Q3 2025 Conagra Brands Inc Earnings Call - Q&A
Speaker Change: [music].
Uh huh.
Right.
No.
Okay.
Yeah.
[music] Sars.
Bob.
No.
Speaker Change: Good morning, and welcome to the Conagra Brands' third quarter fiscal 2025 earnings conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity for questions.
Speaker Change: To ask a question you May press Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Matthew <unk> Senior director of Investor Relations for Conagra brands. Please go ahead.
Speaker Change: Good morning, everyone and thank you for joining us today once again I'm joined this morning by Shaun Connolly, our CEO and Dave Martin our CFO.
Speaker Change: We may be okay. So we may be making some forward looking statements and discussing non-GAAP financial measures during this session.
Speaker Change: Please see our earnings release prepared remarks presentation materials and filings with the SEC, which can be found in the Investor Relations section of our website for more information, including descriptions of our risk factors GAAP to non-GAAP reconciliations and information on our comparability items.
Speaker Change: I'll now ask the operator to introduce the first question.
Speaker Change: First question will come from Andrew Lazar with Barclays. Please go ahead.
Andrew Lazar: Great. Thanks, so much appreciate it.
Sean: Sean I realize there's.
Sean: Still one quarter to go in the fiscal year macro dynamics make for obviously, a super challenging environment in which to forecast I think but at Cagny you mentioned, a few items as it related to fiscal 'twenty six including the higher brand spending already being in the base for next year.
Sean: 4% of cost of goods is productivity.
Sean: And a 50 <unk> week with the wildcard I think being where inflation lands.
Sean: So I was hoping I guess you could at least bring us through your thoughts even at high if high level.
Sean: We think about next year at this stage knowing you know much is still subject to change and I guess I asked this in the context of some other sort of fiscal year reporters, having already indicated not to expect much growth next fiscal year due to the need for greater reinvestment yet in conagra's case as you pointed out in the prepared remarks consumption trends have been steadily improving so thanks a lot.
Sean: Okay. Good morning, Andrew Let me, let me try my best to answer that as you know, we don't provide fiscal year guidance for any forthcoming year until our Q4 call that precedes it so that wont officially happened to July and given the macro environment you cited this year.
Sean: Is extraordinarily dynamic so we will definitely take advantage of the time between now and then see where the dust settles on a number of these external things. We are monitoring that said you are already equipped with some of the puts and takes number one consumer pull for our products remain.
Sean: Strong and a lot of the spend is as you pointed out is in the base number two inventories are being rebuilt.
Sean: Some of the higher costs associated with recent supply chain constraints will linger into Q1.
Sean: Three we don't expect a Hebrew national repeat in Q1 and four we don't expect this year's second half supply constraints.
Sean: To repeat in <unk> next year, but and this is the big but five.
Sean: We are still monitoring inflation tariffs consumer sentiment and the need for pricing. So overall too early to give you an outlook at this juncture.
Sean: Okay understood and then really just second if you could go into a little more detail on the differential or the gap between shipments and consumption in our in the grocery.
Sean: Grocery space, just because that was the area, where there was the biggest differential and frankly came in below what I think many had modeled versus obviously refrigerated and frozen. Thanks. So much.
Sean: Yes, let me hit on that the prepared remarks were really focused on the gap between shipments and consumption. That's tied to the supply constraints, which is really a frozen concept what youre seeing in the grocery and snacks concept is a bit different which is in grocery snacks. This year more seasonal holiday season, what I'll call seasonal slash holiday shipments.
Sean: Sell into Q2 versus last year were more fell into Q3, because holidays, where later this year, but overall if you look at the six month pattern in grocery and snacks, it's pretty normal there is nothing out of the ordinary there. So so overall the quarter came out for us very consistent with what we.
Sean: We laid out for folks when we spoke about it in Cagny and that includes grocery and.
Sean: And snacks, where theres, just some shipment timing, where some of the holiday slash seasonal shipments were a little bit different quarter by quarter this year versus last year, but overall consumption.
Sean: At the company level remains strong.
Sean: That's what we've been focused on that.
Sean: Thats really what youre seeing there.
Sean: Got it thank you.
Ken Goldman: The next question will come from Ken Goldman with Jpmorgan. Please go ahead.
Speaker Change: Just on the subject of grocery and snacks.
Speaker Change: I appreciate that certain elements of that business, including meat snacks are sold.
Speaker Change: Maybe a little more heavily in convenience stores than traditional packaged food I'm just wondering.
Speaker Change: Some of the data that we're getting on C stores is not ideal right now I'm just curious if that had any kind of impact versus your prior expectations on any of your product and maybe the overall grocery and snacks segment this quarter.
Ken Goldman: Yeah. Good question, Ken Let me try to demystify that for you a little bit first of all overall Q3 unfolded in a manner that was very consistent with what.
Ken Goldman: We updated everybody on when we were at Cagny and that includes grocery and snacks.
Speaker Change: The thing you are noticing in grocery snacks as Andrew just pointed out is that that gap between shipments and consumption consumption overall, the company level and at <unk> in general remained pretty strong, but there was a gap and it was really way shipments fell last year versus this year and last year more was in Q3 of this year more is in Q2. So that's it in terms of consumption overall.
Speaker Change: All for our company as you saw in the prepared remarks consumption remains incredibly strong which is really terrific to see now if you ask me to dig within a strong overall consumption where are there spots that are weaker certainly on a channel perspective C store.
Speaker Change: As a channel can have its challenges when the consumer gets stretched and we have not been immune to that this year, nor have our competitors and so there is some channel shifting going on C store relative to its normal performance is a bit weaker that's certainly impacting our portfolio, but as you can see the total scanner data we tend to make that up in other channels. So our total.
Speaker Change: Consumption remains incredibly strong the only other thing I'll point, you to is that within parts of the dollar channel and not every competitor or every retailer within the dollar channel is performing equally there are some spots better I'll, just say that are weaker than others that so we've had some of that.
Speaker Change: Actually some non measured.
Speaker Change: That shows up in shipments, but not material at all on our overall consumption basis for the company, which you saw was strong.
Speaker Change: Great I'll pass it on thanks, Sean.
Speaker Change: Yeah.
Speaker Change: The next question will come from Lee Giordano with Goldman Sachs. Please go ahead.
Lee Giordano: Good morning, and thank you for taking my question I know, it's a little early still for 2026 guidance as you pointed out but I just wanted to see if you could comment on your confidence in hitting your leverage target of three times by the end of next year I guess what are the key risks do you see at this point and how do you think about the.
Speaker Change: <unk> from <unk>.
Speaker Change: Debt Paydown versus just an acceleration in the business.
Speaker Change: Yes, Lee this is Dave.
Speaker Change: Yes. So as you saw in Q3, we're really pleased with our cash flow performance, our free cash flow conversion was 125%, we paid down $5 billion of debt. The last 12 months. So we expect the cash flow to continue to be strong and continue to pay down debt.
Speaker Change: We will update kind of where we are with the three times leverage target by the end of next year. When we give guidance for July obviously, that's impacted by earnings in the denominator, but.
Speaker Change: So we'll see where we are there, but the cash flow is strong we expect it to continue to be strong and our priority with that cash flow is to pay down debt. So that will continue and then we will see where we are with that leverage target. When we give guidance in July for fiscal 'twenty six.
Speaker Change: Great. Thank you that's helpful. And then just as were kind of talking about cash flow. It looks like you lowered your capex guidance for this year by about $40 million just seeing if you could provide more detail on what was removed or delayed from the budget and really does this mean that we should anticipate a higher than normal Capex next year and then just.
Speaker Change: Maybe while we're on the topic and given we've had these recent plant issues. Just maybe have you changed how you think about maintenance capex at all thank you.
Speaker Change: Yes, so yes.
Speaker Change: <unk>.
Speaker Change: Update in capital for this year is all timing. So just in terms of the cash impact of capital more of that is shifting into next fiscal year. So we won't give a specific guidance number on capex next year, but you can expect that that will bounce back up to kind of levels, where we started this year and thats not and.
Speaker Change: Usual with projects that you have timing can slip and so thats just simply timing, it's not a result of us kind of cutting anything or doing anything in terms of maintenance capital. We have a very robust process for allocating maintenance capital and making sure that all of our operations.
Speaker Change: <unk> capital that they need to keep the operations running and be efficient and situations that we've had with our chicken operation when we find things we prioritize fixing the root issues. In this case, we're going through a full modernization of that plant and and we are estimating that we will be done.
Speaker Change: That by August so.
Speaker Change: We always prioritize maintenance capital and that's no different than the way we've always handled it yes, just to add a little more color on the maintenance capital piece. We are in the midst of a multi year effort to kind of modernize our supply chain la heavily our chief supply chain officer laid that program out.
Speaker Change: At Cagny, a little over a year ago, and we've made tremendous investments in maintenance capital to modernize our facilities, including planned major capital investments in the frozen facility that makes our work in process chicken as I pointed out at Cagny, we didn't quite get all the way to get implementing that project because we ran into some <unk>.
Speaker Change: Quality and consistency issues before we got started so we've had to deal with that a little bit earlier than we expected it's coming at a cost obviously disrupted our service, but but I just want to emphasize that the investment plans have been in flight on the modernization of our network for multiple years now and remain robust.
Speaker Change: Great. Thank you.
Tom Palmer: The next question will come from Tom Palmer with Citi. Please go ahead.
Speaker Change: Good morning, and thanks for the question.
Speaker Change:
Speaker Change: I guess just to start off I wanted to ask on the fourth quarter, you noted that persistence of higher inflation, which seems too.
Speaker Change: Maybe a little bit incremental to <unk> it.
Speaker Change: It sounds like tariffs at least.
Speaker Change: You were able to comment on arent, a big swing item, but they probably don't help and then at least relative to consensus estimates sales came in a bit light.
Speaker Change: But youll also reiterated your annual outlook. So are there incremental maybe tailwind to be thinking about when we look towards <unk> that drive that inflection. Thank you.
Speaker Change: I'll make one comment and flip it to Dave as.
Speaker Change: As I mentioned earlier to Andrew and Ken Q3, unfolded in a manner largely consistent with what we expected when we spoke to investors at Cagny and given that there is obviously not a lot of contemplation to changing kind of what we anticipate in Q4, but I think.
Speaker Change: The big thing that we have to do and I understand everybody on this call today is really eager to get some perspective on how is next year going to unfold, we got to see where the dust settles on these external factors because that is that is the biggest variable we are dealing with right now we've already been dealing with inflation that really it.
Speaker Change: Not abated. So we we've had record inflation over the last few years, we've still been at higher inflation. This year than we expected when we went into the year and now we're looking at potential factors that could exacerbate that and what are the follow on actions that we are going to have to take its too early to tell obviously, how the dust is going to settle there but.
Speaker Change: But that's going to be a factor for us and things are moving around quite a bit there are things like vegetables that we import from Mexico that we at one point, we thought maybe that would be an issue where maybe there is an exemption there. But then maybe there are other things that become an issue. So things are moving around not only on a weekly or daily basis, but on an hourly basis right now.
Tom Palmer: We've got to see where all the dust settles on that so we can really pin down next year to the best of our abilities and give you the guidance that is going to be as helpful. As you as we can we can give david anything yet so just Tom real quick just the building blocks for our Q4, we expect consumption to continue to be strong and through Q4.
Tom Palmer: We expect our shipment volumes to improve versus Q3, as we improve our service levels, we are improving our service levels on birds eye and our frozen meals with chicken.
Tom Palmer: Expect improvement in gross margins in Q4 versus Q3, because remember in Q3, we were negatively impacted by the supply disruptions and the disruption to our operations. So absorption in this quarter negative absorption was very high and then just some of the onetime costs, we had because when you shut.
Tom Palmer: And operation It does get your costs. So we do expect improvement in Q4 versus Q3, and then you saw that we had a trade estimate.
Tom Palmer: <unk> in Q3, so we don't expect trade to have as much of an impact on margin in Q4 versus Q3, and our SG&A will be favorable in Q4 versus the prior year. So they are really the key building blocks.
Tom Palmer: Alright, thank you for that.
Tom Palmer: Just on the.
Tom Palmer: I guess <unk> question with tariffs you noted the veggies for Mexico.
Tom Palmer: Are there other major items, we should be thinking about that you traditionally.
Tom Palmer: <unk> really important and then beyond just I guess raw materials are their finished goods sold in the U S that are sourced overseas. Thank you.
Tom Palmer: Yes, I'll just give you a little commentary on that we buy obviously a lot of stuff that goes into our products.
Tom Palmer: Much of it is sourced in the U S, but when we cannot find the supply in the U S.
Tom Palmer: I think chipotle in avocados things like that we will source. It elsewhere. So I mentioned vegetables out of Mexico, we buy a lot of tin plate steel for our cans outside the U S. Because something like 75% of the tin plate steel lines in the U S have been eliminated since 2018, leaving manufacturers in a position where they are.
Tom Palmer: No choice, but to source these things overseas, we kind of fall into that camp.
Tom Palmer: But things are moving so yesterday I might have thought there could be an issue with vegetables coming in from Mexico, and maybe that's not going to be an issue, we'll see but today, maybe there is an issue on things like palm oil that wasn't on the radar as squarely yesterday. So things are moving around I am not going to give you a definitive list right now because of the volatility of the.
Tom Palmer: <unk>, but as you know running a business you have to be able to have some stability in your assumptions right now.
Tom Palmer: The assumptions that we're making are moving around a bit we're tracking them by the minute and as soon as we kind of see the dust settle we'll rack. It all up give you our outlook and that will be when we're in a position to give you. The best guide for the coming year anything you'd add to that Dave Yes no.
Tom Palmer: Our manufacturing what we sell in the U S is really manufactured in the U S. So as Sean said.
Tom Palmer: What we're looking at is our materials and materials that we would have to bring in from outside of the U S. Just because they're not available in the U S.
Tom Palmer: Great. Thanks, guys I know it's a.
Tom Palmer: Very evolving situations. So I appreciate the color.
Tom Palmer: The next question will come from Chris Carey with Wells Fargo. Please go ahead.
Tom Palmer: Hey, guys quick follow up on Q4 and then.
Tom Palmer: A little bit of a follow up on the broader macro backdrop just in Q4.
Tom Palmer: You had said that the shipments would come at a higher cost.
Tom Palmer: But you also expect gross margins to improve.
Tom Palmer: In the quarter in Q4 relative to Q3, what is kind of a gap there it's better productivity the incremental pricing on a protein can you maybe just help a little bit more context there.
Tom Palmer: Yeah, Chris as I mentioned, we have pretty negative absorption, which has impacted our cost in Q3, which will get better in Q4, but also.
Tom Palmer: Incremental costs, we're incurring with third party commands to get our inventories back we've actually started incurring in Q3. So that will continue in Q4, but it's consistent so it's not it's not incremental to Q3.
Tom Palmer: And that will continue through Q1 of fiscal 2006, the using the third party come in.
Tom Palmer: Okay.
Tom Palmer: And then this is.
Tom Palmer: A slightly unfair question, but just following up on the prior line of thinking.
Tom Palmer: When you think about the uncertainty in the current environment going into fiscal 'twenty, yes.
Tom Palmer: How much of that is associated with you guys.
Tom Palmer: The top line the consumer.
Tom Palmer: Our response to this environment relative to your cost structure.
Tom Palmer: I don't know if theres, a way to kind of parse that out, but clearly theres a consumption angle to this and there is also the kind of tariff and cost angle.
Tom Palmer: I wonder if there's any way to frame the relative impact of either at this point.
Tom Palmer: Well.
Tom Palmer: I won't comment on next year, Chris, but let me just let me give some perspective on this year and kind of what our stance has been for the last year obviously.
Tom Palmer: Management teams are always trying to simultaneously drive acceleration of growth and gross margin expansion. So we in normal times, we want them, both and we want them both right now.
Tom Palmer: About a little over a year ago, we said look they may not come in at the same time, so if you've got to prioritize.
Tom Palmer: Getting volume back to growth versus <unk>.
Tom Palmer: Continued gross margin expansion, how do you prioritize and we said we're going to plant the flag and say returning volume to growth is the most important thing for the long term value creation of the company we have to keep the relationship between the consumer and our brands and we made the investment to do that and we've seen very strong connectivity between the consumer and our brands obviously.
Tom Palmer: Has pressured.
Tom Palmer: Gross margins for us and for the industry and so now as we as we start to think about what's coming next year I think we're in for another year, where we've got we're going to have our hands full in terms of continuing to drive growth and continuing to drive.
Tom Palmer: Margin expansion and that's that's what we're going to do between now and July when we guide and say, what's the strongest plan, we can put together.
Tom Palmer: On both metrics.
Speaker Change: Okay, alright, thanks, a lot.
Speaker Change: The next question will come from Yasmine <unk> with Bank of America. Please go ahead.
Speaker Change: Good morning, everyone. Thanks for the question.
Speaker Change: I just have a question for you.
Speaker Change: Just specifically on cost inflation.
Speaker Change: In your prepared remarks, you mentioned, taking pricing and supernational to offset protein inflation and I believe there was a comment made previously on the expectation of deflation in corn crop based inputs. So I guess at this point is the expectation for fiscal 2006 to be higher than fiscal 2005 year to date.
Speaker Change: Have any updated thoughts there thanks.
Speaker Change: Yes, we're not as we mentioned, we're not going to give any insight on fiscal 'twenty six until our July call.
Speaker Change: There's a lot of things moving around right now candidly.
Speaker Change: You saw for the quarter, our inflation came in around 4% which is.
Speaker Change: Where we expected it debate and we had guided for for that for the full year or so.
Speaker Change: Right now, we're just looking as Sean said looking at all the dynamics and kind of the impact that it may have and then we'll we'll update further in July, but I'm not going to comment any more on inflation for next year.
Speaker Change: The big thing to take away is that.
Speaker Change: It's still 4% we've had record inflation over the last few years and there are some folks that thought things would go backwards that has not happened in this quarter, we're still looking at 4% and some of the external things that we're talking about are incremental above.
Speaker Change: Above and beyond that if the baseline doesn't move so that's what we've got to see shake out.
Speaker Change: Obviously, if we have to deal with some of these external factors, we're going to have a number of levers available to us that we typically push on we'll look at our productivity programs and can we squeeze more out of that we will look at alternative suppliers can we get a better price elsewhere, and we will look at pricing everything is on the table.
Andrew Lazar: Okay, great. Thank you and I just have a quick follow up and it's more of a clarifying question off of Andrew's question earlier, so the gap in grocery and snacks. Some of that is unfavorable mix some of that is trade spend.
Andrew Lazar: So is the remaining of that mix isn't just Swiss Smith, what other whatever other products was that that kind of drove that delta.
Andrew Lazar: I think you just hit on pretty much all of it.
Andrew Lazar: GAAP between shipments and consumption in grocery and snacks I already hit that pretty hard that was really just a waste shipments fell last year more of them in Q3, and this year more of them in Q2.
Andrew Lazar: That's really if you understand the trade adjustment anything else, David Yes, no and we talked about like Swiss Miss the consumption was really strong in Q3. So when you look at consumption versus shipments. That's just the seasonality of that business right you ship. It and then they can assumption and it really depends on.
Andrew Lazar: On the weather and when people want to buy it and so yes those shipments went in Q2.
Andrew Lazar: And retailers thought more consumption would have occurred in Q2, the weather didn't cooperate but it did come in Q3. So I always say winter always comes it came in Q3 and just it just pushed more of the gap is one of the contributing factors between the gap between shipments and consumption as it fell in the third quarter.
Andrew Lazar: Okay. Thanks, guys.
Andrew Lazar: Thanks.
Speaker Change: Next question will come from Alexia Howard with Bernstein. Please go ahead.
Alexia Howard: Good morning, everyone.
Alexia Howard: Hi, good morning.
Speaker Change: So a couple of quick questions first of all can you comment on any recent changes in the state of the consumer and behaviors that are shifting we've been hearing from others that things might have deteriorated in the last eight weeks also I know you mentioned C stores.
Alexia Howard: Yes, any comments about shifts.
Speaker Change: Well actually we've been.
Speaker Change: Talking about these these behavior shifts for about two years now where you've got.
Speaker Change: Stretched household balance sheets, you've had value seeking behavior people seeking tradeoffs. So that's that's been in place and it's been everything from the beginning around things like more use of leftovers things like that so that that has been with us we invested to kind of overcome some of those challenges and obviously you've seen tremendous responsiveness.
Speaker Change: And especially in our frozen business since we started making those investments, but I think I think it's really more of <unk>.
Speaker Change: Just a continuation of a challenged consumer balance sheet, where they are stretched and so we've been incentivizing them with good innovation and some low discount high quality promotions to drive consumption and you can see it in our numbers, but theyre being very discerning I anticipate.
Speaker Change: That's going to continue.
Speaker Change: We see prices in food or elsewhere go up further I think youre going to see.
Speaker Change: More trade down behaviors, and I think it'll be the typical stuff I think.
Speaker Change: The first thing you'll see is discretionary purchases will weaken foodservice trends will weaken and then within at home meeting I think youll see a lot of that.
Speaker Change: Value seeking behavior. So we're very well positioned to compete in that environment. As we pointed out at Cagny frozen foods are doing quite well right now and obviously, we're the world's biggest frozen company and then within Snacking importantly, we're very protein centric and healthy permissible snacking and so we've got one of the stronger snack portfolios right now.
Speaker Change: And that's that is helping us navigate some of these.
Speaker Change: Challenging consumer times as well.
Speaker Change: Thank you and as a follow up I know you've got a lot on your plate right now with everything going on but there seems to be a lot of activity at the state level to introduce bands or labeling requirements on certain additives that seems to be bubbling up in a lot of different states now.
Speaker Change: Is that going to be a major button headache for you or is it going to be fairly straightforward to accommodate all of that.
Speaker Change: Well <unk> you are you are now hitting on why when I talk about the things we're monitoring externally. It's plural it's not one thing it's not tariffs. It's a variety of things so added to the list.
Speaker Change: External factors, we are we're monitoring the good news for the Conagra portfolio in regard to that one in particular is as I pointed out at Cagny.
Speaker Change: Some number materially over 90% of our portfolio doesn't have any synthetic dyes are food colouring in our in our products. So it's really not a big deal for us.
Speaker Change: We do have to monitor it because state by state legislation is very difficult for manufacturers to deal with we'd rather have.
Speaker Change: Federal singular voice on this so we can adapt and be as agile as we can but when youre dealing with with state level legislation. It makes it more challenging for manufacturers to have to try to tailor stuff to individual states, so but with respect to.
Speaker Change: Food.
Speaker Change: <unk> and colors in general that's not a we don't have a lot of in our portfolio, it's not a material concern.
Speaker Change: Thank you very much I'll pass it on.
Speaker Change: The next question will come from Megan Clap with Morgan Stanley. Please go ahead.
Megan Clap: Hi, good morning. Thanks, So much maybe just a quick follow up on <unk> I think the guide maybe implies org sales somewhere around around flattish.
Speaker Change: It looks like consumption, which makes sense just given the supply chain challenges has trended a bit lower in the most recent period. So you know as you talked about volumes, improving youre going to get a shipment benefit from the restock of retail inventory, but maybe can you just help us unpack the underlying expectation as it relates to.
Megan Clap: Consumptions in the context of flattish shipments in the fourth quarter that would be helpful. Thank you.
Megan Clap: Well I just I think the way to think about the shape of consumption is when you have supply constraints.
Megan Clap: As long as the underlying consumer pull remains strong consumption will remain strong until your inventory position weakens and so obviously because we've had limited inventory the inventory position has begun to weaken that'll lead to out of stocks on the shelf and that will start to show up.
Megan Clap: As weakness in consumption, but unlike what youre seeing from some companies on the consumption line right now I think.
Megan Clap: <unk> don't need to have a lot of anxiety, if you see that weakness in our consumption because it will not be connected to weakened consumer pull it'll be weakened.
Megan Clap: Be about we can supply and inventory levels that too will pass because we have <unk>.
Megan Clap: Invested now too to rebuild those inventories, but that'll be the shape of the curve is consumption will be strong until our inventory position weakens then it will weaken for a little bit and then it will rebound.
Megan Clap: <unk> already hit the shipment flow and how that works and there is a Q4 impact because of the timing of the Easter holiday. So youre seeing some negative consumption now because Easter was earlier last year than this year. So.
Megan Clap: Yes. So we expect continued strength in consumption for Q4 like we've seen.
Speaker Change: Got it that's helpful. Thanks, and maybe just a couple of housekeeping.
Speaker Change: Items. The I don't think I saw an updated guide for leverage for this year is it still I think 355 is what you told us at Cagny or is it maybe a bit better given the lower Capex Guide and then the second would just be on equity method earnings I think they were a bit better in the quarter at least versus what consensus is modeling is that just timing.
Speaker Change: Is $1 50 kind of still the right number for the year.
Speaker Change: Yes, we've held both of those for the year, we haven't changed.
Speaker Change: Okay. Thank you.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: The next question will come from Max <unk> with BNP Paribas. Please go ahead.
Speaker Change: Okay. Thanks for the question Youre snack volumes were up 4% in <unk>.
Speaker Change: Stands in contrast to what we're seeing for the administrative really we're seeing that some categories under pressure.
Speaker Change: So our total snack performance was helped by by weather as it relates to the Swiss Miss business space. It looks like your volume growth came from several of your key brands. So I was hoping you could provide a bit more color on what youre seeing in snacking with regard to the broader industry weakness and then what you think is helping your business outperform thanks very much.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: And for those who are tuning in to this call who did not tune into Cagny I would direct you to Bob no one's presentation on the future of frozen in the future snacking because it was it was.
Speaker Change: Chock full of interesting insights on both of those businesses with respect to snacking. It's a fascinating time, because snacking is enormous I don't know 80 billion plus industry in the U S and historically a lot of that volume and snacking is in traditional chips, but there is a movement afoot and snacking right now toward healthier.
Speaker Change: <unk> away from carbs, and and more toward protein and protein dense snacking and that's effectively our business. Our business is highly concentrated in protein and fiber so between meat snacks and popcorn you've got two very on trend businesses not to mention our seeds business, which is.
Speaker Change: Sometimes overlooked but it's a phenomenal very profitable business, we happen to have a lot of horses that are in the right Caddock subcategories, right now and Theyre doing pretty well and part of the strong number that you just referenced Max was Swiss Miss being particularly high I wouldn't get overly excited about that that's timing because obviously Swiss miss was down last quarter.
Speaker Change: The weather, but the underlying performance in our snacks business relative to the broader space that youre pointing out remains very strong and I would attribute it to the right.
Speaker Change: <unk> and the right brands and just a quick.
Speaker Change: Public service announcement on our new acquisition of fatty smoked meat sticks or fatty business is now fully integrated its doing extremely well, it's getting incredible residents with our retail customers and if you have not eaten a fatty meat stick yet I encourage you not just to eat one but side by side versus some of the other new players on the market.
Speaker Change: And I think youll see that we win the taste test our hands down.
Speaker Change: Great. Thanks, very much I'll leave it there.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. <unk> for any closing remarks. Please go ahead Sir.
Speaker Change: Thank you Chuck and thank you all for joining US today, please reach out to Investor relations with any additional questions have a great day.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Tom.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Thanks.
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: And then that is my question.
Speaker Change: <unk>.
Speaker Change: There was so many now for many of that is for the temptation there were so many nights.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Miami.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Mike.
Speaker Change: <unk>.
Speaker Change: And then.
Speaker Change: Humana.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Yes.
Speaker Change: Yes.
Adam.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Yes.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Kevin.
Speaker Change: Just on the funding.
Speaker Change: I think so.
Speaker Change: <unk>.
Speaker Change: And how does down.
Speaker Change: The highest dose.
Speaker Change: Yes Gabe.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Yeah.