Q2 2024 TreeHouse Foods Inc Earnings Call

Operator: Welcome to the TreeHouse Foods second quarter 2024 conference call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please note that this event is being recorded. At this time, I would like to turn the call over to Matt Siler of TreeHouse Foods for the reading of the Safe Harbor Statement.

Unknown Executive: Welcome to the TreeHouse Foods second quarter, 2024 conference call. All participants will be in listen-only mode.

Welcome to the Treehouse Foods second quarter 'twenty 'twenty four conference call all participants will be in listen only mode. After today's presentation. There will be an opportunity to ask question to ask a question simply press star followed by the number one on your telephone keypad, if you would.

Unknown Executive: After today's presentation, there will be an opportunity to ask questions. To ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

To withdraw your question Press Star one again. Please note that this event is being recorded.

Unknown Executive: Please note that this event is being recorded.

Matt Filer: At this time, I would like to turn the call over to Matt Filer of TreeHouse Foods for the reading of the Safe Harbor Statement. Good morning, and thank you for joining us today. Earlier this morning, we issued our second quarter earnings release and posted our earnings deck, both of which are available within the Investor Relations section of our website at treehousefoods.com.

At this time I would like to turn the call over to Matt Siler of Treehouse foods for the reading of the Safe Harbor statement.

Matthew Siler: Good morning, and thank you for joining us today. Earlier this morning, we issued our second quarter earnings release and posted our earnings deck, both of which are available in the Investor Relations section of our website at TreeHouseFoods.com. Before we begin, I would like to advise you that all forward-looking statements made on today's call are intended to fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and projections and involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements.

Matt Siler: Good morning, and thank you for joining us today earlier. This morning, we issued our second quarter earnings release and posted our earnings deck, both of which are available within the Investor Relations section of our website at Treehouse Foods dotcom.

Matt Filer: Before we begin, I would like to advise you that all forward-looking statements made on today's call are intended to fall within the Safe Harbor provisions of the Private Securities Litigation Reform Act. These statements are based on current expectations and projections and involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. Information concerning these risks is contained in the company's filings with the SEC.

Speaker Change: Before we begin I would like to advise you that all forward looking statements made on today's call are intended to fall within the safe Harbor provisions of the private Securities Litigation Reform Act of $19 95.

Speaker Change: These statements are based on current expectations and projections and involve risks and uncertainties that may cause actual results differ materially from our forward looking statements information concerning these risks is contained in the company's filings with the SEC.

Matthew Siler: Information concerning these risks is contained in the company's filings with the SEC. On September 29, 2023, we completed the divestiture of our snack bars business. Consistent with prior quarters, we will discuss our results on an adjusted continuing operations basis. A reconciliation of non-GAAP measures to their most direct comparable GAAP measures can be found in the release and the appendix tables in today's earnings stack. With that, let me now turn the call over to our Chairman, CEO, and President, Mr. Steve Oakland.

Matt Filer: On September 29, 2023, we completed the divestiture of our snack bars business. Consistent with prior quarters, we will discuss our results on an adjusted continuing operation basis. A reconciliation of non-GAAP measures to their most direct comparable GAAP measures can be found in the release and the appendix tables in today's earnings deck.

Speaker Change: On September 29, 2023, we completed the divestiture of our snack bars business consistent with prior quarters, we will discuss our results on an adjusted continuing operations basis.

Speaker Change: A reconciliation of non-GAAP measures to their most direct comparable GAAP measures can be found in the release and the appendix tables in today's earnings deck with that let me now turn the call over to our chairman CEO and President Mr. Steve Oakland.

Steve Oakland: With that, let me now turn the call over to our Chairman, CEO and President, Mr. Steve Oakland. Thank you, Matt. Good morning, everyone. I'm happy to be here with you today to discuss our second quarter financial results and our update on the outlook for the remainder of the year. First, I'd like to reflect on the first half of 2024, where we met our financial objectives. We achieved the upper end of our net sales guidance and came within a few million dollars of the upper end of our adjusted EBITDA range. We made significant progress converting a set of net sales pipeline opportunities, which should contribute to positive volume growth in the second half.

Steven Oakland: Thank you, Matt, and good morning, everyone. I'm happy to be here with you today to discuss our second quarter financial results and our update on the outlook for the remainder of the year. First, I'd like to reflect on the first half of 2024, where we met our financial objective. We achieved the upper end of our net sales guidance and came within a few million dollars of the upper end of our adjusted EBITDA rate.

Steve Oakland: Thank you, Matt and good morning, everyone.

Steve Oakland: I'm happy to be here with you today to discuss our second quarter financial results and our update on the outlook for the remainder of the year.

Speaker Change: First I'd like to reflect on the first half of 2024.

Speaker Change: Where we met our financial objectives.

Speaker Change: We achieved the upper end of our net sales guidance.

Speaker Change: Within a few million dollars of the upper end of our adjusted EBITDA range.

Steven Oakland: We made significant progress converting a set of net sales pipeline opportunities, which should contribute to positive volume growth in the second half. Additionally, we executed well against our supply chain initiative, driving improved service levels across our network, as well as securing anticipated savings, which will provide benefits this year and beyond. I'm pleased with our strengthening momentum, including at our broth facility, which is operating in line with our plan and ahead of the second half seasonal peak.

Speaker Change: We made significant progress converting a set of net sales pipeline opportunities with <unk>.

Speaker Change: Should contribute to positive volume growth in the second half.

Steve Oakland: Additionally, we executed well against our supply chain initiatives, driving improved service levels across our network, as well as securing anticipated savings, which will provide benefits this year and beyond. I'm pleased with our strengthening momentum, including at our broth facility, which is operating in line with our plan and ahead of the second half seasonal peak. This progress reinforces my confidence that we have positioned the business well to deliver on our annual net sales targets and to achieve our updated profitability guidance.

Speaker Change: Additionally, we executed well against our supply chain initiatives driving improved service levels across our network.

Speaker Change: As well as securing anticipated savings, which will provide benefits this year and beyond.

Speaker Change: I'm pleased with our strengthening momentum, including at our broth facility.

Speaker Change: Which is operating in line with our plan.

Speaker Change: And ahead of the second half seasonal peak.

Steven Oakland: This progress reinforces my confidence that we have positioned the business well to deliver on our annual net sales target and to achieve our updated profitability guide. And importantly, it's coming at a time when the private brand consumer landscape is also improving. With that, let me dive into our second quarter results, where our organic volume trend improved sequentially. As you can see on slide four, we delivered net sales of $789 million. While down 1.9% year over year, it was above the midpoint of our guidance.

Speaker Change: This progress reinforces my confidence that we have positioned the business well to deliver on our annual net sales targets.

Speaker Change: And to achieve our updated profitability guidance.

Steve Oakland: And importantly, it's coming at a time when the private brand consumer landscape is also improving with that. Let me dive into our second quarter results. where our organic volume trend improves sequentially. As you can see on slide 4, we delivered net sales of $789 million. While down 1.9% year-over-year, it was above the midpoint of our guidance range. Our adjusted EBITDA of $71 million exceeded our guidance range of $55 million to $65 million for the period. We are reiterating our 2024 net sales guidance, supported by volume growth in the third and fourth quarters. Additionally, we are narrowing our adjusted EBITDA range to $360 million to $380 million.

Speaker Change: And importantly, it's coming at a time when the private brand consumer landscape is also improving.

Speaker Change: With that let me dive into our second quarter results were.

Speaker Change: Where our organic volume trend improved sequentially.

Speaker Change: As you can see on slide four we delivered net sales of $789 million.

Speaker Change: While down one 9% year over year, it was above the midpoint of our guidance range.

Steven Oakland: Our adjusted EBITDA of $71 million exceeded our guidance range of $55 to $65 million for the period. We are reiterating our 2024 Net Sales Guide, supported by volume growth in the third and fourth quarters. Additionally, we are narrowing our adjusted EBITDA range to $360 million to $380 million.

Speaker Change: Our adjusted EBITDA of $71 million exceeded our guidance range of $55 million to $65 million for the period.

Speaker Change: We are reiterating our 2024 net sales guidance.

Speaker Change: Supported by volume growth in the third and fourth quarters.

Speaker Change: Additionally, we are narrowing our adjusted EBITDA range to $360 million to $380 million.

Steve Oakland: Pat will provide more detail on our second quarter results and this guidance in a few minutes. Turning now to an update on the industry, as you have heard me say before, TreeHouse remains attractively positioned at an intersection of two incredibly powerful long-term consumer trends: the growth of private brand groceries in North America and the consumers' shift towards snacking. As you can see on slide 5, private brands have consistently gained share over the last two decades, and we believe private brands have significant runway for growth. Many grocery retailers also see significant runway for growth in private brands and are making their own strategic investments, as you can see on slide 6.

Steven Oakland: Pat will provide more detail on our second quarter results and this guidance in a few minutes. Turning now to an update on the industry. As you have heard me say before, TreeHouse remains attractively positioned, at an intersection of two incredibly powerful long-term consumer trends: the growth of private brand groceries in North America and the consumer shift towards snacking.

Speaker Change: Pat will provide more detail on our second quarter results and this guidance in a few minutes.

Pat: Turning now to an update on the industry.

Pat: As you've heard me say before Treehouse remains attractively positioned at an intersection of two incredibly powerful long term consumer trends.

Steven Oakland: As you can see on slide five, private brands have consistently gained share over the last two decades, and we believe private brands have a significant runway for growth. Many grocery retailers also see significant runway for growth in private brands and are making their own strategic investments, as you can see on slide six. Recently, Walmart launched Better Goods, the largest food and beverage private brand in roughly 20 years. There are other examples of significant investments in the brand with both Kirkland and Simple Truth.

Pat: The growth of private brand groceries in North America and.

Pat: And the consumers shift towards snacking.

Pat: As you can see on slide five private brands have consistently gain share over the last two decades.

And we believe private brands have significant runway for growth.

Pat: Many grocery retailers also see significant runway for growth in private brands and are making their own strategic investments as you can see on slide six.

Steve Oakland: Recently, Walmart launched Better Goods, the largest food and beverage private brand in roughly 20 years. There are other examples of significant investments in private brands with both Kirkland and SimpleTruth. And finally, Aldi continues its store-based expansion across the US with an assortment that is focused almost exclusively on private brands. Taking a closer look at the second quarter, in the categories in which we operate, private brand unit sales in measured retail channels grew low single digits compared to national brands, which declined slightly. Additionally, you can see on slide 7 that price gaps between national brands and private brands remain elevated relative to historic levels in our categories.

Pat: Recently, Walmart launched better goods, the largest food and beverage private brand and roughly 20 years.

Pat: There are other examples of significant investments in the brands with both Kirkland and simple truth.

Steven Oakland: And finally, Aldi continues its store-based expansion across the U.S., with an assortment that is focused almost exclusively on private brands. Taking a closer look at the second quarter and the categories in which we operate, private brand unit sales in measured retail channels grew low single digits, compared to national brands, which declined slightly.

Pat: And finally, all the continues its store base expansion across the U S. With an assortment that is focused almost exclusively on private brands.

Speaker Change: Taking a closer look at the second quarter and the categories in which we operate.

Speaker Change: Private brand unit sales and measured retail channels grew low single digits compared to national brands, which declined slightly.

Steven Oakland: Additionally, you can see on slide seven, that price gaps between national brands and private brands remain elevated relative to historic levels in our category, although we expect these gaps may narrow as national brands promote during the holidays. We believe the gaps will be well within the historic range that supports continued private brand growth. Taking a look at slide 8, we provide an illustration that breaks down key elements of our net sales growth strategy. As we've discussed previously, core growth refers to the external factors driving our sales; it considers category growth.

Speaker Change: Additionally, you can see on slide seven.

Speaker Change: Price gaps between national brands, and private brands remain elevated relative to historic levels and our categories.

Steve Oakland: Although we expect these gaps may narrow as national brands promote during the holiday season, we believe the gaps will be well within the historic range that supports continued private brand growth.

Speaker Change: Although we expect these gaps may narrow as national brands promote during the holiday season, we.

Speaker Change: We believe the gaps will be well within the historic range that supports continued private brand growth.

Steve Oakland: Taking a look at slide 8, we provide an illustration that breaks down key elements of our net sales growth strategy. As we've discussed previously, core growth refers to the external factors driving our sales. It considers category growth, changes in private brand penetration, and our retail partners' strategies and level of their investment. In addition to the core growth, we believe we can deliver additional growth. through what we call a TreeHouse, our depth. Depth can be broken down into several elements. One, having advanced capabilities within our categories where we operate, that makes us stand out as the private brand supplier of choice.

Speaker Change: Taking a look at slide eight we provide an illustration that breaks down key elements of our net sales growth strategy.

Speaker Change: As we've discussed previously core growth refers to the external factors driving our sales.

Speaker Change: It considers category growth change.

Steven Oakland: Changes in Private Grand Penetration, and our Retail Partners Strategy, and the level of their investment. In addition to the core growth, we believe we can deliver additional growth through what we call at TreeHouse our debt. Depth can be broken down into several elements.

Speaker Change: Changes in private brand penetration.

Speaker Change: And our retail partners strategies and level of their investment.

Speaker Change: In addition to the core growth, we believe we can deliver additional growth.

Speaker Change: Through what we call a treehouse our depth.

Speaker Change: Depth can be broken down into several elements.

Steven Oakland: One, having advantaged capabilities within our categories where we operate that makes us stand out as the private brand supplier of choice. 2. Competing in categories where there is high demand. We are making investments to capitalize on. 3.

Speaker Change: One having advantaged capabilities within our categories, where we operate that makes us stand out as the private brands supplier of choice.

Steve Oakland: Two, competing in categories where there is high demand, and we are making investments to capitalize on that demand. Three, leveraging our unique category expertise and consumer insights to help our retail partners drive growth in the overall category. And finally, understanding our customers and the categories will allow us to drive enhanced margins over time. As a result of this strategy, we have created a net sales pipeline that we are excited about. We are executing well against our plan for 2024. We have secured a variety of opportunities throughout the first half of the year, including wins in cookies, refrigerated dough, pretzels, and pickles.

Speaker Change: Two competing in categories, where there is high demand.

Speaker Change: We are making investments to capitalize on that to me.

Steven Oakland: Leveraging our unique category expertise and consumer insight to help our retail partners drive growth in the overall category. And finally, understanding our customers and the categories will allow us to drive enhanced margins over time. As a result of this strategy, we have created a net sales pipeline that we are excited about. We are executing well against our plan for 2024. We've secured a variety of opportunities throughout the first half of the year, including wins in cookies, refrigerated dough, pretzels, and pickles, bolstering my confidence and our ability to deliver volume growth not only in the third and fourth quarters but beyond.

Speaker Change: Three leveraging our unique category expertise and consumer insights to help our retail partners drive growth in the overall category.

Speaker Change: And finally understanding our customers and the categories will allow us to drive enhanced margins overtime.

Speaker Change: As a result of this strategy we have created a net sales pipeline that were excited about.

Speaker Change: We are executing well against our plan for 2024.

Speaker Change: We've secured a variety of opportunities throughout the first half of the year, including wins in cookies refrigerated dough pretzels and pickles bolstering my confidence in our ability to deliver volume growth not only in the third and fourth quarters, but beyond.

Steve Oakland: bolstering my confidence in our ability to deliver volume growth not only in the third and fourth quarters but beyond.

Steven Oakland: Next, I'd like to briefly discuss our supply chain initiatives, which are outlined on slide nine and are core to our company's strategy of driving profitable growth. We continue to invest directly in our supply chain to drive consistent execution throughout our network. Enhancing our competitive position and strengthening our partnership with customers. Our teams are focused on three priorities, driving manufacturing efficiencies through TMOS, our TreeHouse management operating, Procurement Savings Opportunities, and improving the efficiency of our distribution network. The benefits of TMOS can be seen in our Overall Equipment Effectiveness, or OEE.

Steve Oakland: Next, I would like to briefly discuss our supply chain initiatives, which are outlined on slide 9. And our core to our company's strategy of driving profitable growth. We continue to invest directly in our supply chain to drive consistent execution throughout our network, enhancing our competitive position and strengthening our partnership with customers. Our teams are focused on three priorities. Driving manufacturing efficiencies through TeamOS, our Tree House management operating system, procurement savings opportunities, and improving the efficiency of our distribution network. The benefits of TeamOS can be seen in our overall equipment effectiveness, or OEE. We have seen good momentum throughout the first half of the year, driving an increase in our service level metrics as planned.

Speaker Change: Next I'd like to briefly discuss our supply chain initiatives, which are outlined on slide nine and.

Speaker Change: In our core to our company's strategy of driving profitable growth.

Speaker Change: We continue to invest directly in our supply chain to drive consistent execution throughout our network enhancing.

Speaker Change: Our competitive position and strengthening our partnership with customers.

Speaker Change: Our teams are focused on three priorities.

Speaker Change: Driving manufacturing efficiencies through T Mos, our Treehouse management operating system.

Speaker Change: Procurement savings opportunities.

Speaker Change: And improving the efficiency of our distribution network.

Speaker Change: The benefits of team off can be seen in our overall equipment effectiveness or O E.

Steven Oakland: We have seen good momentum throughout the first half of the year, driving an increase in our service level metrics as planned. We also feel confident in the benefits we can achieve from our recent work across procurement. This particular supply chain initiative is integral to the roughly $50 million of gross cost savings we outlined as a driver of the improvement in our second half profitability. More specifically, in many cases, the procurement contracts we have negotiated provide savings in the current year, as well as the opportunity for further savings throughout the life of these agreements.

Speaker Change: We have seen good momentum throughout the first half of the year driving an increase in our service level metrics as planned.

Steve Oakland: We also feel confident in the benefits we can achieve from our recent work across procurement. This particular supply chain initiative is integral to the roughly $50 million of gross cost savings we outlined as a driver of the improvement in our second half profitability. More specifically, in many cases, the procurement contracts we have negotiated provide savings in the current year as well as the opportunity for further savings throughout the life of these agreements. Finally, work to improve the efficiency of our distribution network continues, with logistics utilization and efficiency initiatives providing savings today. We continue to develop long-term strategies as it relates to our distribution network consolidation, which will bear more fruit over time.

Speaker Change: We also feel confident and the benefits we can achieve from a recent work across procurement.

Speaker Change: This particular supply chain initiative is integral to the roughly $50 million of gross cost savings, we outlined as a driver of the improvement in our second half profitability.

Speaker Change: More specifically in many cases the procurement contracts. We have negotiated provides savings in the current year as well as the opportunity for further savings throughout the life of these agreements.

Steven Oakland: Finally, work to improve the efficiency of our distribution network continues with logistics utilization and efficiency initiatives providing savings today. We continue to develop long-term strategies as it relates to our distribution network consolidation, which will bear more fruit over time. Moving on to an update on one of our BRA facilities, as you can see on slide 10, our efforts continue to progress as anticipated. And I'm happy to report that we are running the key broth production lines and shipping product from this facility today.

Speaker Change: Finally work to improve the efficiency of our distribution network continues.

Speaker Change: With logistics utilization and efficiency initiatives, providing savings today.

We continue to develop long term strategies as it relates to our distribution network consolidation.

Which will bear more fruit overtime.

Steve Oakland: Moving on to an update on one of our broth facilities, as you can see on slide 10, our efforts continue to progress as anticipated, and I'm happy to report that we are running the key broth production lines and shipping product from this facility today. We have upgraded our equipment, refined and improved our processes, and are progressing against our internal timeline. Looking ahead, we will continue to work with our customers to fulfill current needs and prepare for the upcoming broth season. We believe the restoration of this facility will provide the planned contributions to net sales and profitability in the back half.

Speaker Change: Moving on to an update on one of our broth facilities as you can see on slide 10.

Speaker Change: Our efforts continue to progress as anticipated and I'm happy to report that we are running the key broth production lines and shipping product from this facility today.

Steven Oakland: We have upgraded our equipment, refined and improved our processes, and are progressing against our internal timeline. Looking ahead. We will continue to work with our customers to fulfill current needs and prepare for the upcoming broadcast. We believe the restoration of this facility will provide the planned contributions to net sales and profitability in the back half. Before I turn the call over to Pat, I'd like to provide a brief update on our Sustainability Act.

Speaker Change: We have upgraded our equipment refined and improved our processes and are progressing against our internal timeline.

Speaker Change: Looking ahead.

Speaker Change: We will continue to work with our customers to fulfill current needs and prepare for the upcoming broth season.

Speaker Change: We believe the restoration of this facility will provide the planned contributions to net sales and profitability in the back half.

Steve Oakland: Before I turn the caller to Pat, I'd like to provide a brief update on our sustainability efforts. Last week, we released our annual environmental, social, and governance report, which captured the progress we've made in 2023 relative to our sustainability goals, including reducing greenhouse gas emissions and increasing the use of recycled content. Sustainability remains an important focus area for many of our customers, and we are continuing to make progress on our initiatives. We believe this work will represent a long-term competitive advantage for TreeHouse and better align our business strategy with the priorities of our key stakeholders.

Speaker Change: Before I turn the call over to Pat I'd like to provide a brief update on our sustainability efforts.

Steven Oakland: Last week, we released our annual Environmental, Social, and Governance report, which captured the progress we've made in 2023 relative to our sustainability goals, including reducing greenhouse gas emissions and increasing the use of recycled content. Sustainability remains an important focus area for many of our customers, and we are continuing to make progress on our initiative. We believe this work will represent a long-term competitive advantage for TreeHouse and better align our business strategy with the priorities of our key stakeholders.

Speaker Change: Last week, we released our annual environmental social and governance report.

Speaker Change: Which captured the progress we've made in 2023 relative to our sustainability goals, including reducing greenhouse gas emissions and increasing the use of recycled content.

Speaker Change: Sustainability remains an important focus area for many of our customers.

Pat: And we are continuing to make progress on our initiatives.

Pat: We believe this work will represent a long term competitive advantage for treehouse and better align our business strategy with the priorities of our key stakeholders.

Steve Oakland: We are pleased with the strides we are making and encourage you all to read our 2024 report.

Steven Oakland: We are pleased with the strides we are making and encourage you all to read our 2024 report. With that, I'll now turn the call over to Pat for further detail on our second quarter results and our updated 2024 outcome.

Pat: We are pleased with the strides we are making and encourage you all to read our 2024 report.

Pat O'donnell: With that, I'll now turn the caller to Pat for further detail on our second quarter results and our updated 2024 outlook. Thanks, Steve, and good morning, everyone. I'd like to start by thanking the entire TreeHouse team for their hard work this quarter, which is setting us up for success in the second half of 2024 and beyond.

Pat: With that I'll now turn the call over to Pat for further detail on our second quarter results and our updated 2020 for outlook.

Pat: <unk>.

Patrick ODonnell: Thanks, Steve, and good morning, everyone. I'd like to start by thanking the entire TreeHouse team for their hard work this quarter, which is setting us up for success in the second half of 2024 and beyond. I'll begin with a summary of our second quarter results on slide 11. Net sales and adjusted EBITDA both declined relative to the prior year, as expected. Net sales of $789 million were above the midpoint of our second quarter guidance of $770 to $800 million.

Pat: Thanks, Steve and good morning, everyone.

Pat: I'd like to start by thanking the entire Treehouse team for their hard work this quarter, which is setting us up for success in the second half of 2024 and beyond.

Pat O'donnell: I'll begin with the summary of our second quarter results on slot 11. Net sales and adjusted EBITDA both declined relative to the prior year, as expected. Net sales of $789 million was above the midpoint of our second quarter guidance of $770 to $800 million. Adjusted EBITDA of $71 million exceeded the top end of our guidance range of $55 to $65 million, which was primarily driven by improved execution across our supply chain, and to a lesser extent, a modest timing shift into the second quarter on favorable freight expense. On slide 12, we have provided further detail on our year-over-year net sales drivers.

Pat: I'll begin with a summary of our second quarter results on slide 11.

Pat: Net sales and adjusted EBITDA, both declined relative to the prior year as expected.

Pat: Net sales of $789 million was above the midpoint of our second quarter guidance of $770 million to $800 million.

Patrick ODonnell: Adjusted EBITDA of $71 million exceeded the top end of our guidance range of $55 to $65 million, which was primarily driven by improved execution across our supply chain and, to a lesser extent, a modest timing shift into the second quarter on favorable freight expense. On slide 12, we have provided further detail on our year-over-year nut sales driver. Our second quarter net sales were down less than 2%, which reflects an improvement in trend compared to the last couple quarters. However, while organic, volume, and mix were down year over year.

Pat: Adjusted EBITDA of $71 million exceeded the top end of our guidance range of $55 million to $65 million, which.

Pat: Which was primarily driven by improved execution across our supply chain.

Pat: And to a lesser extent, a modest timing shift into the second quarter unfavorable freight expense.

Pat: On slide 12, we have provided further detail on our year over year net sales drivers.

Pat O'donnell: Our second quarter net sales were down less than 2%, which reflects an improvement in trend compared to the last couple of quarters. While organic, volume, and mix was down year-over-year, recall we are laughing the business that we exited last year. Importantly, we are now through the impact of those business exits, and coupled with pipeline winds and strong private brand consumer trends, we have great confidence in returning to volume growth in Q3 and Q4. Additionally, the constraints that one of our broth facilities provided a drag of approximately 1%: this was more than offset by the volume contribution from our coffee acquisition.

Pat: Our second quarter net sales were down less than 2%.

Pat: Which reflects an improvement in trend compared to the last couple of quarters.

Pat: While organic volume and mix was down year over year recall, we are lapping that business that we exited last year.

Patrick ODonnell: Recall, we are lapping the business that we exited last year. And most importantly, we are now through the impact of those business exits, and coupled with pipeline wins and strong private brand consumer trends, we have great confidence in returning to volume growth in Q3 and Q4. Additionally, the constraints at one of our broth facilities provided a drag of approximately 1%.

Importantly, we are now through the impact of those business exits.

And coupled with pipeline wins and strong private brand consumer trends we.

Pat: We have great confidence in returning to volume growth in Q3 and Q4.

Pat: Additionally, the constraints at one of our broth facilities provided a drag of approximately 1%.

Patrick ODonnell: This was more than offset by the volume contribution from our coffee acquisition. Finally, pricing was a drag of 3% due to targeted commodity-driven pricing adjustments, as we expect. Moving on to slide 13.

Pat: This was more than offset by the volume contribution from our Coffey acquisition.

Pat O'donnell: Finally, pricing was a drag of 3% due to targeted commodity-driven pricing adjustments, as we expect.

Pat: Finally pricing was a drag of 3% due to targeted commodity driven pricing adjustments as we expected.

Pat O'donnell: was adopted. Moving on to slide 13, I'll take you through our adjusted EBITDA drivers. Volume and mix, including absorption, was down 1 million in the quarter, primarily driven by the laughing of business exits that I mentioned earlier. Peanock, pricing net of commodities, contributed 7 million year-over-year. This was primarily driven by our procurement supply chain initiatives, where our teams are making great progress that should continue to benefit us moving forward. Operations and supply chain were a $3 million headwind versus the prior year, primarily driven by higher labor cost and the impact of our raw facility restoration, which were partially offset by favorable freight costs.

Pat: Moving on to Slide 13, I'll take you through our adjusted EBIT drivers.

Patrick ODonnell: I'll take you through our adjusted EBITDA driver. Volume and mix, including absorption, was down $1 million in the quarter, primarily driven by the lapping of business exits that I mentioned earlier. PNOC, Pricing Net of Commodities, contributed $7 million year-over-year. This was primarily driven by our procurement supply chain initiatives, where our teams are making great progress that should continue to benefit us moving forward. Operations and Supply Chain were a $3 million headwind versus the prior year, primarily driven by higher labor costs and the impact of our broth facility restoration, which were partially offset by favorable freight costs. Lastly, SG&A and other contributed a negative $8 million versus last year, primarily due to investments in employee rewards and benefits and less TSA income relative to the prior year, as we expected.

Pat: Volume and mix, including absorption was down $1 million in the quarter, primarily driven by the lapping of business exits that I mentioned earlier.

Pat: Peanut pricing net of commodities contributed $7 million year over year.

This was primarily driven by our procurement supply chain initiatives for our teams are making great progress that should continue to benefit us moving forward.

Pat: Operations and supply chain were a $3 million headwind versus the prior year.

Pat: Primarily driven by higher labor cost and the impact of our <unk> facility restoration.

Pat: Which were partially offset by favorable freight costs.

Pat O'donnell: Lastly, SG&A and other contributed negative 8 million versus last year, primarily due to investments in employee rewards and benefits and less TSA income relative to the prior year, as we expected.

Pat: Lastly, SG&A and other contributed negative $8 million versus last year.

Pat: Primarily due to investments in employee rewards and benefits and last TSA income relative to the prior year as we expected.

Pat O'donnell: Moving on to our capital allocation strategy, which is allied on slide 14, the board and management continue to be focused on deploying capital in a manner that enhances returns for shareholders. Our first priority remains investing in our business, which we do organically through CAPEX investments and inorganically, by strategically adding depth and capabilities. We continue to expect CAPEX of about 145 million, which reflects investments in our supply chain and building capabilities to drive incremental growth. We also continue to execute on our share repurchase program. In the second quarter, we repurchased 45 million of common stock, bringing our year-to-date repurchases to 89 million.

Patrick ODonnell: Moving on to our capital allocation strategy, which is outlined on slide 14, the board and management continue to be focused on deploying capital in a manner that enhances returns for shareholders. Our first priority remains investing in our business, which we do organically through CapEx Investments and inorganically by strategically adding depth and capability. We continue to expect CapEx of about $145 million, which reflects investments in our supply chain and building capabilities to drive incremental growth.

Pat: Moving on to our capital allocation strategy, which is outlined on slide 14.

The board and management continue to be focused on deploying capital in a manner that enhances returns for shareholders.

Pat: Our first priority remains investing in our business, which we do organically through capex investments and Inorganically.

Pat: By strategically, adding depth and capabilities.

Pat: We continue to expect Capex of about 145 million.

Pat: Which reflects investments in our supply chain and building capabilities to drive incremental growth.

Patrick ODonnell: We also continue to execute on our share repurchase program. In the second quarter, we repurchased $45 million of common stock, bringing our year-to-date repurchases to $89 million. We will continue to be disciplined and look at all capital deployment decisions by evaluating risk-adjusted returns while maintaining our balance sheet strength.

Pat: We also continue to execute on our share repurchase program.

Pat: In the second quarter, we repurchased $45 million of common stock, bringing our year to date repurchases to $89 million.

Pat O'donnell: We will continue to be disciplined and look at all capital deployment decisions by evaluating risk-adjusted returns while maintaining our balance sheet strength.

Pat: We will continue to be disciplined and look at all capital deployment decisions by evaluating risk adjusted returns.

Pat: While maintaining our balance sheet strength.

Pat O'donnell: Moving on to our guidance on slide 15, we are maintaining our full year net sales outlook of flat to 2% year-over-year growth for a range of 3.43 to 3.5 billion. We continue to expect our organic volume and mix to drive our sales growth in 2024. From a pricing perspective, we are still planning for a modest commodity-driven decline year-over-year. We continue to anticipate this will be mostly offset by a slight volume and mix benefit from the coffee and pretzel acquisitions that we completed last year. Additionally, we have narrowed our adjusted EBITDA guidance range to a range of 360 to 380 million, which represents a 10 million reduction to the upper end of the range.

Patrick ODonnell: Moving on to our guidance on slide 15, we are maintaining our full-year net sales outlook of flat to 2% year-over-year growth, for a range of $3.43 to 3.5 billion. We continue to expect our organic volume and mix to drive our sales growth in 2024. However, from a pricing perspective, we are still planning for a modest commodity-driven decline year over year. We continue to anticipate that this will be mostly offset by a slight volume and mix benefit from the coffee and pretzel acquisitions that we completed last year. Additionally,

Pat: Moving on to our guidance on slide 15.

Pat: We are maintaining our full year net sales outlook of flat to 2% year over year growth for.

Pat: For a range of 3.43 to $3 5 billion.

Pat: We continue to expect our organic volume and mix to drive our sales growth in 2024 from.

Pat: From a pricing perspective, we are still planning for a modest commodity driven decline year over year we.

Pat: We continue to anticipate this will be mostly offset by a slight volume and mix benefit from the coffee and pretzel acquisitions that we completed last year.

Pat: Additionally.

Patrick ODonnell: We have narrowed our adjusted EBITDA guidance range to a range of $360 to $380 million, which represents a $10 million reduction to the upper end of the range. This update accounts for our performance in the first half of the year, when our adjusted EBITDA was a few million dollars short of the upper end of our guidance range. Additionally, we assume that some of the consumer-driven mixed trends continue into the second half of the year. We still expect free cash flow of at least $130 million, and our guidance for net interest expense of $56 to $62 million and capital expenditures of approximately $145,000 is on target.

Pat: We have narrowed our adjusted EBITDA guidance range to a range of $360 million to $380 million, which represents a $10 million reduction to the upper end of the range.

Pat O'donnell: This update accounts for our performance for the first half of the year, where our adjusted EBITDA was a few million dollars short of the upper end of our guidance range. Additionally, we assume that some of the consumer-driven mixed trends continue into the second half of the year. We still expect free cash flow of at least 130 million, and our guidance for net interest expense of 56 to 62 million, and capital expenditures of approximately 145 million is unchanged.

Pat: This update accounts for our performance for the first half of the year, where our adjusted EBITDA was a few million dollars short of the upper end of our guidance range.

Pat: Additionally, we assume that some of the consumer driven mix trends continue into the second half of the year.

Pat: We still expect free cash flow of at least $130 million.

Pat: And our guidance for net interest expense of $56 million to $62 million and capital expenditures of approximately $145 million.

Pat: Unchanged.

Pat O'donnell: As it relates to the third quarter, we expect net sales to be in the range of 865 to 895 million, representing flat to approximately 4% growth year over year. Importantly, we expect volume to drive our third quarter net sales growth with flat pricing. Our third quarter, adjusted EBITDA, is expected to be in the range of 98 to 108 million, which reflects the timing shift of favorable freight expense moving into the second quarter, which we do not expect to benefit us in the second half. As you've heard throughout this morning's call, we are confident about the momentum underway and in our ability to deliver the second half.

Patrick ODonnell: As it relates to the third quarter, we expect net sales to be in the range of $865 to $895 million, representing flat to approximately 4% growth year over year. We expect volume to drive our third quarter net sales growth with flat prices. Our third quarter adjusted EBITDA is expected to be in the range of $98 to $108 million, which reflects a timing shift of favorable freight expense moving into the second quarter, which we do not expect to benefit us in the second half.

Pat: As it relates to the third quarter, we expect net sales to be in the range of $865 million to $895 million representing.

Pat: Representing flat to approximately 4% growth year over year.

Pat: Importantly, we expect volume to drive our third quarter net sales growth with flat pricing.

Pat: Our third quarter adjusted EBITDA is expected to be in the range of $98 million to $108 million, which reflects a timing shift of favorable freight expense moving into the second quarter, which we do not expect to benefit us in the second half.

Patrick ODonnell: As you've heard throughout this morning's call, we are confident about the momentum underway and in our ability to deliver the second half. On slide 16, we've outlined the building blocks we expect to drive the second half net sales improvement. Beast Drivers Inc. Volume One Seasonal Volume

Pat: As you've heard throughout this morning's call. We are confident about the momentum underway and in our ability to deliver the second half.

Pat O'donnell: On slide 16, we've outlined the building blocks we expect to drive the second half net sales improvement. These drivers include one seasonal volume. Given assortment within our portfolio, we tend to have our highest volume periods in the second half of the year, driven by categories including coffee, creamer, hot cereal, reprojrated dough, and broth. We continue to expect that our broth business will be a stronger contributor than the second half. Two net sales opportunities. We've talked about the net sales pipeline that our teams have been working to confer. We have good visibility into those contracts and expected uplift in the third and fourth quarters, as well as in 2025.

Pat: On slide 16, we've outlined the building blocks, we expect to drive the second half net sales improvement.

Pat: These drivers include.

Pat: One seasonal volume.

Patrick ODonnell: Given the assortment within our portfolio, we tend to have our highest volume periods in the second half of the year driven by categories including coffee, creamer, hot cereal, refrigerated dough, and broth. We continue to expect that our broth business will be a stronger contributor in the second half to that sales opportunity. We've talked about the net sales pipeline that our teams have been working to convert. We have good visibility into those contracts and expect an uplift in the third and fourth quarters, as well as into 2025.

Pat: Given assortment within our portfolio, we tend to have our highest volume periods in the second half of the year driven by categories, including coffee Creamer Hot cereal refrigerated dough and broth.

Pat: We continue to expect that our broth business will be a stronger contributor in the second half.

Pat: Two net sales opportunities we.

Pat: Talked about the net sales pipeline that our teams have been working to convert we have good visibility into those contracts and expect an uplift in the third and fourth quarters as well as into 2025.

Pat O'donnell: And three, incremental pricing to recover inflation. In the first half of the year, we executed pricing to recover cocoa inflation. This pricing is effective beginning in the third quarter, which will benefit our second half net sales.

Patrick ODonnell: And three, incremental pricing to recover inflation. In the first half of the year, we implemented pricing to recover cocoa inflation. This pricing is effective beginning in the third quarter, which will benefit our second half net sale. We've provided a similar analysis as it relates to our anticipated adjusted EBITDA performance on slide 17. The primary drivers of our second half improvement include the following. First, the seasonal volume and mixed uplift we typically experience in the second half, as well as the conversion of new net sales opportunities from our pipeline and our Brock business returning to normalized service levels.

Pat: And three incremental pricing to recover inflation.

Pat: In the first half of the year, we executed pricing to recover cocoa inflation.

Pat: This pricing is effective beginning in the third quarter, which will benefit our second half net sales.

Pat O'donnell: We've provided a similar analysis as it relates to our anticipated adjusted EBITDA performance on slide 17. The primary drivers of our second half improvement include the following. First, the seasonal volume and mix uplift we typically experience in the second half, as well as the conversion of new net sales opportunities from our pipeline, and our broth business returning to normalized service levels. Second, supply chain initiatives. Our teams have been making great progress in executing our supply chain initiatives around T-MOS, our distribution network, and procurement, which we expect to be the largest contributor to our second half profitability.

Pat: We've provided a similar analysis as it relates to our anticipated adjusted EBITDA performance on slide 17.

Pat: The primary drivers of our second half improvement include the following.

Pat: First the seasonal volume and mix uplift, we typically experienced in the second half as well as the conversion of new net sales opportunities from our pipeline.

Pat: And our broth business returning to normalized service levels.

Patrick ODonnell: Second, the Supply Chain Initiative. Our teams have been making great progress in executing our supply chain initiatives around TMOS, our distribution network, and procurement, which we expect to be the largest contributor to our second half profitability. And third, the aforementioned COCO pricing we implemented will also benefit our second half profitability, as we get back some of the drag we incurred on our profit in the first half. In closing, I'm pleased with the improved business momentum heading into the second half of the year, and we will continue to focus on successful execution as we move forward. With that, I'll turn it back over to Steve for closing remarks. Thank you. Thanks.

Pat: Second supply chain initiatives.

Pat: Our teams have been making great progress in executing our supply chain initiatives around T. Mas, our distribution network and procurement, which we expect to be the largest contributor to our second half profitability.

Pat O'donnell: And third, the aforementioned cocoa pricing we implemented will also benefit our second half profitability as we get back some of the drag we incurred to our profit in the first half.

Pat: And third the after mentioned cocoa pricing, we implemented will also benefit our second half profitability.

Pat: As we get back some of the drag we incurred to our profit in the first half.

Pat O'donnell: In closing, I'm pleased with the improved business momentum heading into the second half of the year, and we will continue to focus on successful execution as we move forward.

Pat: In closing I'm pleased with the improved business momentum heading into the second half of the year.

Pat: And we will continue to focus on successful execution as we move forward.

Steve Oakland: With that, I'll turn it back over to Steve for closing remarks. Steve. Thanks, Pat. Before I open the call up to your questions, I'd like to end where I started, which is that the business is well positioned for the remainder of the year. To that end, I want to thank the entire Treehouse team for their hard work and dedication in driving our strategic execution as a private brief. leader. Our top line performance is improving, and we are on track to deliver organic volume growth in both the third and fourth quarters. We are executing on our initiatives across the supply chain, which should help drive growth, margin expansion, and improve the consistency of our performance in the second half.

Pat: With that I'll turn it back over to Steve for closing remarks, Steve.

Steven Oakland: Thanks, Pat. Before I open the call up to your questions, I'd like to end where I started, which is that the business is well positioned for the remainder of the year. To that end, I want to thank the entire TreeHouse team for their hard work and dedication in driving our strategic execution as a private brand leader. Our top-line performance is improving, and we are on track to deliver organic volume growth in both the third and fourth quarters.

Steve Oakland: Pat before I open the call up to your questions I'd like to end, where I started.

Steve Oakland: Which is that the business is well positioned for the remainder of the year.

Pat: To that end I want to thank the entire treehouse team for their hard work and dedication in driving our strategic execution is our private brand leader.

Our topline performance is improving and we are on track to deliver organic volume growth in both the third and fourth quarters.

Steven Oakland: We are executing on our initiatives across the supply chain, which should help drive gross margin expansion and improve the consistency of our performance in the second half. Additionally, we have restored production capability at our broth facility in line with our plan and are well positioned to deliver for our customers ahead of the upcoming peak season. We will continue to prioritize execution, sales, and volume growth, and margin expansion as our strategy plays out and we capitalize on the benefits of the industry and consumer trends. With that, I'll turn the call over to the operator to open the line for your questions.

Pat: We are executing on our initiatives across the supply chain, which should help drive gross margin expansion and improve the consistency of our performance in the second half.

Steve Oakland: And we have restored production capability at our broth facility in line with our plan and are well-positioned to deliver for our customers ahead of the upcoming peak season. We will continue to prioritize execution, sales, and volume growth and margin expansion as our strategy plays out and we capitalize on the benefits from the industry and consumer trends.

Pat: And we have restored production capability at our <unk> facility in line with our plan and are well positioned to deliver for our customers ahead of the upcoming peak season.

Pat: We will continue to prioritize execution sales and volume growth and margin expansion as our strategy plays out and we capitalize on the benefits from the industry and consumer trends.

Unknown Executive: With that, I'll turn the call over to the operator to open the line for your questions. Thank you. We will now begin the question and answer session. I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. So, with your question, press star one again.

With that I'll turn the call over to the operator to open the line for your questions.

Operator: Thank you. We will now begin the question and answer session. I would like to remind everyone that in order to ask a question, press star followed by the number one on your telephone keypad. To withdraw your question, press star one again. The first question comes from Andrew Lazar. From Barclays, your line is:

Speaker Change: Thank you we will now begin the question and answer session I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad to withdraw your question Press Star one again.

Andrew Lazar: The first question comes from Andrew Lazar from Barclays. Your line is open. Hi, Steven Pat. Good morning. Morning, Andrew. Hi, I'm Steve. To start off, you talked a lot about the pipeline in sales that are starting to convert into wins, which is as nice to see. I guess, how would you dimensionize how much of the full year if based on wins that you sort of know are converting? Like, you've got the, it's secured if you will and have visibility to it versus ones that could convert. And if they do, I guess would represent either upside to sales growth in 24 or give you more visibility into 25.

Speaker Change: The first question comes from Andrew Lazar.

Speaker Change: From Barclays. Your line is open.

Andrew Lazar: Hi Steve and Pat, good morning. Good morning, Andrew.

Speaker Change: Hi, Stephen Good morning, Good morning, Good morning, Andrew.

Steven Oakland: Steve, to start off, you talked a lot about the pipeline of sales that are starting to convert into wins, which is nice to see. I guess, how much or how would you dimensionize how much of the full year is based on wins that you sort of know are converting? Like you've got the secured, if you will, and have visibility to it versus ones that could convert. And if they do, I guess, it would represent either upside to sales growth in 24 or give you more visibility into 25.

Speaker Change: Steve to start off you you've talked a lot about the the.

Andrew Lazar: Pipeline and sales that are starting to convert into wins, which is nice to see I guess, how much or how would you dimensionalize how much of the full year.

Andrew Lazar: Based on wins that you sort of know or converting like you've got the.

Speaker Change: It's secured if you will and have visibility to it versus ones that could convert and if they do I guess would represent either upside to sales growth in 'twenty four or give you more visibility into 25.

Steven Oakland: Sure. Sure.

Steve Oakland: Sure. I enter the guidance that we've given today counts those things that have been secure. Right? And so if you think about the back half, there's a couple of things that play here. Obviously, restoring our brought the solely was key, and we've guided that that's nicely on track. And then, as we lap those losses, turning those into wins, right? And so the numbers we have in the deck are, you know, reflect just those things that are committed. Are there some opportunities that could maybe impact the fourth quarter? Certainly. There are, but there'll be more; there'll actually be more impactful for next year.

Speaker Change: Sure sure.

Speaker Change: Andrew the guidance, we've given today counts those things that have been secured right and so.

Steven Oakland: Andrew, the guidance that we've given today counts those things that have been secured, right? And so if you think about the back half, there are a couple things at play here. Obviously, restoring our broth facility was key, and we've guided that that's nicely on track. And then, as we lap those losses, turning those into wins, right? And so the numbers we have in the deck reflect just those things that are committed. Are there some opportunities that could maybe impact the fourth quarter? Certainly, there are, but there will be more. They'll actually be more impactful for next year.

Speaker Change: If you think about the back half Theres, a couple of things with pleasure honestly, restoring our broth facility was key and we've guided that that's mostly on track and then as we lap those losses, turning those into wins right and so the numbers. We have in the deck are reflect just those things that are committed or theres some opportunities that could maybe.

Speaker Change: Impact to fourth quarter, certainly there are.

But there'll be more there'll actually be more impactful for next year got.

Steven Oakland: Got it. And then you talk about private label share growing in your categories. I know it's always a harder one, but what about TreeHouse's share of private label in your categories? I mean, have you seen that, I guess, stabilize or start to improve? And if not, when would you expect that?

Steve Oakland: And then you talk about private label share growing in your categories. I noticed there was a harder one, but what about tree houses' share of private label in your categories? I mean, have you seen that? I guess stabilize or start to improve? And if not, when would you expect that? Sure. And honestly, that's been the most frustrating part of both the exits that we did last year in the brought facility because it's masked that to the outside world. So we've seen ourselves do well in places like cookies, in places like dough, in places like crackers.

Speaker Change: Got it and then you're talking about private label share growing in your categories.

Speaker Change: I noticed there was a harder one but what about treehouses share of private label.

Speaker Change: And your categories. I mean have you seen that I guess stabilize or start to improve in and if not when would you expect that sure.

Steven Oakland: Sure. And honestly, that's been the most frustrating part of both the exits that we did last year and the broth facility, because it's masked that from the outside world. So we've seen ourselves do well in places like cookies, in places like dough, in places like crackers, but it hasn't been obvious outside the business. And so we expect that to change in the back half. In fact, the guidance that we have, if you look at the midpoint of that, would suggest we'll need to do a little better than the marketplace. And so I think that reflects a little gain of share, at least specifically in the fourth quarter.

Speaker Change: Honestly, that's been the most frustrating part of both the exits that we did last year and the proper solely because it's masked that to the outside world. So we've seen ourselves do well in places like cookies in places like down in places like crackers.

Andrew Lazar: But as I'm in obvious outside the business, so we expect that to turn in the back half. In fact, the guidance that we have, if you look at the midpoint of that, would suggest we'll need to do a little better than the marketplace. So I think that reflects a little gain of share; at least specifically in the fourth quarter, you'll see a gain of share. Great. Thank you.

Speaker Change: But it hasnt been obvious outside the business and so we expect that to turn in the back half.

Speaker Change: In fact, the guidance that we have if you look at the midpoint of that would suggest we'll need to do a little better than the marketplace. So I think that reflects a little gain of share it.

Speaker Change: At least specifically in the fourth quarter Youll see a gain share right.

Patrick ODonnell: Great, thank you. And then a real quick one, just Pat, are you able to quantify just the amount of the timing shift of the freight benefit from 3Q to 2Q? Thanks so much.

Pat O'donnell: And then, real quick one, just Pat, you're going to quantify just the amount of the timing shift of the freight benefit from 3Q to 2Q. Thanks so much. Yeah, I think that's a few million dollars of the over delivery that we saw in the second quarter. Thanks very much. Great. Thanks, Andrew.

Speaker Change: Alright. Thank you and then a real quick one just Pat did you ever quantify just the amount of the the timing shift of the freight benefit from <unk>. Thanks. So much yeah, I think that's a few million dollars of the over delivery that we saw in the second quarter.

Patrick ODonnell: Yeah, I think that's a few million dollars of the overdelivery that we saw in the second quarter.

Speaker Change: Thanks very much.

Steven Oakland: Great. Thanks, Andrew.

Speaker Change: Great. Thanks, Andrew.

Matt Smith: The next question comes from Matt Smith of Diffle. Your line is open. Hi, good morning. But I want to ask you highlighted $50 million of gross productivity savings in the back half of the year. If we go back to the Investor Day, you were targeting $250 million through 2027. Have you seen anything in your procurement activities or the supply chain and distribution review where there's potential upside to that $250 million as you move through the years? You know, I think we feel really good about delivering that $250 million, Matt. So I think it's probably given that that was a multi-year target.

Matthew Smith: The next question comes from Matt Smith of Stifle. Your line is open.

The next question comes from Matt Smith of Stifel. Your line is open.

Matthew Smith: Hi, good morning. Pat, I want to ask you highlighted $50 million of gross productivity savings in the back half of the year. If we go back to investor day, you were targeting $250 million through 2027. Are you seeing, have you seen anything in your procurement activities or the supply chain and distribution review where there's potential upside to that $250 million as you move through the years?

Matt Smith: Hey, good morning, Pat I wanted to ask you highlighted $50 million of gross productivity savings in the back half of the year. If we go back to the Investor Day, you were targeting $250 million through 2027 are you seeing have you seen anything in your procurement activities or the supply chain and distribution.

Speaker Change: <unk> review, where there's potential upside to that $250 million as you move through the years.

Patrick ODonnell: You know, I think we feel really good about delivering that $250 million, Matt. So I think, given that that was a multi-year target, it's probably hard to say, you know, upside today. I think we feel really good about the progress in terms of what we expect to deliver this year. And then, obviously, everything we do this year helps us into future years as well, if that happens. And so we feel really confident about where we are at and the progress that we're making on all three.

Speaker Change: You know I think we feel really good about delivering that $250 million, Matt. So I think it's probably given that that was a multiyear target is probably hard to say.

Steve Oakland: It's probably hard to say, you know, upside today. I think we feel really good about the progress in terms of what we expect to deliver this year. And then obviously, everything we do this year helps us into the future years, as well as that lapse.

Speaker Change: Upside today, I think we feel really good about the progress in terms of what we expect to deliver this year and then obviously everything we do this year helps us into the into the future years as well as that laps and so we.

Steve Oakland: And so we feel really confident about where we're at in the progress that we're making across all three elements.

Speaker Change: We feel really confident about where we're at the progress that we're making across all three elements.

Patrick ODonnell: Thank you. And could you talk about the bidding environment? You talk about winning a couple of contracts in hand with line of sight into potential future wins. Are you seeing a fairly rational bidding environment? Has there been any impact from some of the deflationary inputs that we've seen, especially across grains?

Steve Oakland: Thank you. And could you talk about the bidding environment? You talk about winning a couple of contracts in hand with line of sight into potential future wins. Are you seeing a fairly rational bidding environment? Has there been any impact from some of the deflationary inputs that we've seen, especially across grains? Yeah, I don't think we're seeing anything that we would describe as irrational bidding behavior. I think we are in an environment that we, you know, we feel confident in and we feel good about the categories that we're into, which was one of the changes with our strategy of in growing categories.

Speaker Change: Thank you and could.

Speaker Change: Could you talk about the bidding environment, you talked about winning a couple of contracts in hand with line of sight into potential future wins are you seeing a fairly rational bidding environment has there been any impact from some of the deflationary input.

Speaker Change: Inputs that we've seen especially across screens.

Speaker Change: Yeah.

Steven Oakland: Yeah, I

Steven Oakland: Yeah, I don't think we're seeing anything that we would describe as irrational bidding behavior. I think we are in an environment that we, you know, we feel confident in, and we feel good about the categories that we're in, too, which was one of the changes with our strategy of growing categories. We feel like we compete really well, and we're in more of those today than we were before.

Speaker Change: Yeah, I don't think we're seeing anything that we would describe it as irrational bidding behavior I think we are in an environment that we.

Speaker Change: Still confident in and we feel good about the categories that were NPA, which was one of the changes with our strategy of.

Speaker Change: And growing categories, we feel like we compete really well and we're in more of those today than we were before.

Steve Oakland: We feel like we compete really well, and we're more and more of those today than we were before.

Matt Smith: Thank you; I'll pass it on.

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

Robert Moskow: The next question comes from the line of Robert Moscow off PD talent. Your line is open. Hi there, Steve. I kind of wanted to gauge your thinking on how the portfolio stands today. Do you think that you're done on rationalization efforts with, you know, there's been so much over the years. And you yourself said it's been frustrating because it doesn't show, you know, the market share gains you're picking up. Do you think you're done, or is there more you have to do? And then secondly on broth, are you now fully back to where you were before in terms of sales on broth?

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

Speaker Change: The next question comes from the line of Robert Moskow off PD Cowen. Your line is now open.

Robert Moskow: Hi there, Steve. I kind of wanted to gauge your thinking on how the portfolio stands today. Do you think that you're done with rationalization efforts? There's been so much over the years, and you yourself said it's been frustrating because it doesn't show the market share gains you're picking up. Do you think you're done? Or is there more you have to do? And then secondly, on broth, are you now fully back to where you were before in terms of sales on broth?

Robert Moskow: Either Steve I'm wondering if I kind of wanted to gauge your youre thinking on.

Robert Moskow: How the portfolio stands today do you think that you are done on a rationalization efforts with you know theres been so much over the years and you yourself said, it's been frustrating because it doesn't show.

Speaker Change: The market share gains youre picking up.

Speaker Change: Do you think you're done or do you is there more you have to do and then secondly on broth.

Speaker Change: Are you now fully back to where you were before in terms of sales on broth.

Steve Oakland: Like in the back half of this year, do you expect to be, you know, 100% of the business, or are you just kind of like making improvement here compared to last year and still have work to do. Sure, sure.

Robert Moskow: Like in the back half of this year, do you expect to be, you know, 100% of the business? Or are you just kind of making an improvement here compared to last year and still have work to do?

In the back half of this year do you expect to be.

Speaker Change: 100% of.

Speaker Change: Of the business or.

Speaker Change: Are you just kind of like making improvement here compare to last year and still have work to do.

Steven Oakland: Sure, sure. Let me touch on the first one.

Steven Oakland: Thanks. Sure, sure. Let me touch on the first.

Speaker Change: Sure sure let me touch on the first one you know.

Steve Oakland: Let me touch on the first one. You know, obviously, you know, looking at your portfolio was good hygiene, right to constantly be doing that. You saw that we have impaired our rent during coffee business. That is a very small business. It's like $25 million in sales. That is a category that actually the capital was going in when I arrived, right. And the previous management team had a pro forma and a plan there that that was going to become a nice private label business. Well, you know, unfortunately, not all of those things work out, right? I think the private brand share and ready to drink coffee is like 1%.

Speaker Change: Honestly.

Speaker Change: Looking at your portfolio was good hygiene right to constantly be doing that.

Steven Oakland: You know, obviously, looking at your portfolio is good hygiene, right, to constantly be doing that. You saw that we had impaired our ready-to-drink coffee business. That is a very small business. It's like $25 million in sales.

Speaker Change: You saw that we have impaired our ready to drink coffee business that is.

Speaker Change: Small business, it's like $25 million in sales that is a category that the actually the capital was going in when I arrived right and the previous management team had on a pro forma.

Steven Oakland: That is a category that actually had the capital going in when I arrived, right? And the previous management team had a pro forma and a plan there that said that that was going to become a nice private label business. Well, you know, unfortunately, not all of those things work out, right?

Speaker Change: Our plan there that was going to become a nice private label business.

Unfortunately, not all of those things work out right I think the.

Steven Oakland: I think the private brand share in ready-to-drink coffee is like 1%, right? And so we've worked closely with a number of retail customers that have tried that, and that is just one of those categories where the consumer buys the brand, not private labor. So, that one makes sense to us, and we think those kinds of things need to happen. But for the most part, Rob, we're in a great place, right? We like the categories we're in.

Speaker Change: Private brand share in ready to drink coffee is like 1% right.

Steve Oakland: Right? And so we've worked closely with a number of retail customers that tried that, and that is just one of those categories that the consumer buys brand, not private label.

And so we've worked closely with a number of retail customers that tried that and that is just one of those categories is the consumer buys brand not private label.

Speaker Change: So that was that one makes sense to us and so we think those kinds of things need to happen, but for the most part Rob we're in a great place right. We like the categories. We're in we have a couple of categories that we talk about where we're not as you know we're not as deep as we'd like to be and we'll make investments. So I would I wouldn't say it'll be investments rather.

Steven Oakland: We have a couple categories that we talk about where we're not as deep as we'd like to be, and we'll make investments. So I would say they'll be investments rather than divestments, right, or rather than exits there.

Steve Oakland: So I would say it will be investments rather than divestments rather than exits there. So the portfolio is in good shape.

Rob: Than divestments rider rather than exits there.

Steven Oakland: So the portfolio's in good shape, and then when it comes to broth, I think we'll be very close to fully 100% by the fourth quarter. It may take us into the first quarter to be absolutely 100%, but we've got the four key lines running in our Cambridge facility today, and we're building momentum there. So we think we'll start to fill the pipeline in the third quarter, and we'll serve the demand. The interesting thing is, and I think I've spoken of this before, is that we actually have more business on the books today than we did before this all happened.

Rob: So the portfolio is in good shape and then when it comes to raw.

Steve Oakland: And then, when it comes to broth, I think we'll be very close to fully 100% by the fourth quarter. It may take us into the first quarter to be absolutely 100% but we've got the four key lines running in our Cambridge facility today, and we're building momentum there. So we think we'll start to fill the pipeline in the third quarter, and we'll serve the demand. The interesting thing is, and I think I've spoken to this before, is we actually have more business on the books today than we did before this all happened. And some of our largest customers in their QA departments have been through this journey with us and see the investments that we've made and feel very confident in our ability to deliver long term.

Speaker Change: It will be very close to fully 100% by the by the fourth quarter. It may take us into the first quarter to be absolutely, 100%, but we've got the four key lines running in our Cambridge facility today, and we're building momentum there. So we think we'll start to fill the pipeline in the third quarter and will serve the demand.

Speaker Change: Interesting thing is and I think I've spoke to the spoken to this before is we actually have more business on the books today than we did before this all happened.

Steven Oakland: And some of our largest customers and their QA departments have been through this journey with us and see the investments that we've made and feel very confident in our ability to deliver long-term. And so they've actually awarded us some work. So, we feel good about that. It's a tough thing to run. It's a very complicated process, and that capacity is very valuable, and we're committed to continuing to invest in it. So, we feel good about it.

Speaker Change: And some of our largest customers and their QA departments have been through this journey with us and see the investments that.

Speaker Change: We've made and feel very confident in our ability to deliver long term and so they've actually awarded us more business right. So.

Steve Oakland: And so they've actually awarded us some more business, right? So we feel good about that. It's a tough thing to run. It's a very complicated process, and that capacity is very valuable. And we're committed to continue to invest in it. So we feel good about it.

Feel good about that it's a tough thing to run its a very complicated process and that capacity is very valuable.

Speaker Change: And we're committed to continuing to invest so we feel good about.

Carla Casala: Thank you. The next question comes from the line of Carla Casala of JP Morgan. Your line is open. Hi, thank you for taking the question. You may have said this or might have missed it. Did you say what the impairment was related to? Yeah, we just covered that. So that was on some assets with and are ready to drink beverage business, where we've made the decision to move on from that business to share. Yeah, Carla, that was a very small business that they invested in that. In fact, that capital was literally being put in the ground as I arrived.

Speaker Change: Thank you.

Speaker Change: Okay.

Carla Casella: The next question comes from the line of Carla Casella of J.P. Morgan. Your line is open.

Speaker Change: The next question comes from the line of Carla Casella of Jpmorgan. Your line is open.

Carla Casella: Hi, Thank you for taking the question you May have said this I might've missed it did you say what the impairment related to.

Carla Casella: Hi, thank you for taking the question. You may have said this already; I might have missed it. Did you say what the impairment was related to?

Steven Oakland: Yeah, we just covered that. So that was on some assets within our ready-to-drink beverage business where we've made the decision to move on from that.

Speaker Change: Yeah, we just cover that so that was on some assets within our ready to drink beverage business, where we've made the decision to move on from that business. This year.

Steven Oakland: Yeah, Carla, I just mentioned it. That was a very small business that they invested in, and, in fact, that capital was literally being put in the ground as I arrived, and it never lived up to the pro forma that the original management team put together.

Carlos: Yes Carlos.

Speaker Change: As mentioned that was a very small business that they invested in that.

Speaker Change: Fact that capital was literally being put in the ground as I arrived and it never lived up to the pro forma.

Carla Casala: And it never lived up to the performance that the original management team put together for that. Okay, great. And then you talked about a good new sales pipeline. I'm just finding it.

Speaker Change: But the original management team put together for that.

Carla Casella: Okay, great. And then you talked about a good new sales pipeline. I'm just wondering how much of that is coming from new, new accounts or the depth within existing accounts and kind of whether you see growth coming more from one of those elements or the other going forward?

Okay, Great and then you talked about he said new sales pipeline I'm. Just wondering is it how much of that is coming from new.

Steve Oakland: Is it how much of that is coming from new accounts or the depths within existing accounts and kind of whether you see growth coming more from one of those elements or the other going forward? I would say it's nicely balanced. I think there's depth and categories. We have brought back a lot of our assortment, but there's new items. I mean, I take you back to season pretzels, for example, the investments we made in capacity and capability there, that businesses. There's a number of wins in that as we go forward, both in this year and into next year.

Speaker Change: New accounts or is it depth within existing accounts and kind of whether you see growth coming more from one of those elements where are the other going forward.

Steven Oakland: You know, I would say it's nicely balanced. I think there's depth in categories, right? We have brought back a lot of our assortment, but there are new items. I mean, I take you back to seasoned pretzels, for example.

Speaker Change: I wouldn't say, it's nicely balanced I think theres depth in categories, where we have brought back a lot of our assortment, but theres new items.

Speaker Change: Take it back to Susan Pretzels for example that the investments we made in capacity and capability there that businesses. There's a number of wins in that as we go forward. Both in this year and into next year. So it's a combination of depth things like that in and categories as well as we still have a number of customers, who don't buy every category right and so.

Steven Oakland: The investments we made in capacity and capability there, that business is – there are a number of wins in that as we go forward, both this year and into next year. So it's a combination of depth, things like that, in categories as well as, you know, we still have a number of customers who don't buy every category from us, right? And so we're picking up some categories that are

Carla Casala: So it's a combination of depth, things like that in categories, as well as, you know, we still have a number of customers who don't buy every category. And so we're picking up some categories that exist in customer. Okay, great. Thank you so much.

Speaker Change: We're picking up some categories that are existing customers.

Carla Casella: Okay, great. Thank you so much.

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

William Reuter: The next question comes from the line of William Reuter of Bank of America. Your line is open. Good morning. In a question regarding a portfolio a couple minutes ago, you mentioned that you're probably going to be growing more so than then divesting at this point. Are there further opportunities for M&A? What's the pipeline look like? What's your appetite and what's the how are valuations? Sure. I think there are some opportunities for us. I would though liken them more to what we did in coffee. It's a build versus buy decision. I still think it's really hard to put capital in the ground at a very fast pace.

William Reuter: The next question comes from the line of William Reuter of Bank of America. Your line is open.

Speaker Change: The next question comes from the line of William Reuter of Bank of America. Your line is open.

William Reuter: Good morning. In a question regarding the portfolio a couple minutes ago, you mentioned that you're probably going to be growing more so than divesting at this point. Are there further opportunities for M&A? What's the pipeline look like? What's your appetite? And how are valuations?

William Reuter: Good morning.

William Reuter: A question regarding the portfolio a couple of minutes ago, you mentioned that youre, probably going to be growing more so than than divesting at this point.

William Reuter: Are there further opportunities for M&A, what's the pipeline look like whats your appetite and whats the how evaluations.

Steven Oakland: them more to what we did in coffee. It's a build versus buy decision. I still think it's really hard to put capital in the ground at a very fast pace. It still takes longer and costs more to build these new factories. We think there's a couple of assets around that would tuck in nicely that may bring some sales along with them, but more importantly, bring capability and capacity in categories where we know there's good private-label growth.

William Reuter: Sure.

Speaker Change: Thank you Bill I think there are some opportunities for us and.

Speaker Change: I would though like in a more to what we did in coffee right, it's a build versus buy decision.

Speaker Change: I still think it's really hard to put capital in the ground.

Speaker Change: At a very fast pace right it still takes longer and cost more to build build these new factories and so we think theres a couple of assets around that would tuck in nicely.

Steve Oakland: It still takes longer and costs more to build these new factories. We think there's a couple of assets around that would tuck in nicely, that may bring some sales even down along with them, but more importantly bring capability and capacity in categories where we know there's good, private level growth rates. I would say it will be more of that kind of thing at this point, but there are a couple around. When it comes to valuations, I think those sell at more reasonable valuations than growing businesses. When you're buying capital assets, it's easier to value. Got it.

Speaker Change: It may bring some sales and EBITDA, along with them, but more importantly, bring capability capacity and categories, where we know there is there's good private label growth rates. So I would say it'll be more of that kind of thing at this point, but there are a couple of round them up.

Steven Oakland: So I would say it'll be more that kind of thing at this point, but there are a couple around. And when it comes to valuations, you know, I think those sell at more reasonable valuations than growing businesses, right? When you're buying CapEx or buying capital assets, it's easier to value.

Speaker Change: When it comes to valuations I.

Speaker Change: I think those sell it at more reasonable valuations, then and growing businesses right when youre buying capex or buying capital assets, it's easier to value.

William Reuter: Got it. And then in a question, I think it was Carla's question, but you talked about how you'll be at full capacity in the Broth facility by the fourth quarter. You have some new wins. Were there any accounts that you permanently lost or that have not come back and felt comfortable buying at the same level that they had before in Broth?

Speaker Change: Got it and then.

Steve Oakland: And then in a question, I think it was to Carl's question, but you talked about how you'll be at full capacity in the broth facility by the fourth quarter. You have some new wins. Were there any accounts that you permanently lost or that have not come back and felt comfortable buying at the same level that they had before in broth? Yeah, sure. That's one of the toughest conversations I have because I know most of these retailers personally, right? There are some of our smaller customers, when we had to allocate current production, that we were unable to provide anything meaningful for, and so they were able to find those supplies elsewhere.

Speaker Change: Then a question I think it was to Carla's question, but you talked about how you'll be at full capacity in the Bronx facility by the fourth quarter you have some new wins were there any accounts that you permanently lost or that have not come back and felt comfortable buying at the same level that they had before in broth.

Steven Oakland: Yeah, sure, that's one of the toughest conversations I have because I know most of these retailers personally, right? There are some of our smaller customers when we had to allocate current production that we were unable to provide anything meaningful for, and so they were able to find those supplies elsewhere. So, you know, in the end, that may take some complexity out of our network, but we always hate to disappoint anybody. So there were a couple smaller ones that we had to leave.

Speaker Change: Yes, sure that that's one of the toughest conversations I have because I know most of these retailers personally right. There are some of our smaller customers. When we had to allocate current production that we were unable to provide anything meaningful for and so they were able to find those supplies elsewhere. So.

Unknown Executive: In the end, that may take some complexity out of our network, but we always hate to disappoint anybody. There were a couple smaller ones that we had to leave. Got it. All right. That's all from me. Thank you.

Speaker Change: And that May take some complexity out of our network, but we always hate to disappoint anybody. So there were a couple of smaller ones that that we had to wait.

William Reuter: Got it. All right, that's all for me. Thank you. The next question comes from the line of Truist Sec CIB. Your line is open.

Speaker Change: Got it alright, that's all for me. Thank you.

Unknown Executive: The next question comes from the line of TruWist SEX CIB. Your line is open. Hi, Bill.

Speaker Change: The next question comes from the line of tourists sex CIB. Your line is open.

Tori Essex: Hi, Bill.

Unknown Executive: Hey, this is Jack Crawford on the line for Bill Chappell. We've seen various reports about a flowdown in QSRs. Could you give any color on what you're seeing there, and then just remind us what percentage of the business is exposed to food service? Sure. Food service is small for us. It's less than 10% of our business. The only exposure we have to QSR is in our pickle business, and it's with one of the hottest QSR chains in the country. So we've not seen that impact, but most of our business is grocery. So we see the same numbers.

Jack Crawford: Hey, This is Jack Crawford on the line for Bill Chappell, we've seen various reports about a slowdown in <unk> could you give any color on what youre seeing there and then just remind us what percentage of the business is exposed to foodservice.

Unknown Executive: Sure, you know, food services is small for us, right? It's less than 10% of our business. You know, the only exposure we have to QSR is in our pickle business, and it's with one of the hottest QSR chains in the country. So we've not seen that impact. But, you know, most of our business is groceries. So we see the same numbers. We think food service in general is soft, but it isn't impacting what we have.

Tori Essex: Sure.

Service is small for us right, it's less than 10% of our business.

Speaker Change: The only exposure we have to <unk> is in our Pickle business Alliance with one of the hottest <unk> change in the country. So we have not seen that impact.

Speaker Change: But.

Speaker Change: Most of our businesses grocery so we see the same numbers, we think within foodservice in general.

Steve Oakland: We think we think food service in general is soft, but it isn't impacting what we've guided so far.

Speaker Change: As soft but.

Speaker Change: It isn't impacting what we've guided so far.

Speaker Change: Yes.

Jim Celera: Your next question comes from the line of Jim Celera of Steven. Your line is open. Thanks for taking our question. I wanted to ask a little bit about some trends we've seen, at least in my area in the Midwest, where on a lot of displays, we've noticed an emerging presence of private label coupled with, you know, kind of prominent branding displayed on the end cap. I'm just wondering if that's something that you guys have seen kind of across your categories and if that's perhaps supporting some of the strong market share trends we continue to see in private label.

James Salera: Your next question comes from the line of James Salera of Stevens. Your line is open.

James <unk>: Your next question comes from the line of James <unk> of Stephens. Your line is open.

James Salera: Thanks for taking our question. I wanted to ask a little bit about some trends we've seen, at least in my area, I'm in the Midwest, where on a lot of displays, we've noticed an emerging presence of private label coupled with, you know, kind of prominent branded displays on the end cap.

James <unk>: Hey, guys. Thanks for taking my question.

Speaker Change: I wanted to ask a little bit about some trends we've seen at least in my area and the Midwest where on a lot of displays we've noticed emerging presence of private label, coupled with kind of prominent branding displays on the end game.

Speaker Change: Wondering if that's something that you guys are seeing kind of across your categories and if that's perhaps supporting some of the strong market share trends, we continue to see in private label.

Steve Oakland: You know, I think our retail partners are listening to their consumer, right? Their consumer, at least a segment of their consumer, is really looking for value. And so, private label is a way for them to do that. And if you look at the current price gaps, you can see that the retailer is investing in private label value, the value proposition, right? So, I think you have to put that all together.

Steven Oakland: You know, I think our retail partners are listening to their consumers, right? Their consumers, at least a segment of their consumers, are really looking for value. And so Private Label is a way for them to do that. If you look at the current price gaps, you can see that the retailer's investing in Private Label value, the value proposition, right? So I think you have to put that all together, and I don't think it's a Midwest thing. I think it's a national thing, quite frankly. What we see is that the Private Label is that arrow in the quiver.

Speaker Change: Sure.

I think our retail partners are listening to their consumer right in their consumer or at least a segment of their consumers really looking for value and so private label is a way for them to do that if you look at the current price gaps you can see that the retailers are investing in private label value the value proposition right. So I think you have to have to put that all.

Steve Oakland: I don't think it's a Midwest thing. I think it's a national thing, quite frankly. What we see is the private label is that arrow in the quiver to provide value. And you know, it's positioned really well with quality, assortment, and price. And so, I think you'll see that merchandising continue.

Speaker Change: Together and I don't think its a Midwest thing I think it's a national thing quite frankly.

Speaker Change: What we see is the private label is that arrow in our quiver to provide value and is positioned really well with quality assortment and price and so I think youll see that merchandising continue so.

James Salera: So I think you'll see that in the merchandise. Okay, that's helpful. And then maybe as a follow-up to that, do you have any idea why the shift to private label has also been kind of a channel shift away from traditional retail towards, you know, dollar and more value-oriented channels? As we think of your customer exposure, are there any channels that you're either under penetrated or over penetrated in that we should think about, you know, as consumers shift their channel shopping, even if it's in the near term, that's maybe a tailwind or headwind relative to your portfolio?

Jim Celera: Okay, that's cool. And then maybe as a follow-up to that, do you have one of the shifts to private label? It's also been kind of a channel shift away from traditional retail towards, you know, dollar and more value-oriented channels. As we think of your customer exposure, is there any channels that you're either under-penetrated or over-penetrated that we should think about, you know, as consumers shift the channel shopping even if it's in near-term, that's maybe a tailwind or headwind relative to your portfolio? You know, I would say you're right. It's going to Mass, right? If you look at where the share gains have been, right?

Speaker Change: Okay. That's helpful and then maybe as a follow up to that.

Speaker Change: Do you have a.

Speaker Change: One of the shifts to private label has also been kind of a channel shift away from traditional retail towards dollar and more value oriented channels.

Speaker Change: As we think of your customer.

Speaker Change: Customer exposure is.

Speaker Change: Is there any channels that you're either underpenetrated or over penetrated that we shouldn't think about as consumers shift the channel shopping habits in the near term, that's maybe a tailwind or headwind relative to your portfolio.

Steven Oakland: You know, I would say you're right, it's gone to mass, right? If you look at where the share gains have been, right? It's been mass, hard discount, those kinds of things. We're represented really well in those channels. I mean, we have a core grocery business that we think a lot of, and you know, those retailers are probably the ones where you're gonna see the most leverage of private labels. So we've got a pretty nice balanced distribution base at this time, so we feel really good about it.

You know.

Speaker Change: I would say youre right its going to mass right. If you look at where the share gains have been right. It's been mass hard discount those kinds of things.

Steve Oakland: It's been mass hard discount; those kinds of things. We're represented really well in those channels. I mean, we have a core grocery business that we think a lot of. And, you know, those retailers are probably the ones where you're going to see the most leverage of private labels. So, we've got a pretty nice balanced distribution base at this time. So, we feel really good about it. We have seen that coming, and I would tell you that we talk about sales pipeline. That's a place we've leaned in, right, to balance that and the number of the wins that you're seeing are going to be in those channels where we know there's growth right now.

Speaker Change: We're represented really well in those channels I mean, we have a core grocery business that we think a lot of.

Speaker Change: And.

Speaker Change: Those retailers are probably the ones, where youre going to see the most leverage with private label. So we've got a pretty nice balanced distribution base at this time. So we feel really good about them, we have seen that coming in I would tell you that we talk about sales pipeline. That's a place we've leaned in right to balance that and the number of the ones that youre, saying youre going to be in those channels.

Steven Oakland: We have seen that coming, and I would tell you that we talk about the sales pipeline. That's a place we've leaned in, right, to balance that, and the number of wins that you're seeing are gonna be in those channels where we know there's growth right now. So that's the nice thing about a pipeline of that size; we can lean in or lean out in certain places to try to manage that.

Speaker Change: We know Theres growth right now so that's a nice thing about our pipeline. The size. We can we can lean in or lean out in certain places to try to manage that.

Steve Oakland: So, that's a nice thing about a pipeline that we can lean in or lean out in certain places to try to manage that.

Unknown Executive: Okay, great.

James Salera: Okay, great. Thanks for calling us. I'll hop back in with you.

Okay, great. Thanks for the call I guess I'll hop back thanks, Jim.

Unknown Executive: Thanks for the progress.

Unknown Executive: I hope I can improve.

Speaker Change: Sure.

Unknown Executive: This concludes our Q and A session.

Operator: This concludes our Q&A session. I would now turn the conference back over to Steve Oakland for his closing remarks.

Speaker Change: This concludes our Q&A session I would now turn the conference back over to Steve Oakland for any closing remarks.

Steve Oakland: I would now turn the conference back over to Steve Oakland for the closing remarks. Well, I just like to thank everyone for being with us today. I know it's a dynamic moment given, you know, all of the things going on in the public markets. But I'd reiterate that I think we're positioned really well, and I'm really pleased and proud of the team.

Steven Oakland: Well, I'd just like to thank everyone for being with us today. I know it's a dynamic moment given, you know, all of the things going on in the public markets. But I'd reiterate that I think we're positioned really well, and I'm really pleased and proud of the team. And I look forward to being with you three months from now when we share the pivot that's happening here at Treehouse. Have a great day!

Steve Oakland: Well I'd just like to thank everyone for being with US today I know, it's a dynamic moment given all of the things going on in the public markets, but.

Speaker Change: I'd reiterate though I think we're positioned really well and I'm really pleased and proud of the team and I look forward to being with you three months from now when we share the.

Steve Oakland: And I look forward to being with you three months from now when we share the pivot that's happening here at Treehouse. Have a great day. Thank you.

The pivot that's happening here at Treehouse.

Speaker Change: Good day.

Operator: Thank you. This concludes today's conference call. You may now disconnect.

Speaker Change: Thank you. This concludes today's conference call you may now disconnect.

Unknown Executive: This concludes today's conference call. You may now disconnect.

Speaker Change: Yeah.

Speaker Change: Okay.

Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.