update on how that might be progressing as well? Yeah, absolutely.

Speaker Change: Yeah absolutely.

Speaker Change: As we said on Investor day, and before one of the reasons why we are very bullish on away from home in non measured channels, especially for brands like ours is we know that they are beloved by the consumer but they're not available on that on the consumer sort of everyday shopping journey, it's making them more available and accessible so put.

Wendy Davidson: Well, as we said on Investor Day and before, one of the reasons why we are very bullish on away from home and non-measured channels, especially for brands like ours, is that we know that they're beloved by the consumer, but they're not available on that in the consumer's sort of everyday shopping journey. It's making them more available and accessible. So putting them within the arm's reach of the consumer, to put it in numbers, there are about 160,000 C stores. So putting them into 10,000 C stores is a good move for us. But it's a starting move for us.

Speaker Change: Them in within arm's reach of the consumer.

Speaker Change: To put it in and numbers, there's about 160000 C stores, so putting it into 10000 and C stores is a good move for us, but it's a starting move for us.

Speaker Change: In a retail environment, there's about 28000 points of distribution for retail for foodservice Theres about 2 million points of distribution. The dollars per point of distribution might be smaller, but they are then mentally available to the consumer there they're building the brand because you see them everywhere you're going.

Wendy Davidson: In a retail environment, there are about 28,000 points of distribution for retail. For food service, there are about 2 million points of distribution. The dollars per point of distribution might be smaller, but they are mentally available to the consumer. They're building the brand because you see them everywhere you go.

Speaker Change: That's our goal is both to have it available when the consumer is in a big retail environment, but also the habit more aware as they're moving throughout their day throughout their week. So C stores is a growth vehicle, we're seeing great growth double digit growth in the U K as well as double digit growth in the U S up 18.

Wendy Davidson: That's our goal, both to have it available when the consumer is in a big retail environment but also to have it more aware as they're moving throughout their day, throughout their week. So, C-Stores is a growth vehicle. We're seeing great growth, double-digit growth in the U.K., as well as double-digit growth in the U.S., up 18% in snacks in the U.S. alone in quarter two. In food service, we're up high double-digits as we get some placements of brands like Garden of Eaten with commercial restaurant chains. We're getting some of our yogurt products and some of our Celestial Seasonings tea placed where they're on the consumer's moving throughout their day journey. So, we feel really, really good that we're getting early momentum in our away-from-home effort.

Speaker Change: 8% in snacks in the U S alone in quarter two in food service were up high double digits as we're getting some placements of brands like garden of Eatin with commercial restaurant chains were getting some of our yogurt products in some of our celestial seasonings tea place, where they're on the consumers sort of moving throughout their day.

Speaker Change: Journey, So we feel really really good that we're getting early momentum in our away from home effort.

Speaker Change: Oh no that's helpful.

Speaker Change: Just a follow up on some of the the second half moving parts on the top line.

Speaker Change: Can you give us sense for.

Speaker Change: For the the SKU cuts or or some of it you got a.

You know geographic rationalization.

Michael Scott Lavery: No, that's helpful, and just to follow up on some of the second half moving parts on the top line, can you give a sense for the SKU cuts or some of the geographic rationalization, just what either the timing or magnitude of that might look like? And similar for the Flavor Burst launch, just when we think about modeling in some of the pipeline and fill, and just to help us capture those pieces. Yeah, so I'm probably not breaking out all the pieces specifically, but if you just think about kind of the adjustments that we made, we said, for example, for the original guidance we gave, there was a percentage point pulldown due to FX. So that's one piece; then, you know, the other pieces in there, obviously, the kind of the focus initiatives. As those are broken out, you know, and I would say there is kind of a bit of a third element in there, you know, we did see some.

Speaker Change: Just would be either the timing or magnitude of that might look like and similar for the flavor bursts launch just when we think about modeling in some of the pipeline fill and just to help us capture those pieces.

Speaker Change: Yeah.

Speaker Change: Yeah. So you know.

Speaker Change: Probably you're not breaking out all of those pieces, specifically, but if you just think about kind of the adjustments that we made.

Speaker Change: We said for example, also the original guidance. We gave there was a percentage point I'll pull down due to FX. So that that's one piece then you know the.

Speaker Change: The other pieces in there obviously, the kind of the focus initiatives.

Speaker Change:

Speaker Change: It is those are broken out you know and I would say there is a kind of a bit of a third element in there is you know we did see some.

Lee Boyce: Can a year-to-day performance, you know, deleveraging a little bit on some of the volume. So, you know, I don't think we're going to break out the pieces specifically, but, you know, you've got a percentage point, and then you can see, you know, the focus initiatives and the pull forward are the other kind of key element. And in terms of timing, which I think was your question, we will see a ramp-up in Flavor Burst in quarter three and really hit stride as we get into quarter four.

Speaker Change: Kind of year to date.

Speaker Change: Our performance deleveraging a little bit on some of the volume so.

Speaker Change: You know I don't think we're going to break out those pieces, specifically, but you know you got a percentage point and then you can see.

Speaker Change: The focus initiatives and the pull forward is the out the kind of the key element of that and if you saw it in terms of timing I think was your question, we will see ramp up in flavor burst in quarter, three and really hit stride as we get into quarter four.

Wendy Davidson: On the simplification initiatives, I think you will see the majority of that hitting in quarter four. And, you know, as Lee said, if you looked at our original guidance of two to four, you find out a point of that that we pulled back is from effects. That's different than what we originally planned. And I'd call it a point or two around the simplification initiatives is about how you would look at that.

Speaker Change: On the simplification initiatives I think you will see the majority of that hitting in quarter four.

Speaker Change: And you know it as Lee said, if you looked at our original guidance of two to four you can figure out a point of that that we pulled back is from FX that's different than what we originally planned and I'd call. It a point or two around the simplification.

Speaker Change: It's about how you'd look at that I hope that helps.

Michael Scott Lavery: I hope that helps. That's really helpful, yes. Thank you. Thank you.

Speaker Change: That's really helpful. Yes. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Matt Smith with Stifel. Please proceed with your question.

Matthew Edward Smith: Our next question comes from the line of Matt Smith with Stifel. Please proceed with your question. Hi, good morning.

Matthew Edward Smith: Hi, Good morning wondering I wanted to ask a follow up to your previous response about the impact from the focused pillar actions the rationalization of eschew using channels.

Wendy Davidson: Wendy, I wanted to follow up to your previous response about the impact of the focus pillar actions, the rationalization of SKUs and channels. You were talking about the predominance of the One point reduction of top-line guidance beyond the FX adjustment is being tied to those focus initiatives and those being concentrated in the fourth quarter. So should we think of that as a mid-single-digit headwind to revenue growth as we look out into fiscal 25 as you annualize the fourth quarter impact into next year? And should we think about SKU rationalization then hitting a normal cadence, or should there be incremental focus pillar actions in fiscal 25 as well? Yeah, I wouldn't look at it that way.

Matthew Edward Smith: You were talking about the predominance of the.

Matthew Edward Smith: One point in reduction of topline guidance beyond the FX adjustment as being tied to those focused initiatives and those being constrained in the fourth quarter. So should we think of that as it is a mid single digit headwind to revenue growth as we look out into fiscal 'twenty five as you annualize the fourth quarter impact into next year.

Matthew Edward Smith: And.

Matthew Edward Smith: Should we think about that SKU rationalization than hitting our normal cadence there should there be incremental focus pillar actions in fiscal 'twenty five as well.

Matthew Edward Smith: Yeah.

Speaker Change: Look at it that way, we will feel it more discreetly in quarter four but it won't continue to carry out into fiscal 'twenty. By these are things that we had actually built in and layered into Hain re imagined and if you recall on Investor Day, We said that as we generated fuel we would throttle forward.

Wendy Davidson: We will feel it more discreetly in quarter four, but it won't continue to carry out into fiscal 25. These are things that we have actually built in and layered into Hain Reimagined. And if you recall on Investor Day, we said that as we generated fuel, we would throttle forward and back because we'd be in a position to do so. As we saw the effectiveness of brand building, we would also throttle forward and back. This is allowing us to just pull forward some of the things around. Think of cleaning up inventory, stranded inventory of raw and packed SKUs that no longer need to exist in the portfolio, getting rid of some inventory, and finished goods in some of the SKU RATs. It's working it through the trade. At the same time, we would expect, similar to what we saw in JOIA, that harder working core to grow better. So it shouldn't be a straight one for one that carries on into the next year. It's something you'll feel discreetly in the quarter.

Speaker Change: And back because we'd be in a position to be able to do so as we saw the effectiveness of brand building. We would also throttle forward and back this is allowing us to just pull forward. Some of the things around think of cleaning up inventory stranded inventory abron pack of skus that no longer need to exist in the portfolio.

Speaker Change: So getting rid of some inventory finished goods in some of the SKU rat is working it through the trade at the same time, we would expect similar to what we saw enjoy that harder working core to grow better. So it shouldn't be a straight one for one that carries on into the next.

Speaker Change: Year is something you'll feel discreetly in the quarter and then you've got a better working core as we go into fiscal 'twenty five.

Matthew Edward Smith: And then you've got a better working core as we go into fiscal 25. I think, sorry, just to build on that, I mean, I think that is a key point, just as a reminder about the algorithm overall, that was presenting Hain Reimagining with 3% plus, but to Wendy's point, you know, part of that is streamlining with this winning portfolio. So, you know, as you make some of these skew rationalizations, it will flow back to some of our existing products. Great, thank you very much. I appreciate the detail, and I'll pass it on.

Detroit: Detroit just to build on that I mean, I think that is it is a key point just as a reminder, on the algorithm oval rule.

Detroit: That was presenting Hayden re imagined it was 3% plus but to Wendy's point you know part of that is streamlining with this winning portfolio. So you know as you make some of these SKU rationalizations that will be flowed back to some of our existing products.

Speaker Change: Great. Thank you very much I appreciate the detail on them pass it on.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: If anyone has any questions you May press star one on your telephone keypad to join the question and answer queue with one question and one follow up.

John Baumgartner: Thanks. Thank you. And as a reminder, if anyone has any questions, you may press star one on your telephone keypad to join the question and answer queue with one question and one follow-up. Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question. Good morning, thanks for the question. Good morning, Wendy. I... Good morning.

Speaker Change: Our next question comes from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.

John Baumgartner: Good morning, Thanks for the question.

John Baumgartner: But Martin Wendy.

John Baumgartner: Hi, Good morning, I wanted to come back to your comments in the prepared remarks about headwinds in the macro environment.

John Baumgartner: And you know I think historically hain typically leaned on the notion that the portfolio skews the higher income households, so it gets more insulated from the macro is something changing in the environment either with more discretion. Among higher income household or are you seem to be less trade up from mainstream consumers, even I'm just trying to better understand the context on the impact of these macro hedge.

Wendy Davidson: I wanted to come back to your comments in the prepared remarks about headwinds in the macro environment. And, you know, I think historically Hain typically leaned on a notion that the portfolio skews to higher-income households, so it's more insulated from macro. Is something changing in the environment, either with more discretion among higher income households, or are you seeing maybe less trade-up from mainstream consumers even? I'm just trying to better understand the context and the impact of these macro headwinds for you. Yeah, that's a great question.

John Baumgartner: One for you.

Speaker Change: Yeah, that's a great question.

Speaker Change: If you would have recalled maybe a year ago. When I first joined we were talking about the historically you would've expected that natural and organic as a category tended to outpaced conventional all of that flipped upside down during COVID-19 when people gravitated back to.

Wendy Davidson: If you would have recalled, maybe a year ago, when I first joined, we were talking about the historical expectation that natural and organic, as a category, tended to outpace conventional. All of that flipped upside down during COVID, when people gravitated back to conventional products, and in some cases, supply chains made conventional more readily accessible. We were waiting to see that consumer behavior really revert back to expectation.

Speaker Change: <unk> products and in some cases supply change made conventional more readily accessible.

Speaker Change: We we were waiting to see that consumer behavior really revert back to expectation really please you'd see this and this or kind of data that we're beginning to see I think in the middle of last year calendar year, we started to see the consumer revert back to historical behaviors, but what changed was they still wanted natural.

Wendy Davidson: Really pleased, you'd see this in the circana data, that we're beginning to see, I think, in the middle of last year, calendar year, we started to see the consumer revert back to historical behaviors. But what changed was that they still wanted natural and organic products, but they wanted them available in more places. So, they're not just going to specialty retail anymore; they're going to food and mass, and away from home. That's a great opportunity for Hain.

Speaker Change: Organic products, but they want them available in more places so they're not just going to specialty retail anymore, they're going to food and mass and away from home. That's a great opportunity for Hain, but we also have been evaluating the move from brand to private label happy to say in the U S market, we don't see that.

Speaker Change: Europe is a different story, we've seen the consumer much more impacted economically in Europe, and that's affected consumer behavior. Both in number of shopping trips, but also the size of the basket. We've also seen private label recover faster in our international business in the industry than the brand.

Wendy Davidson: But we also have been evaluating the move from brand to private label. Happy to say, in the U.S. market, we don't see that. Europe is a different story.

Wendy Davidson: We've seen the consumer much more economically impacted in Europe, and that's affected consumer behavior, both in the number of shopping trips but also the size of the basket. We've also seen private label recover faster in our international business, in the industry, than the brand. That benefits Hain because we are actually both a private label and a brand, and we're seeing the recovery in our private label business faster than our branded business, but still outpacing category. That's why you see such strength in the international business, while North America is beginning to recover.

Speaker Change: That benefit pain, because we actually are both private label and brand and we're seeing the recovery in our private label business faster than our branded business, but still outpacing category. That's why you see such strength in the international business, While North America is beginning to recover and it it actually I think is a great example of the value of our.

Speaker Change: Traffic diversification in our business because it gives us a geographic hedge as the consumer behavior start to normalize.

Speaker Change: So I mean, if I build on that and look at your salty snacks business in the U S. I can appreciate the shift from promotional timing and innovation, you're ramping up I mean baseline volumes have been down for the portfolio. Since like mid 2022 is this building on those comments is this a situation where some of that baseline volume consumption is gone.

John Baumgartner: It actually is a great example of the value of our geographic diversification in our business because it gives us a geographic hedge as consumer behaviors start to normalize. So, I mean, if I build on that and look at your Salty Snacks business in the U.S., you know, I can appreciate the shift from promotional timing and the innovation you're ramping now, but I mean, baseline volumes have been down for the portfolio since like, you know, mid-2022. Building on those comments, is this a situation where some of that baseline volume consumption has gone from Nielsen channels to non-measured, and that sort of explains, I guess, the absence of more prominent velocity growth and baseline volumes in the portfolio? Or is there something else in Salty Snacks, in addition to innovation and promotion, that needs to be tweaked to get better, you know, same-store sales in Nielsen data?

Speaker Change: From Nielsen channels into non measured and that sort of explains the absence of more prominent velocity road and baseline of volumes in the portfolio or is there something else in salty snacks. In addition to innovation or promo that needs to be tweaked to get better same store sales in the Nielsen data.

Speaker Change: Yeah, I would tell you that if I look back at the early observations when I joined the company and what really led to some of our focus around Hain re imagined. One is that you actually we need to have a harder working core we need to have an always on support around our brands we need to.

Speaker Change: Sure that we've got the right products on shelf and available where the consumer is shopping and when you add really meaningful innovation that we support both at launch, but we continuously support what's different now than I think what you would've seen in 2022 some of the challenges we're financially the company wasn't in a position.

Wendy Davidson: Yeah, I would tell you that if I look back at the early observations when I joined the company and what really led to some of our focus around Hain Reimagined, one is that we actually need to have a harder working core. We need to have an always-on support around our brands. We need to make sure that we've got the right products on the shelf and available where the consumer is shopping, and we need to have really meaningful innovation that we support both at launch and we continuously support. What's different now than I think you would have seen in 2022, some of the challenges were financial; the company wasn't in a position to continuously support marketing and trade. We also had some significant supply chain disruption during that year, which pulled back a lot of promotional activity, and it also had our fill rates in the trade really below average.

Speaker Change: To continuously support with marketing and trade. We also had some significant supply chain disruption during that year, which pulled back a lot of promotional activity and it also had our fill rates to the trade really below average I'm really pleased to say that our fill rates and on shelf availability in snacks is in.

Speaker Change: Top tier and has been for the last 12 months, we are in an always on promotional support and marketing support behind the brands, but we've invested in really good consumer and category insights to make sure that our campaigns are meaningful our price pack architecture is accurate and then our.

Speaker Change: <unk> is meaningful to take to the marketplace. So I think what you're what you should see from us is.

Speaker Change: I think natural organic products the consumers once those products and they love our brands, we are putting ourselves in position to be better able to run the portfolio and to drive the right kind of growth not just episodic growth quarter on quarter, but it has some good momentum and as.

Wendy Davidson: I'm really pleased to say that our fill rates and on-shelf availability in snacks are in the top tier and have been for the last 12 months. We are in an always-on promotional support and marketing support behind the brands, but we've invested in really good consumer and category insights to make sure that our campaigns are meaningful, our price pack architecture is accurate, and that our innovation is meaningful to take to the marketplace. I think what you should see from us is that I think natural, organic products. Consumers want those products, and they love our brands.

Speaker Change: As I mentioned earlier, we're seeing actually really good dollar growth in garden veggie in the latest four weeks in measured channels. If you add in non measured it it's even better Terra chips is actually really improved especially in the latest four weeks, but we had unit movement in quarter. Two so I feel good about the snacks.

Wendy Davidson: We are putting ourselves in position to be better able to run the portfolio and to drive the right kind of growth, not just episodic growth quarter on quarter but to have some good momentum. And as I mentioned earlier, we're seeing really good dollar growth in garden veggie in the last four weeks in measured channels. If you add in non-measured, it's even better.

Speaker Change: Recovery and pivot to growth, but you would have seen a lot of historical noise in that.

Speaker Change: Thank you Wendy.

Wendy Davidson: You bet.

Wendy Davidson: Thank you. Our next question comes from the line, though Jon Andersen with William Blair. Please proceed with your question.

Jon Andersen: Well, thank you and good morning, everybody two quick ones.

Jon Andersen: Tough discussion, but what you so about the snacks business.

Wendy Davidson: Terra Chips has actually really improved, especially in the last four weeks, but we had unit movement in quarter two. So I feel good about the snack recovery and pivot to growth, but you would have seen a lot of historical noise in that. Thank you, Wendy. You bet. Thank you.

Jon Andersen: I'm wondering if you could talk a little bit about a couple of the other focus areas, our baby and kids and beverages, whether that'd be a second half recovery, but maybe.

Jon Andersen: Maybe whether you're performing a shortage.

Jon Andersen: Referred to in the prepared comments more broadly your own perhaps innovation and channel expansion. Some good demand driving initiatives that are part of the team re imagined and then second on gross margin for the year or it could provide an updated outlook for 50 to 100 basis points of improvement could you remind us you've got a little.

John Baumgartner: Please proceed with your question. Thank you. Good morning, everybody.

Wendy Davidson: Two quick ones. There's been a ton of discussion, rightly so, about the snack business. I'm wondering if you could talk a little bit about a couple of the other focus areas, baby and kids, and beverages, whether that be second half recovery, but maybe the remedy for the formula shortage, which you referred to in the prepared comments, more broadly around perhaps innovation and channel expansion, some of the demand-driven initiatives that are part of Hain Reimagined. And then second, on gross margin for the year, I think you provided an updated Could you remind us, is that a little, I think, a little less than what you previously anticipated and what some of the puts and takes around that change are? Thank you.

Jon Andersen: I think a little less than what you previously anticipated and what some of the puts and takes a roadmap change or thank you.

Speaker Change: Yeah, I'll I'll cover the categories and then flip it over to Lee from a category standpoint, as you mentioned so our snacks category was off call. It mid single digits in quarter, two total company and that was really tracing to some of this move and promotional activity.

Lee Boyer: I feel very confident as we go into the back half of the year because of what we're seeing in the latest four weeks. The baby category was off double digits in total for the organization. If you take out Formula The Baby Kids category was actually in growth, but formula was a significant drag we have secured supply as well as anchor.

Lee Boyce: Yeah, I'll cover the categories and then flip it over to Lee. From a category standpoint, as you mentioned, our snacks category was off, call it mid-single digits in quarter two total company, and that was really due to some of this move in promotional activity. I feel very confident as we go into the back half of the year because of what we're seeing in the last four weeks. The baby category was off double digits in total for the organization.

Lee Boyer: <unk> supply partners to ensure our availability to have that product in the back half. It will result in double digit growth year on year in the back half of the year in the Formula part of Baby Kids and get that entire category back to growth. The beverage category was up high single digits between both North America and international.

Lee Boyer: International was led by non dairy beverage, that's actually a great category for us to be in and we're a leader in both private label and brand with a really powerful portfolio. There that continues to perform you would've heard us talk a year ago about some of the capacity utilization in our plants all of that has been addressed and we're running our <unk>.

Wendy Davidson: If you take out formula, the baby kids category was actually in growth, but formula was a significant drag. We have secured supply as well as incremental supply partners to ensure our availability to have that product in the back half. It will result in double-digit growth year on year in the back half of the year in the formula part of baby kids and get that entire category back to growth. The beverage category was up high single digits between both North America and international. International was led by non-dairy beverage.

Lee Boyer: Solid operations five days, a week really good capacity utilization with the ability to support our customers and a much more diversified customer contract base.

Lee Boyer: Prep was up high single digits across both markets in North America led by spectrum in our nut butters in our soups and in international by soups as well as jams and jellies. So that's a portfolio that continues to deliver and in personal care was actually up almost 2% year on year as a total category and that was led.

Wendy Davidson: That's actually a great category for us to be in, and we're a leader in both private label and brand with a really powerful portfolio there that continues to perform. You would have heard us talk a year ago about some of the capacity utilization in our plants. All of that has been addressed, and we're running a solid operation five days a week, really good capacity utilization with the ability to support our customers, and a much more diversified customer contract base. Meal prep was up high single digits across both markets in North America, led by Spectrum and our nut butters and our soups, and in international, by soups as well as jams and jellies.

Lee Boyer: By both by Alba Avalon Organics, and then live clean which is a leading brand in Canada. So we're seeing really good bright spots at a category level I feel good that we know what's driving both snacks and baby kids and those are short term acute that we see improving trends as we've started quarter three that give us.

Lee Boyer: <unk> in the back half.

Speaker Change: Yeah. So just you know answering your question on margin.

Speaker Change: We are seeing good margin improvement, but as you point out we had previously indicated 100 to 200 basis points. You know we've now refined that's a 50 to 100. So a couple of elements that we are seeing some.

Speaker Change: Plant costs deleveraging on the lower volumes versus our initial expectations you know I'd say on the on the flip side again, we are and we've talked about this a number of times, we are seeing sequential improvements driven by a hain re imagined initiatives, but again.

Wendy Davidson: That's a portfolio that continues to deliver. Personal care was actually up almost 2% year on year as a total category, and that was led by Alba, Avalon Organics, and then Live Clean, which is a leading brand in Canada. So we're seeing really good bright spots at a category level. I feel good that we know what's driving both snacks and baby kids, and those are short-term acute trends that we see improving trends as we've started quarter three that give us confidence in the back half. Lee?

Speaker Change: Lower than our initial expectations.

Speaker Change: The second element is really some of the mixed impact that we've seen in a Prime example.

Speaker Change: Example of that is formula.

Speaker Change: You know, we originally thought formula would only impact Q1, but he did also bleed into Q2, we have secured supply in the second half, but again you know the full year is not in line with our initial expectations.

Lee Boyce: Yeah, so just, you know, answering your question on margin, we are seeing good margin improvement. But as you point out, we had previously indicated 100 to 200 basis points. We've now refined that to 50 to 100. So a couple of elements there.

Speaker Change: I think more kind of on the positive side, we are seeing the benefits of pricing come through and focused at G. M initiatives. You know when you talk to it to a number though so those are driving you know strategic pricing opportunities.

Lee Boyce: You know, we are seeing some plant cost leveraging on the lower volumes versus our initial expectations. But, on the flip side, again, we are, and we've talked about this a number of times, we are seeing sequential improvements driven by Hain reimagined initiatives, but again, a bit lower than our initial expectations. I'd say the second element is really some of the mixed impact that we've seen, and a prime example of that is the formula.

Speaker Change: Overall, our productivity pipeline is delivering and then I'd just say the third thing and it does tighten a bit with our G. M. As well as you know we continue to evolve our trade strategy. So.

Speaker Change: So we are seeing a step up in the rois versus history, but again you know that.

Speaker Change: Kind of what has changed is as we've looked and within this current year. As you know is kind of just the expectations on the volume and in some of the mix, we will see that improve as we move forward.

Lee Boyce: We originally thought formula would only impact Q1, but it did also bleed into Q2. We have secured supply in the second half, but again, the full year is not in line with our initial expectations. I think, more kind of on the positive side, we are seeing the benefits of pricing come through and the focused RGM initiatives when you talk to a number of those. So those are driving strategic pricing opportunities. Overall, also our productivity pipeline is delivering. And then I'd just say the third thing, which does tie in a bit with RGM as well, is that we continue to evolve our trade strategy. So we are seeing a step up in ROI versus history.

Speaker Change: Again, as we make these investments and we get that sequential improvement in the top line.

Speaker Change: Thanks, so much.

Speaker Change: You bet.

Speaker Change: Thank you and our next question comes from the line of Anthony Vendetti with Maxim Group.

Anthony Vendetti: Proceed with your question.

Anthony Vendetti: Thank you yeah. Most of the questions. Most of my questions have been answered, but I guess other than.

Anthony Vendetti: Supply chain concerns or issues with with baby Formula are there any other.

Anthony Vendetti: Brands are skus that are dragging down just overall organic.

Anthony Vendetti: Organic growth and if so are any of those brands.

Lee Boyce: But again, what has changed as we've looked and within this current year is just the expectations for the volume and then some of the mix. We will see that improve as we move forward, and again, as we make these investments and we get that sequential improvement in the top line. Thanks so much.

Anthony Vendetti: Or skus being.

Anthony Vendetti: Are you considering jettison.

Anthony Vendetti: Them or or or or shutting those down or selling knows at this point or are there.

Anthony Vendetti: Are you still in the evaluation stage four for some of those other brands that are maybe dragging down growth.

Speaker Change: Yeah. Thank you I appreciate the question Yeah, we feel very good about the five categories of focus and a five geographies what I would say is as Lee mentioned earlier in the five geographies, we want to make sure that that's where we're focusing our most efficient assets and footprints will still distribute beyond those five.

John Baumgartner: You bet. Thank you. And our next question comes from the line of Anthony Vendetti with Maxim Group. Please proceed with your question. Thank you. Yeah, most of my questions have been answered, but I guess other than supply chain concerns or issues with baby formula, are there any other brands or SKUs that are dragging down just overall organic growth? And if so, are any of those brands or SKUs being, you know, are you considering elimination?

Speaker Change: But we really want to streamline where we've got a physical footprint into five categories. We feel very good about the categories. We're in that they are repertoire categories for the consumer where they're looking for better for you brands and products to support healthier living but it does mean that there's opportunities for us to ensure that we've got.

Anthony Vendetti: them or shutting those down or selling those at this point? Or are you still in the evaluation stage for some of those other brands that are maybe dragging down growth? Yeah, thank you.

Speaker Change: The hardest working portfolio in those five categories. So we will continuously be looking at them right Skus right assortment right brand support that's going to deliver on that company promise and it should be a regular part of portfolio hygiene in our business and then we should be running and drive.

Wendy Davidson: I appreciate the question. You know, we feel very good about the five categories of focus and the five geographies. What I would say is, as Lee mentioned earlier, in the five geographies, we want to make sure that that's where we are focusing our most efficient assets and footprints. We'll still distribute beyond those five, but we really want to streamline where we've got a physical footprint. In the five categories, we feel very good about the categories we're in, that they are repertoire categories for the consumer, where they're looking for better-for-you brands and products to support healthier living.

Speaker Change: Growth across the portfolio.

Speaker Change: Okay, great. Thank you so much.

Speaker Change: Okay.

Speaker Change: Thank you we have reached the end of the question and answer session I'll now turn the call back over to CEO, Wendy Davidson for closing remarks.

Wendy Davidson: Yeah, I really appreciate everybody joining us today, we are pleased as we said with the progress that we're making in this foundational year of our strategy and the sequential improvement we feel really good about the momentum that we have going into the back half and the fuel that we generated in the front half to enable us.

Anthony Vendetti: But it does mean that there are opportunities for us to ensure that we've got the hardest-working portfolio in those five categories. So we will continuously be looking at the right SKUs, the right assortment, and the right brand support that's going to deliver on that company promise. And it should be a regular part of portfolio hygiene in our business. And then we should be running and driving growth across the portfolio. Okay, great.

Wendy Davidson: To be able to pull forward some of our initiatives as we go into the back half of the year quarter, two demonstrated sequential improvement and that's what we were looking for were excited to pivot to growth in the back half and again I want to thank everybody for joining us, but also thank our hain team for their passion and commitment.

Anthony Vendetti: Thank you so much. But then again, we have reached the end of the question and answer session. I'll now turn the call back over to CEO Wendy Davidson for a closed question. Yeah, I really appreciate everybody joining us today. We are pleased, as we said, with the progress that we're making in this foundational year of our strategy and the sequential improvement. We feel really good about the momentum that we have going into the back half and the fuel that we've generated in the front half to enable us to be able to pull forward some of our initiatives as we go into the back half of the year. Quarter 2 demonstrated sequential improvement, and that's what we were looking for. We're excited to pivot to growth in the back half. And again, I want to thank everybody for joining us, but also thank our Hain team for their passion and commitment. And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021

Speaker Change: And this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: Okay.

Speaker Change: [music].