Q2 2026 Maple Leaf Foods Inc Earnings Call

August 12, 2026

Operator: Good morning, everyone. Welcome to Maple Leaf Foods' Q2 2026 financial results conference call. As a reminder, this conference call is being webcast and recorded. Please note that there will be a question and answer session following the formal remarks. Instructions for participating in the Q&A will be provided following the conclusion of the formal presentation. I would now like to turn the conference call over to Omar Javed, Vice President of Investor Relations at Maple Leaf Foods.

Operator: Good morning, everyone. Welcome to Maple Leaf Foods' Q2 2026 Financial Results Conference Call. As a reminder, this conference call is being webcast and recorded. Please note that there will be a question and answer session following the formal remarks. Instructions for participating in the Q&A will be provided following the conclusion of the formal presentation. I would now like to turn the conference call over to Omar Javed, Vice President of Investor Relations at Maple Leaf Foods.

Speaker #1: Please note that there will be a question-and-answer session following the formal remarks. Instructions for participating in the Q&A will be provided following the conclusion of the formal presentation.

Speaker #1: I would now like to turn the conference call over to Omar Javed, Vice President of Investor Relations at Maple Leaf Foods.

Speaker #2: Thank you, and good morning, everyone. Before we begin, I would like to remind you that some statements made on today's call may constitute forward-looking information, and our future results may differ materially from what we discuss.

Omar Javed: Thank you, and good morning, everyone. Before we begin, I would like to remind you that some statements made on today's call may constitute forward-looking information, and our future results may differ materially from what we discuss. Please refer to our Q2 2026 MD&A and financial statements and other information on our website for a broader description of operations and risk factors that could affect the company's performance. We have also uploaded our Q2 2026 investor presentation to our website. As always, the investor relations team will be available after the call for any follow-up questions you may have. With that, I will turn the call over to our President and CEO, Curtis Frank.

Speaker #2: Please refer to our second quarter 2026 MD&A and financial statements and other information on our website for a broader description of operations and risk factors that could affect the company's performance.

Speaker #2: We've also uploaded our second quarter 2026 investor presentation to our website. As always, the Investor Relations team will be available after the call for any follow-up questions you may have.

Speaker #2: With that, I'll turn the call over to our President and CEO, Curtis Frank.

Speaker #3: Okay, thank you, Omar, and good morning, everyone. Joining me today is our Chief Financial Officer, David Smails. I'll begin our call this morning with the key messages from the quarter.

Curtis Frank: Okay. Thank you, Omar, and good morning, everyone. Joining me today is our Chief Financial Officer, David Smales. I will begin our call this morning with the key messages from the quarter, provide a strategic and operational update, and share some context for how we see the balance of the year playing out. Dave will then review the financial results and balance sheet in more detail, and I will return after his remarks to offer a few closing thoughts before we open the line for your questions. The headline today is straightforward. Disciplined execution continues to strengthen our business, and we delivered another solid quarter. We grew revenue for the seventh consecutive quarter, expanded adjusted EBITDA margin by 40 basis points to 13.4%, and increased adjusted EBITDA by approximately 5%.

Speaker #3: I'll provide a strategic and operational update and share some context for how we see the balance of the year playing out. Dave will then review the financial results and balance sheet in more detail, and I will return after his remarks to offer a few closing thoughts before we open the line for your questions.

Speaker #3: The headline today is straightforward: the planned execution continues to strengthen our business, and we delivered another solid quarter. We grew revenue for the seventh consecutive quarter, expanded adjusted EBITDA margin by 40 basis points to 13.4%, and increased adjusted EBITDA by approximately 5%.

Speaker #3: Revenue growth moderated this past quarter to 1.6%, primarily reflecting a temporary volume response to pricing in prepared foods, and the roll-off of certain lower-margin private label volumes.

Curtis Frank: Revenue growth moderated this past quarter to 1.6%, primarily reflecting a temporary volume response to pricing in prepared foods and the roll-off of certain lower margin private label volumes. As we expected, pricing actions resulted in a near-term volume response, which is normal for CPG food categories and we expect will normalize as the year progresses. Importantly, strong poultry growth, improved mix, and the full quarter benefit of pricing helped offset lower prepared foods volumes. Within prepared foods, sales declined 2%, but profitability improved. The next phase of our Fuel for Growth program, focused on operational excellence across our manufacturing network, is continuing to deliver the benefits we expected, and our protein snacking innovation platform continues to gain traction, led by Mighty Protein and Greenfield protein kits with distribution gains in Canada, the US, and into new channels such as gas and convenience.

Speaker #3: As we expected, pricing actions resulted in a near-term volume response, which is normal. For CPG food categories, we expect we'll normalize as the year progresses.

Speaker #3: Importantly, strong poultry growth, improved mix, and the full-quarter benefit of pricing helped offset lower prepared foods volumes. Within prepared foods, sales declined 2%, but profitability improved.

Speaker #3: The next phase of our fuel-for-growth program focused on operational excellence across our manufacturing network is continuing to deliver the benefits we expected, and our protein snacking innovation platform continues to gain traction, led by Mighty Protein, and Greenfield Protein Kits, with distribution gains in Canada, the US, and into new channels such as gas and convenience.

Speaker #3: As a result, pricing operating efficiencies and favorable mix more than offset lower volumes and input cost inflation, leading to improved profitability in prepared foods.

Curtis Frank: As a result, pricing, operating efficiencies, and favorable mix more than offset lower volumes and input cost inflation, leading to improved profitability in prepared foods. In poultry, sales increased 7.1%, supported by volume growth, improved channel mix, and favorable pricing. Demand for value-added and sustainable poultry remained resilient. Maple Leaf Prime continued to gain market share, and London Poultry continues to be supportive of improved mix and future growth. We were pleased that both prepared foods and poultry contributed to earnings growth in Q2, where adjusted EBITDA was approximately CAD 137 million, up nearly 5% year-over-year, and our adjusted EBITDA margin expanded by 40 basis points to 13.4%, driven by stronger operating efficiency and better mix across our portfolio. These results demonstrate the continued strengthening of our focused CPG business and the benefits of improved efficiency across our modern manufacturing and supply chain network.

Speaker #3: In poultry, sales increased 7.1%, supported by volume growth, improved channel mix, and favorable pricing. Demand for value-added and sustainable poultry remained resilient, MAPLE LEAF PRIME continued to gain market share, and London Poultry continues to be supportive of improved mix and future growth.

Speaker #3: We were pleased that both prepared foods and poultry contributed to earnings growth in Q2. We're adjusted EBITDA was approximately 137 million, up nearly 5% year over year, and our adjusted EBITDA margin expanded by 40 basis points to 13.4%, driven by stronger operating efficiency and better mix across our portfolio.

Speaker #3: These results demonstrate the continued strengthening of our focused CPG business and the benefits of improved efficiency across our modern manufacturing and supply chain network.

Speaker #3: To summarize where we are at through the first half of 2026, revenue has now increased approximately 4% to nearly 2 billion. Adjusted EBITDA has increased more than 5% to approximately 260 million.

Curtis Frank: Now, to summarize where we are at through the H1 of 2026, revenue has now increased approximately 4% to nearly CAD 2 billion. Adjusted EBITDA has increased more than 5% to approximately CAD 260 million. Our adjusted EBITDA margin has expanded to more than 13%, and we have continued to execute against our disciplined capital allocation priorities, returning CAD 78 million to shareholders through our quarterly dividend, which has increased by 10.5%, and share repurchases under our NCIB. Our H1 performance keeps us on track to deliver our full year 2026 outlook, which we are reaffirming today as we continue to expect mid-single-digit revenue growth for the year, adjusted EBITDA in the range of CAD 520 to CAD 540 million.

Speaker #3: Our adjusted EBITDA margin has expanded to more than 13%, and we have continued to execute against our disciplined capital allocation priorities, returning $78 million to shareholders through our quarterly dividend—which has increased by 10.5%—and share repurchases under our NCIB.

Speaker #3: Our first half performance keeps us on track to deliver our full year 2026 outlook. Which we are reaffirming today, as we continue to expect mid-single-digit revenue growth for the year, adjusted EBITDA in the range of 520 to 540 million, maintaining an investment-grade balance sheet while sustaining a disciplined approach to capital allocation, and capital investment of approximately 160 to 180 million for the full year with spending weighted toward the second half and focused on maintenance, productivity, technology, and automation.

Curtis Frank: Maintaining an investment-grade balance sheet while sustaining a disciplined approach to capital allocation, and capital investment of approximately CAD 160 to CAD 180 million for the full year, with spending weighted toward the H2 and focused on maintenance, productivity, technology, and automation. Now turning to our H2, while we do not provide quarterly guidance, I would like to once again provide some context with respect to how we see the balance of the year playing out. First and foremost, our focus remains on executing our strategic blueprint. Our experienced team is focused on advancing our proven growth strategies and delivering on our productivity playbook, which is active across the business. Food inflation naturally remains an area of active management focus.

Speaker #3: Turning to our second half, while we do not provide quarterly guidance, I would like to once again provide some context with respect to how we see the balance of the year playing out.

Speaker #3: First and foremost, our focus remains on executing our strategic blueprint. Our experienced team is focused on advancing our proven growth strategies, and delivering on our productivity playbook which is active across the business.

Speaker #3: Food inflation naturally remains an area of active management focus. Geopolitical developments continue to affect energy markets and transportation costs, and we are also managing for elevated costs across pork bellies, beef inputs, chicken inputs, turkey inputs, along with packaging and ingredients.

Curtis Frank: Geopolitical developments continue to affect energy markets and transportation costs, and we are also managing for elevated costs across pork bellies, beef inputs, chicken inputs, turkey inputs, along with packaging and ingredients. We have responded through pricing and/or trade program adjustments, promotional optimization, and continued discipline in managing our own costs. While these actions have created a temporary volume response, which is again quite normal in CPG, we do expect trends to normalize as the year progresses. I would also remind you of the seasonality patterns of the new Maple Leaf Foods business following the spin-off of Canada Packers. While revenue is typically lowest in the Q1 and then remains relatively consistent through the balance of the year, raw material input costs are often higher in the H2.

Speaker #3: We have responded through pricing and/or trade program adjustments, promotional optimization, and continued discipline in managing our own costs. While these actions have created a temporary volume response, which is again quite normal in CPG, we do expect trends to normalize as the year progresses.

Speaker #3: I would also remind you of the seasonality patterns of the new MAPLE LEAF Foods business following the spin-off of Canada Packers. While revenue is typically lowest in the first quarter and then remains relatively consistent through the balance of the year, raw material input costs are often higher in the second half.

Speaker #3: This can create some variability in margins from quarter to quarter, as we've seen in recent years, particularly in the third quarter. We view this as normal phasing, and it does not change our full-year expectations.

Curtis Frank: This can create some variability in margins from quarter to quarter, as we have seen in recent years, particularly in the Q3. We view this as normal phasing, and it does not change our full-year expectations. Finally, as we look ahead, our confidence in delivering our full-year outlook is supported by several clear and tangible drivers. Continued strength in poultry, improving volume and revenue trends in prepared foods as pricing effects moderate, growing distribution and velocity across our innovation platform, accelerating sustainable meats growth in the US, relaunching the Yves brand in Canada, and delivering continued operating efficiency through our Fuel for Growth and operational excellence programs. The fundamentals of the business remain strong and our priorities are clear. With that, I will now turn it over to Dave to walk through the financial results in a bit more detail. David?

Speaker #3: And finally, as we look ahead, our confidence in delivering our full-year outlook is supported by several clear and tangible drivers. Continued strength in poultry, improving volume and revenue trends in prepared foods as pricing affects moderate, growing distribution and velocity across our innovation platform, accelerating sustainable meats growth in the US, relaunching the EVES brand in Canada, and delivering continued operating efficiency through our fuel-for-growth and operational excellence programs.

Speaker #3: The fundamentals of the business remain strong, and our priorities are clear. With that, I will now turn it over to Dave to walk through the financial results in a bit more detail.

Speaker #3: David?

Speaker #2: Thank you, Curtis, and good morning, everyone. I'll comment on results for the second quarter before turning to cash flow and the balance sheet. Sales in the quarter were $1.02 billion, an increase of 1.6% compared to last year.

David Smales: Thank you, Curtis, and good morning, everyone. I will comment on results for Q2 before turning to cash flow and balance sheet. Sales in the quarter were CAD 1.02 billion, an increase of 1.6% compared to last year. Sales growth was driven by poultry, where sales increased by 7.1%, partially offset by a decrease of 2% in prepared foods. In poultry, the sales increase was driven by higher food service and retail volumes, improved channel mix, and pricing, which were partially offset by increased trade promotion spending. Prepared food sales declined due to lower volume and increased trade promotion spending, partially offset by pricing, related party revenue, and improved product mix. Adjusted EBITDA of CAD 137.1 million increased by 4.8% versus Q2 of last year, with an adjusted EBITDA margin of 13.4%, improving 40 basis points over the same quarter last year.

Speaker #2: Sales growth was driven by poultry, where sales increased by 7.1%, partially offset by a decrease of 2% in prepared foods. In poultry, the sales increase was driven by higher food service and retail volumes, improved channel mix, and pricing, which were partially offset by increased trade promotion spending.

Speaker #2: Prepared food sales declined due to lower volume and increased trade promotion spending, partially offset by pricing, related-party revenue, and improved product mix. Adjusted EBITDA of $137.1 million increased by 4.8% versus the second quarter of last year, with an adjusted EBITDA margin of 13.4%, improving 40 basis points over the same quarter last year.

Speaker #2: Profitability improved as pricing, better operating efficiency, and favorable mix more than offset input cost inflation increased trade promotion spending and lower volume. SG&A expenses were 104.5 million in the quarter, compared to 99.6 million last year.

David Smales: Profitability improved as pricing, better operating efficiency, and favorable mix more than offset input cost inflation, increased trade promotion spending, and lower volume. SG&A expenses were CAD 104.5 million in the quarter, compared to CAD 99.6 million last year. The increase was driven by the timing of advertising and promotional expenses and higher consulting fees. Earnings from continuing operations were CAD 40.8 million for the quarter, or CAD 0.33 per basic share, compared to CAD 39 million or CAD 0.31 per basic share in Q2 last year. Adjusted earnings were CAD 53.9 million or CAD 0.44 per basic share, compared to CAD 41.4 million or CAD 0.33 per basic share last year. The increase in adjusted earnings was driven by higher gross profit and reduced interest expense due to lower debt levels, partially offset by higher SG&A and income tax expense.

Speaker #2: The increase was driven by the timing of advertising and promotional expenses, and higher consulting fees. Earnings from continuing operations were $40.8 million for the quarter, or $0.33 per basic share, compared to $39 million, or $0.31 per basic share, in Q2 last year.

Speaker #2: Adjusted earnings were 53.9 million, or 44 cents per basic share, compared to 41.4 million or 33 cents per basic share last year. The increase in adjusted earnings was driven by higher gross profit and reduced interest expense due to lower debt levels, partially offset by higher SG&A and income tax expense.

Speaker #2: Capital expenditures were 23.3 million in the quarter, compared to 24.7 million in the same period last year. Year-to-date capital expenditures were 44.6 million compared to 49.8 million last year.

David Smales: Capital expenditures were CAD 23.3 million in the quarter, compared to CAD 24.7 million in the same period last year. Year-to-date capital expenditures were CAD 44.6 million compared to CAD 49.8 million last year. The decrease reflects 2025 spending related to Canada Packers prior to the spin-off, largely offset by an increase in maintenance capital projects this year in continuing operations. Looking ahead, and consistent with our 2026 guidance, we expect capital investments for the full year to be in the range of CAD 160 to CAD 180 million, with spend focused on maintenance and productivity enhancement initiatives. Free cash flow in the quarter was an outflow of CAD 18.9 million, compared to an inflow of CAD 216 million last year. Removing the impact of discontinued operations, which contributed CAD 57.7 million of cash inflow in Q2 of last year.

Speaker #2: The decrease reflects 2025 spending related to Canada Packers prior to the spin-off, largely offset by an increase in maintenance capital projects this year in continuing operations.

Speaker #2: Looking ahead, and consistent with our 2026 guidance, we expect capital investments for the full year to be in the range of 160 to 180 million dollars with spend focused on maintenance and productivity enhancement initiatives.

Speaker #2: Free cash flow in the quarter was an outflow of 18.9 million compared to an inflow of 216 million last year. Removing the impact of discontinued operations, which contributed 57.7 million of cash inflow in the second quarter of last year, the decrease was largely a result of timing of investment in working capital which in the reverse of last year's profile was weighted to the first half of the year in 2026, as well as higher income tax payments partially offset by lower interest payments.

David Smales: The decrease was largely a result of timing of investment in working capital, which in the reverse of last year's profile, was weighted to the H1 of 2026, as well as higher income tax payments, partially offset by lower interest payments. Consistent with our stated capital allocation priorities, our leverage ratio remains well within an investment-grade range. Net debt to trailing 12-month adjusted EBITDA ratio was 2.2x at the end of the quarter, compared with 2.1x a year ago. While free cash flow in the quarter reflected timing-related investment in working capital and tax payments, our underlying annual cash generation and investment-grade balance sheet provide flexibility to execute a balanced approach to capital allocation.

Speaker #2: Consistent with our stated capital allocation priorities, our leverage ratio remains well within an investment-grade range. Net debt to trailing 12-month adjusted EBITDA ratio was 2.2 times at the end of the quarter, compared with 2.1 times a year ago.

Speaker #2: While free cash flow in the quarter reflected timing-related investment in working capital and tax payments, our underlying annual cash generation and investment-grade balance sheet provide flexibility to execute a balanced approach to capital allocation.

Speaker #2: Year-to-date, we returned 78 million in capital to shareholders, through a combination of our quarterly dividend, which increased by 10.5% from the prior year, and a repurchase of approximately 0.8 million shares under the NCIB.

David Smales: Year to date, we returned CAD 78 million in capital to shareholders through a combination of our quarterly dividend, which increased by 10.5% from the prior year, and the repurchase of approximately 0.8 million shares under the NCIB. We intend to remain active with the NCIB to a minimum offset the impact of dilution from our stock-based compensation plan. As Curtis mentioned in his remarks, we are reaffirming our 2026 guidance and as such, expect to deliver mid-single digit revenue growth and adjusted EBITDA in the range of approximately CAD 520 million to CAD 540 million, while maintaining balance sheet discipline and executing a balanced approach to capital allocation. I'll now turn the call back to Curtis.

Speaker #2: We intend to remain active with the NCIB to a minimum offset the impact of dilution from our stock-based compensation plan. As Curtis mentioned in his remarks, we are reaffirming our 2026 guidance and as such expect to deliver mid-single-digit revenue growth and adjusted EBITDA in the range of approximately 520 to 540 million while maintaining balance sheet discipline and executing a balanced approach to capital allocation.

Speaker #2: I'll now turn the call back to Curtis.

Speaker #3: Okay, thank you, Dave. Let me close with a few key messages. First, the transformation of MAPLE FOODS is clearly complete. The work and capital required to create the focused business that we had envisioned are now largely behind us, and the benefits of operating as a purpose-driven, protein-focused, brand-led consumer packaged goods company are increasingly evident in our performance.

Curtis Frank: Okay, thank you, Dave. Let me close with a few key messages. First, the transformation of Maple Leaf Foods is clearly complete. The work and capital required to create the focused business that we had envisioned are now largely behind us, and the benefits of operating as a purpose-driven, protein-focused, brand-led consumer packaged goods company are increasingly evident in our performance. Second, despite a challenging operating environment, we delivered a solid Q2 and a strong H1. Through the H1 of 2026, sales have increased approximately 4%, adjusted EBITDA has grown more than 5%, and our adjusted EBITDA margin reached 13.4% this past quarter. This is clear evidence that the transformation we've undertaken is translating into stronger financial performance. Third, the drivers of our H2 performance are tangible and already underway.

Speaker #3: Second, despite a challenging operating environment, we delivered a solid second quarter and a strong first half. Through the first half of 2026, sales have increased approximately 4%, adjusted EBITDA has grown more than 5%, and our adjusted EBITDA margin reached 13.4% this past quarter.

Speaker #3: This is clear evidence that the transformation we've undertaken is translating into stronger financial performance. Third, the drivers of our second half performance are tangible and already underway.

Speaker #3: We expect volume performance to improve as recent pricing effects moderate. We have momentum across the poultry business; our sustainable meats portfolio continues to differentiate us; the protein snacking innovation platform is unlocking new avenues for growth; and our Fuel for Growth and Operational Excellence programs are set to continue to deliver.

Curtis Frank: We expect volume performance to improve as recent pricing effects moderate. We have momentum across the poultry business. Our sustainable meats portfolio continues to differentiate us. The protein snacking innovation platform is unlocking new avenues for growth, and our Fuel for Growth and operational excellence programs are set to continue to deliver. Finally, we are reaffirming our 2026 outlook as our strategy, our assets, and our team remain aligned to deliver long-term value for our shareholders as we continue building toward our 2030 financial ambitions. Before concluding, I'd like to recognize the release of our 2025 integrated report on 18 June. The report reinforces the connection between financial performance, sustainability leadership, and shared value creation. It highlights progress against several areas, including our sixth consecutive year as a carbon neutral company.

Speaker #3: Finally, we are reaffirming our 2026 outlook, as our strategy, our assets, and our team remain aligned to deliver long-term value for our shareholders as we continue building toward our 2030 financial ambitions.

Speaker #3: Before concluding, I'd like to recognize the release of our 2025 Integrated Report on June 18. The report reinforces the connection between financial performance, sustainability leadership, and shared value creation.

Speaker #3: It highlights progress against several areas, including our sixth consecutive year as a carbon-neutral company. Sustainability remains integral to our identity and our purpose, and we continue to believe that long-term financial performance and long-term sustainability go hand in hand.

Curtis Frank: Sustainability remains integral to our identity and our purpose, and we continue to believe that long-term financial performance and long-term sustainability go hand in hand. I want to thank the entire Maple Leaf Foods team for your continued execution, commitment to our values, and dedication to serving our customers and consumers each and every day. Thank you. Operator, we can now open the line for questions, please.

Speaker #3: I want to thank the entire MAPLE FOODS team for your continued execution, commitment to our values, and dedication to serving our customers and consumers each and every day.

Speaker #3: I thank you. Operator, we can now open the line for questions, please.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two, and if you're using a speakerphone, please lift the handset before pressing any keys. Our first question comes from John Zamparo with Scotiabank.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two, and if you're using a speakerphone, please lift the handset before pressing any keys.

Speaker #1: Our first question comes from John Zamparo with Scotiabank.

Speaker #4: Thank you very much. Good morning. I wanted to ask about the prepared foods results, and I wonder if you got a sense of a change in the state of the consumer in the quarter and the reason for the question is historically, I think MFI considers itself to be playing in the value channel.

John Zamparo: Thank you very much. Good morning. I wanted to ask about the prepared foods results, and I wonder if you got a sense of a change in the state of the consumer in the quarter. The reason for the question is historically, I think MFI considers itself to be playing in the value channel. If there's trade down, Maple Leaf Foods would be a beneficiary of that. Was the volume response more sensitive to pricing this time around? If so, I wonder what you think the reasons for that are.

Speaker #4: So if there's trade down, MAPLE would be a beneficiary of that. So was the volume response more sensitive to pricing this time around? And if so, I wonder what you think the reasons for that are.

Speaker #3: Hi, good morning, John. Thanks for the question. You know, I'll start with some positive news, I think, in the quarter, which was, you know, we had 1.6% growth overall, and it was our seventh consecutive quarter of top-line sales growth.

Curtis Frank: Hi. Good morning, John. Thanks for the question. Start with the positive news, I think in the quarter, which was we have 1.6% growth overall, and it was our seventh consecutive quarter of top-line sales growth. So we continue to see the resiliency of the playbook that we're operating in the market as a positive and constructive. The declines in revenue within the prepared meats component of the business in around 2% weren't a surprise to us within the quarter. There were two factors that contributed to that. The first is essentially the roll-off of certain lower margin private label businesses, which ebb and flow through the portfolio in small ways throughout the year. That wasn't necessarily a surprise to us.

Speaker #3: So we continue to see the resiliency of the kind of the playbook that we're operating in the market as a positive and constructive. The declines in revenue within the prepared meats component of the business, in around 2%, weren't a surprise to us within the quarter.

Speaker #3: There were two factors that contributed to that. The first is essentially the roll-off of certain kinds of lower-margin private label businesses, which ebb and flow through the portfolio in small ways throughout the year.

Speaker #3: That wasn't necessarily a surprise to us. And probably more importantly, were the implications of the pricing actions that we've taken in Q1, and in two forms: a regular price increase, and then following up, obviously, later on with the fuel components of pricing.

Curtis Frank: Probably more importantly, what the implications of the pricing actions that we've taken in Q1 in two forms, a regular price increase and then following up obviously later on with the fuel components of pricing. It's very normal in consumer packaged goods for that to have a volume impact, not just for Maple Leaf Foods, for our industry, but very normal in consumer packaged goods. That was the case in our first full quarter after the pricing in Q2, and we fully expect that will normalize as the year progresses. What's been, again, positive is the resiliency of the margin in particular, and the fact that we delivered 13.4% inside the quarter, which is reflective of the fact that that pricing has taken hold in the market in a constructive way. So, we think the rest of the year will normalize as it plays out.

Speaker #3: It's very normal in consumer packaged goods for that to have a volume impact—not just for Maple Leaf, or our industry, but very normal in consumer packaged goods.

Speaker #3: That was the case in our first full quarter after the pricing in Q2, and we fully expect that will normalize as the year progresses.

Speaker #3: You know, what's been, again, positive is the resiliency of the margin in particular, and the fact that we delivered 13.4% inside the quarter, which is reflective of the fact that pricing has taken hold in the market in a constructive way.

Speaker #3: So, you know, we think the rest of the year will normalize as it plays out. It's not a material change in the consumer environment.

Curtis Frank: It's not a material change in the consumer environment. We're still seeing a consumer under stress, and they're certainly feeling the effects of inflation, but that's no different than what we've experienced over the past number of quarters.

Speaker #3: You know, we're still seeing a consumer under stress, and they're certainly feeling the effects of inflation. But that's no different than what we've experienced over the past number of quarters.

Speaker #4: Okay, that's helpful. Thank you. And then I wanted to ask about core costs and these keep declining. In Q2 and into Q3, and I wonder if we should be encouraged by the potential for margin expansion in the second half beyond even what you've seen in the first half and to what extent should we see that in Q3 as opposed to Q4?

John Zamparo: Okay. That's helpful. Thank you. I wanted to ask about pork costs and these keep declining in Q2 and into Q3, and I wonder if we should be encouraged by the potential for margin expansion in H2 beyond even what you've seen in H1, and to what extent should we see that in Q3 as opposed to Q4?

Speaker #3: Yeah, well, we've been it's an excellent question. I'm glad you asked it. We've been obviously reluctant to provide quarterly guidance, so we won't do that today.

Curtis Frank: Well, it's an excellent question. I'm glad you asked it. We've been obviously reluctant to provide quarterly guidance, so we won't do that today. But in my comments, I did give some context with respect to how we see the year playing out. Inside of that, we continue to provide some context that Q3, from a seasonality perspective, is likely to be the lower watermark from a margin perspective in our year. I think it's important to be transparent with those things. I would really caution you and others not to use the pork cutout as a proxy for the margins in the Maple Leaf CPG business. There are a number of reasons for that, John. The first is we don't buy the pork cutout. We buy select cuts of the pork cutout. So that's important.

Speaker #3: But in my comments, I did give some context with respect to how we see the year playing out. And inside of that, we continue to provide some context that Q3, from a seasonality perspective, is likely to be the lower watermark from a margin perspective in our year.

Speaker #3: And I think it's important to be transparent with those things. I would really caution you and others not to use the pork cutout as a proxy for the margins in the MAPLE CPG business.

Speaker #3: And there are a number of reasons for that, John. You know, the first is we don't buy the pork cutout. We buy select cuts of the pork cutout.

Speaker #3: So that, you know, that's important. Bacon, as an example, is on a formula. So as we've communicated in the past, so kind of ebbs and flows with markets.

Curtis Frank: Bacon, as an example, is on a formula, as we've communicated in the past, so it kind of ebbs and flows with markets. More importantly, pork raw materials are a little bit less than 25% of our overall input costs. Things like beef, turkey, chicken, packaging and ingredients, freight and storage, labor and plant overheads all play a material role in our overall cost structure as well. Yes, in the near term, we've seen some favorability in the pork cutout, and that's a positive thing, I think. But in almost all of those other areas, beef, turkey, chicken, packaging and ingredients, freight and storage, labor, we're expecting costs to be increased in the second part of the year relative to a year ago.

Speaker #3: But more importantly, pork raw materials, you know, are a little bit less than 25% of our overall input costs. Things like beef, turkey, chicken, packaging and ingredients, you know, freight and storage, labor, and plant overheads all play a, you know, a material role in our overall cost structure as well.

Speaker #3: So yes, in the near term, we've seen some favorability in the pork cutout. And that's a positive thing, I think. But in almost all of those other areas, beef, turkey, chicken, packaging and ingredients, freight and storage, labor, we're expecting costs to be increased in the second part of the year relative to a year ago.

Speaker #3: The other important thing is, pork markets have already started to shift. And despite the fact that there's some year-over-year favorability in the cutout, as an example, Q3 is still forecasted to be higher sequentially from Q2.

Curtis Frank: The other important thing is pork markets have already started to shift. Despite the fact that there is some year-over-year favorability in the cutout as an example, Q3 is still forecasted to be higher sequentially from Q2. Hopefully, that is important and added context for you. The most important part for us from an operating point of view is that despite the inflation that exists in the market with the pricing we have now put forward between what we have executed in the early part of the year and what we have planned for our promotional investments in the back part of the year, we feel really well-positioned with the pricing we have in the market for the balance of the year, and that is the very reason that we were reiterating our guidance here today.

Speaker #3: So you know, hopefully that's important and added context for you. The most important part for us, from an operating point of view, is that despite the inflation that exists in the market, with the pricing we've now put forward—between what we've executed in the early part of the year and what we have planned for our promotional investments in the back part of the year—we feel really well positioned with the pricing we have in the market for the balance of the year.

Speaker #3: And that's the very reason that we were reiterating our guidance here today.

Speaker #4: Okay, that's very helpful. Thank you for that. I'll get back in the queue.

John Zamparo: Okay. That is very helpful. Thank you for that. I will get back in the queue.

Speaker #3: Thanks, John.

Curtis Frank: Thanks, John.

Speaker #1: Our next question is from George Dumet with Ventum Financial.

Operator: Our next question is from George Doumet with Ventum Financial.

Speaker #5: Yeah, hi. Good morning, guys. Curtis, can you double-click a little bit on that 2% decline in prepared meats? I'm just wondering which categories perhaps we saw the most pressure in, and some of the brighter spots in the quarter.

Operator: Yeah. Good morning, guys. Curtis, can you double-click a little bit on that 2% decline at prepared meats? Just wondering which categories perhaps you saw the most pressure in, some of the brighter spots in the quarter, and maybe just how those trends are running Q3 to date. Thanks.

George Doumet: Yeah. Good morning, guys. Curtis, can you double-click a little bit on that 2% decline at prepared meats? Just wondering which categories perhaps you saw the most pressure in, some of the brighter spots in the quarter, and maybe just how those trends are running Q3 to date. Thanks.

Speaker #5: And maybe just how those trends are running kind of Q3 to date. Thanks.

Speaker #3: Yeah, yeah, you know, it was fairly I think George, it was fairly broad-based. Which, again, is very common in normal following pricing changes like that.

Curtis Frank: Yeah. I think, George, it was fairly broad-based, which again, is very common and normal following pricing changes like that. There were bright spots, things like the progress that we are making in our protein snacking portfolio, in particular, the innovation we brought forward, the distribution that is expanding. Those tend to be, if you are familiar with the packages, maybe a little bit lighter from a volume perspective, but contribute in an outsized way from a revenue and margin perspective. So, that was certainly a bright spot within the quarter. We certainly do not view the change as necessarily negative, more normal, kind of what we experienced in Q2, and the focus is really on making sure that we have the right plans in place for the H2 of the year to be well-positioned.

Speaker #3: There were bright spots. Things like the progress that we're making in our protein snacking portfolio in particular, the innovation we've brought forward, the distribution that's expanding.

Speaker #3: You know, those tend to be, if you're familiar with the packages, maybe a little bit lighter from a volume perspective, but contribute in an outsized way from a revenue and margin perspective.

Speaker #3: So you know, that was quarter. And we certainly don't view the changes necessarily negative, more normal. Kind of what we experienced in Q2. And the focus is really on making sure that we have the right plans in place for the second half of the year to be well positioned.

Speaker #3: So, you know, from a category perspective, I don't think there's anything necessarily insightful, category to category—maybe outside of the positive momentum behind the innovation platform and protein snacking.

Curtis Frank: From a category perspective, I do not think there is anything necessarily insightful category to category, maybe outside of the positive momentum behind the innovation platform and protein snacking. But that is kind of really the story from my perspective. The other thing that I would mention, maybe since you brought it up, the positive aspects is interestingly, our sustainable meat sales overall in a very difficult consumer environment in the Q2, sales were up on our brands. So think about the branded sustainable meats portfolio up in and around mid-single digits, and volumes were positive as well. So, not everything has been negatively affected in the consumer environment, and I think the fact that we have a differentiated portfolio of products is also shining through in a lot of areas. That gives us optimism, obviously, for the second part of the year.

Speaker #3: But that's, you know, that's kind of really the story from my perspective. And the other thing that I would mention, maybe since you brought it up—the positive aspects—is, you know, interestingly, our sustainable meat sales overall, in a very difficult consumer environment in the second quarter, sales were up on our brands.

Speaker #3: So, think about the branded sustainable meats portfolio. Up, you know, in and around mid-single digits, and volumes were positive as well. So, you know, not everything has been negatively affected in the consumer environment.

Speaker #3: And I think, you know, the fact that we have a differentiated portfolio of products is also shining through in a lot of areas. So, that gives us optimism, obviously, for the second part of the year.

Speaker #5: Okay, and Q3 to date, it seems that it's trending pretty similarly, right?

Curtis Frank: Okay. Q3 to date, it seems that it is trending pretty similar, right?

George Doumet: Okay. Q3 to date, it seems that it is trending pretty similar, right?

Speaker #3: Say that again, George. Sorry, Q3.

Curtis Frank: Say that again, George. Sorry.

Speaker #5: Yeah, the prepared meats Q3, I know you guys typically don't give guidance, but quarter to date, like Q3, a month in, are we kind of running similar levels?

Curtis Frank: Yeah, the prepared meats. I know you guys typically don't give guidance, but quarter to date, like Q3, what am I saying? Are we kind of running similar levels?

George Doumet: Yeah, the prepared meats. I know you guys typically don't give guidance, but quarter to date, like Q3, what am I saying? Are we kind of running similar levels?

Speaker #3: Similar. Very similar. You know, what I would the color I would give maybe is a very modest improvement from Q2, which is positive. But you know, I think we have to be careful not to react to three or four weeks.

Curtis Frank: Very similar. The color I would give maybe is a very modest improvement from Q2, which is positive. But I think we have to be careful not to react to three or four weeks. We should be thinking about this as how the balance of the year is going to play out over a longer period of time as the consumer environment continues to hopefully improve, but more importantly, the effects of the pricing moderate.

Speaker #3: We should be thinking about this as how the balance of the year is going to play out over a longer period of time as the consumer environment continues to, you know, hopefully improve, but more importantly, the effects of the pricing moderate.

Speaker #5: Okay, thanks. And my next one is for Dave. There was a big working capital drag in the quarter. I believe you called out some seasonality and maybe noted that wasn’t the case last year versus this year.

Curtis Frank: Okay, thanks. My next one's for Dave. A big working capital drag in the quarter. I believe you called out some seasonality and maybe not being the case last year versus this year. So maybe a little bit more color there. After factoring in working capital, should we expect around CAD 200 million plus of free cash this year? Do we expect to fully return that to shareholders? Thanks.

George Doumet: Okay, thanks. My next one's for Dave. A big working capital drag in the quarter. I believe you called out some seasonality and maybe not being the case last year versus this year. So maybe a little bit more color there. After factoring in working capital, should we expect around CAD 200 million plus of free cash this year? Do we expect to fully return that to shareholders? Thanks.

Speaker #5: So maybe a little bit more color there. And after factoring in working capital, should we expect around $200 million plus of free cash this year?

Speaker #5: And do we expect to fully return that to shareholders? Thanks.

Speaker #3: Yeah, thanks, George. So you're right, some seasonality in the working capital, which is kind of the reverse of what we saw last year in terms of timing.

David Smales: Yeah. Thanks, George. So, you're right. Some seasonality in the working capital, which is kind of the reverse of what we saw last year in terms of timing. So we should see the impact of that as we go through the year. We don't give annual free cash flow guidance, but I'd point you to our comments over the five-year period from Investor Day where we talked about CAD 1.7 billion to CAD 1.8 billion of free cash flow over that five years. And obviously within that would imply pretty healthy annual cash flows. No reason why 2026 wouldn't be in line with that from an overall generation perspective. It's just a question of seasonality in terms of H1 versus H2.

Speaker #3: So we should see the impact of that as we go through the year. We don't give annual free cash flow guidance, but I'll point you to a comments over the five-year period from investor day where we talked about 1.7 to 1.8 billion dollars of free cash flow over that five years.

Speaker #3: And obviously, within that, that would imply pretty healthy annual cash flows. And we, you know, no reason why 2026 wouldn't be in line with that from an overall generation perspective.

Speaker #3: It's just a question of seasonality in terms of first half versus second half.

Speaker #5: Okay, thank you.

David Smales: Okay, thank you.

George Doumet: Okay, thank you.

Speaker #1: We have our next question from Derek Lazard with TD Cowen.

Operator: We have our next question from Derek Lessard with TD Cowen.

Speaker #6: Hey guys, it's Evan in for Derek. Most of my questions have been answered, but I just wanted to touch on the poultry revenues. They were strong once again, even though you’re now lapping some tough comps.

[Analyst] (TD Cowen): Hey, guys, it's Evan in for Derek. Most of my questions have been answered, but I just wanted to touch on the poultry revenues. They were strong once again, even though you're now lapping some tough comps. So I was just wondering if you could talk a bit about the sustainability of that growth in light of the fact that you're going to be lapping even tougher comps in Q3. Thank you.

Speaker #6: So I was just wondering if you could talk a bit about the sustainability of that growth in light of the fact that you're going to be lapping even tougher comps in Q3.

Speaker #6: Thank you.

Speaker #3: Yeah, yeah. Thanks, Evan, for the question. To your point, the results in poultry were positive. That's a continuation of the momentum that we've experienced over the last number of quarters.

Curtis Frank: Yeah. Thanks, Evan, for the question. To your point, the results in poultry were positive. That is a continuation of the momentum that we have experienced over the last number of quarters, and truthfully expect to continue into the future. I would describe it really as the benefit of consumer demand colliding with the positive impacts that we are getting from London Poultry. So we have really strong consumer demand for poultry. It is on the right side of all consumer trends today. A protein, GLP-1s, and a very positive healthy protein for consumers, so very strong consumer demand. And the fact that we have London Poultry in place, and I would argue the best operating asset in the Canadian market, augmented by our operation in Edmonton, where the team is doing a fantastic job.

Speaker #3: And, truthfully, I expect that to continue into the future. I would describe it really as the benefit of consumer demand colliding with the positive impacts that we're getting from London poultry.

Speaker #3: So we have really strong consumer demand for poultry. It's on the right side of, you know, all consumer trends today. Protein GLP-1s and a very positive healthy protein for consumers.

Speaker #3: So, very strong consumer demand, and the fact that we have London Poultry in place—and, you know, I would argue the best operating asset in the Canadian market—augmented by our operation in Edmonton, where the team's doing a fantastic job.

Speaker #3: We're able to support growth relative to the market in an outsized way, which has benefited us, you know, not just from volume as poultry allocations grow from consumer demand, but also in positive mix in the business.

Curtis Frank: We are able to support growth relative to the market in an outsized way, which has benefited us not just from volume as poultry allocations grow from consumer demand, but also in positive mix in the business. And I think we noted even in our materials it was another, a positive quarter of market share gain with our Maple Leaf Prime brand. So it was a really positive quarter overall, but that is, I think to your point, not the headline story. We have got really strong momentum in poultry and we expect that to continue.

Speaker #3: And I think we noted even in our materials, it was another positive quarter of market share gain with our Maple Leaf Prime brand. So, you know, it was a really positive quarter overall, but that's, I think, to your point, not the headline story.

Speaker #3: We've got really positive, you know, strong momentum in poultry and we expect that to continue.

Speaker #1: Derek, did you have anything further?

Operator: Derek, did you have anything further?

Speaker #6: No, that's it for me. Thank you.

[Analyst] (TD Cowen): No, that is it for me. Thank you.

Speaker #1: Thank you.

Operator: Thank you.

Speaker #3: Thank you.

Curtis Frank: Thank you.

Speaker #1: And our next question is from Vishal Sridhar with National Bank.

Operator: Our next question is from Vishal Shreedhar with National Bank.

Speaker #7: Hi, thanks for taking my questions. I want to get your perspective on the guidance and the maintenance of the guidance of the mid-single-digit growth and the EBITDA guidance.

Vishal Shreedhar: Hi. Thanks for taking my questions. I wanted to get your perspective on the guidance and the maintaining of the guidance of the mid-single-digit growth and the EBITDA guidance. There seems to be implied acceleration in EBITDA growth and revenue growth in H2, but at the same time, you are indicating the seasonality in Q3 and the inflationary pressures. Maybe you could give me broad building blocks for the H2 story and help me understand why management remains so confident in the outlook for 2026.

Speaker #7: There seems to be implied acceleration in EBITDA growth and revenue growth in H2, but at the same time, you're indicating the seasonality in Q3 and the inflationary pressures.

Speaker #7: So maybe you could give me broad building blocks for the H2 story and help me understand why management remains so confident in the outlook for 2026.

Speaker #3: Yeah, thanks, Vishal. Good morning. You know, there are a number of reasons we continue to be confident from an annual perspective. You could start with the fact that, on a year-to-date basis, we're growing at 4%.

Curtis Frank: Yeah. Thanks, Vishal. Good morning. There is a number of reasons we continue to be confident from an annual perspective. You could start with the fact that on a year to date basis, we are growing at 4%, so very close to within the mid-single digit kind of range. Secondly, at CAD 260 million of EBITDA, that is tracking on a run rate basis within our guidance range. There are some things that give us further confidence, though, that I think are important for the H2 of the year that I can maybe walk you through, as you said, in broad strokes. The first is the continued strength in poultry, and I just commented on that, so I will not repeat my comments, but it continues to be a very positive environment in the poultry business. The second is the easing of the volume impacts from pricing in prepared foods.

Speaker #3: So, you know, very close to within the mid-single digit kind of range. And secondly, at 260 million dollars of EBITDA, that's, you know, that's tracking on a run rate basis to, you know, within our guidance.

Speaker #3: Within our guidance range. There are some things that give us further confidence, though, that I think are important for the second half of the year.

Speaker #3: I could maybe, you know, walk you through, as you said, in broad strokes. The first is the continued strength in poultry, and, you know, just commented on that.

Speaker #3: So I won't repeat my comments, but it continues to be a very positive environment in the poultry business. The second is the easing of the volume impacts from pricing in prepared foods.

Speaker #3: And that, you know, that's an important part of our back half story and, as I said earlier, will play out as the year progresses.

Curtis Frank: That is an important part of our back half story, and as I said earlier, will play out as the year progresses, and we remain confident in that. The third, from a revenue growth perspective, is the distribution and velocity gains that we are picking up on the protein snacking innovation platform in particular, where we are expanding distribution in both Canada and the US. Think of everything from multi-packs in the traditional retail channel beyond the single-serve stick, which are growing in distribution today. Penetrating over 1,500 gas and convenience locations that we have not historically had a presence in. Expanding our reach in the club channel in a pretty significant way, and also in the dollar channel in a pretty significant way. Also growing in the United States, where we have expanded with three customers to have national distribution in the United States.

Speaker #3: We remain confident in that. The third, from a revenue growth perspective, is the distribution and velocity gains that we're picking up on the protein snacking innovation platform in particular, where we're expanding distribution in both Canada and the US.

Speaker #3: Think of everything from, you know, multi-packs in the traditional retail channel beyond the single-serve stick, which are growing in distribution today, penetrating over 1,500 gas and convenience locations that we haven't historically had a presence in, and expanding our reach in the club channel in a pretty significant way.

Speaker #3: And also in the dollar channel in a pretty significant way, and also growing in the United States, where we've expanded with three customers to have national distribution in the United States.

Curtis Frank: One club operator moving from three regions to eight. So protein snacking alone is a very attractive part of the business. We do expect to continue to accelerate growth in the United States, and that is positive. We are relaunching within our materials, but I think it is important to call out, we are relaunching the Yves brand, which had a very loyal Canadian consumer following and was by far the brand and market share leader in the Canadian market. So from a revenue growth perspective, those are very important parts of our back half of the year. From a margin point of view, there are a few things that I think are equally important. The first is we will have the full impact of the pricing in the H2 of the year.

Speaker #3: One club operator moving from three regions to eight—you know, so those protein snacking alone is a very attractive part of the business.

Speaker #3: Now, we do expect to continue to accelerate growth in the United States. And that's positive. And we're relaunching, you know, it was in our materials, but I think it's important to call out, we're relaunching the Eaves brand, which had a very loyal Canadian consumer following and was by far the brand in market share leader in the Canadian market.

Speaker #3: So from a revenue growth perspective, you know, those are very important parts of our back half of the year. From a margin point of view, you know, there's a few things that I think are equally important.

Speaker #3: The first is we'll have the full impact of the pricing and the second half of the year, you know, keep in mind that was really only implemented in the full quarter of Q2.

Curtis Frank: Keep in mind, that was really only implemented in the full quarter of Q2, so partially part of the way through Q1. So we really only have the full quarter benefit in Q2, and that will obviously play out, as well as the platform that we have operating under our Fuel for Growth portfolio of cost reduction initiatives, which I think you saw really shine through this quarter, despite the fact that even though we had positive growth, almost 2%, revenue was a little lighter than we would have liked, but the Fuel for Growth platform really contributed in a way that allowed us to not only sustain, but widen our margins by 40 basis points. So when you take all those things together, we put them into the context of the back half of the year, and we continue to have confidence in our outlook for 2026.

Speaker #3: So, you know, partially a part of the way through Q1. So we really only had the full quarter benefit in Q2, and that will obviously play out, as well as the platform that we have operating under our Fuel for Growth portfolio of cost reduction initiatives, which I think you saw really shine through this quarter. Despite the fact that even though we had positive growth, almost 2%, revenue was a little lighter than we would have liked.

Speaker #3: But the fuel for growth platform really contributed in a way that allowed us to not only sustain, but widen our margins by 40 basis points.

Speaker #3: So, you know, you take all those things together, we put them into the context of the back half of the year, and we continue to have confidence in our outlook for 2026.

Speaker #7: Okay, thank you for that detailed color. And last quarter, Curtis, and I know you've implemented pricing in the past and you've seen the consumer response in the past, so this isn't new to you, but last quarter you suggested that, you know, pricing response is typically take a quarter or two to be digested by the consumer.

Vishal Shreedhar: Okay. Thank you for that detailed color. Last quarter, Curtis, I know you have implemented pricing in the past, and you have seen the consumer response in the past, so this is not new to you. But last quarter, you suggested that pricing responses typically take a quarter or two to be digested by the consumer, and the associated elasticity effect. Is that still what you anticipate in 2026, and we should anticipate return to growth in prepared foods around Q4, if not latter part of Q3?

Speaker #7: And the associated elasticity effect— is that still what you anticipate in 2026? And should we anticipate a return to growth in prepared foods around Q4, if not the latter part of Q3?

Speaker #3: Yeah, I think broadly I would stand behind those comments. That's historically been our experience, Vishal, and, you know, I don't see anything today that would lead me to a different perspective.

Curtis Frank: Yeah, I think broadly I would stand behind those comments. That is historically been our experience, Vishal, and I do not see anything today that would lead me to a different perspective. So that has been our historical experience, and I think that would be a reasonable way to think about the back part of this year.

Speaker #3: So that's been our historical experience, and I think that would be a reasonable way to think about the back part of this year.

Speaker #7: Thank you.

Vishal Shreedhar: Thank you.

Speaker #1: We have our next question from Irene Nettle with RBC Capital Markets.

Operator: We have our next question from Irene Nattel with RBC Capital Markets.

Speaker #8: Thanks. Good morning, everyone. Just a couple of follow-up questions, please. Sticking with the question of price, you had planned on implementing price prior to the surge in fuel and the other input costs that you called out.

Irene Nattel: Thanks. Good morning, everyone. Just a couple of follow-up questions, please. Sticking with the question of price, you had planned on implementing price prior to the surge in fuel and the other input costs that you called out. Is there a possibility that you are going to need to take more price later in the year, or have you got it covered here?

Speaker #8: Is there a possibility that you're going to need to take more price later in the year or have you got it covered here?

Curtis Frank: Thanks, Irene. We believe we have it covered here through the combination of pricing we took earlier in the year, the changes we made to either increasing prices or adjusting our trade promotion programs with the fuel surcharge, and some tactical pricing that we have already moved to implement and mobilized to implement in the back part of this year that have already been communicated and moved into market. I guess things can change, but based on everything we know today, Irene, we feel like we are very well positioned for the inflation we are going to face for the back part of this year. Something changes, we will obviously adapt accordingly, including into next year. But for the balance of this year, we feel like we are well positioned.

Speaker #3: Thanks, Irene. We believe we have it covered here through the combination of pricing we took earlier in the year of the changes we made to, you know, either increasing prices or adjusting our trade promotion programs with the fuel surcharge.

Speaker #3: And some tactical pricing that we've already moved to implement and mobilize to implement in the back part of this year that have already been communicated and moved into market.

Speaker #3: So, you know, I guess things can change, but based on everything we know today, Irene, we feel like we're very well positioned for the inflation we're going to face for the back part of this year.

Speaker #3: And something changes, we'll obviously adapt accordingly. Including into next year, but for the balance of this year, we feel like we're well positioned.

Speaker #8: That's great. Thank you. And clearly, you know, snacking is a big sort of big push this year on the innovation side. But our, should we be anticipating any new product introductions as we head into the back-to-school season in some of your more traditional categories or channels?

Irene Nattel: That is great. Thank you. Clearly, snacking is a big push this year on the innovation side. But should we be anticipating any new product introductions as we head into the back to school season in some of your more traditional categories or channels?

Speaker #3: Yeah, we kind of typically try to talk about those after they come, just even from a competitive perspective. But I'm happy to give you a little bit of color.

Curtis Frank: Yeah. We typically try to talk about those after they come, just even from a competitor perspective, but I am happy to give you a little bit of color. Number one is really expanding the snacking platform. So I have talked about that this morning, but there are a couple of exciting things that we are augmenting that with in the back part of this year. That includes expanding our charcuterie lineup under our Fantino & Mondello brand, which is an important part of our portfolio. We are extending the Maple Leaf Natural Selections brand into protein kits as well, in a little bit different way against the Natural Selections brand, which we are excited about. We are launching additions to our Schneiders breakfast portfolio. Think of things like breakfast egg white bites and breakfast egg white sandwiches. So we are excited about that from a consumer relevance and a protein consumption perspective.

Speaker #3: I mean, number one is really expanding the snacking platform. So that's, you know, I've talked about that this morning. But there are a couple of exciting things that we're augmenting that with in the back part of this year.

Speaker #3: That includes expanding our charcuterie lineup under our Fontino and Mondello brands, which is an important part of our portfolio. We're extending the Maple Leaf Natural Selections brand into protein kits as well, in a little bit different way against the Natural Selections brand, which we're excited about.

Speaker #3: We're launching additions to our Schneider's breakfast portfolio. Think of things like breakfast egg white bites and breakfast egg white sandwiches. So we're excited about that from a consumer relevance and that protein consumption perspective.

Curtis Frank: So we are excited about that from a consumer relevance and a protein consumption perspective. We are relaunching, as I said earlier, the Yves brand in the Canadian market, so that is something that is creating some excitement inside of the organization. I had an opportunity to eat them last week. They were fantastic. We are pretty excited about the launch that we are bringing to Canada, and we have some new products coming out in the fall with our partners in the United States market.

Speaker #3: We're relaunching, as I said earlier, the Eaves brand in the Canadian market. So that's something that's creating some excitement inside of the organization and an opportunity to eat them last week.

Curtis Frank: We are relaunching, as I said earlier, the Yves brand in the Canadian market, so that is something that is creating some excitement inside of the organization. I had an opportunity to eat them last week. They were fantastic. We are pretty excited about the launch that we are bringing to Canada, and we have some new products coming out in the fall with our partners in the United States market. The combination of what we are doing with the innovation that has already been in market, which I would remind everyone, it is important to continue to support. It takes time to scale up both distribution and velocity and exciting new product launches like that. It is not necessarily a one quarter thing. It is going to give us benefits for a longer period of time.

Speaker #3: They were fantastic. So we're pretty excited about the launch that we're bringing to Canada. And we have some new products coming out in the fall with our partners in the United States market.

Speaker #3: So you know, the combination of what we're doing with the innovation that's already been in market, which, you know, I remind everyone, it's important to continue to support.

Curtis Frank: The combination of what we are doing with the innovation that has already been in market, which I would remind everyone, it is important to continue to support. It takes time to scale up both distribution and velocity and exciting new product launches like that. It is not necessarily a one quarter thing. It is going to give us benefits for a longer period of time. That focus on kits, combined with the exciting launches that we have coming out in the fall, I think are going to be constructive to our back half as well.

Speaker #3: It takes time to scale up both distribution and velocity and exciting new product launches like that. It's not necessarily a one-quarter thing. It's a, you know, it's going to give us benefits for a longer period of time.

Speaker #3: But you know, that focus on kits, combined with the exciting launches that we have coming up in the fall, I think are going to be constructive to our back half as well.

Curtis Frank: That focus on kits, combined with the exciting launches that we have coming out in the fall, I think are going to be constructive to our back half as well.

Speaker #8: That's great. Thank you. And then just one final, one of the things that you didn't mention in sort of some of the puts and takes in the quarter is weather.

Irene Nattel: That is great. Thank you. Just one final. One of the things that you did not mention in some of the puts and takes in the quarter is weather, but we have been hearing from other companies in the food space that the late start to summer had a negative impact on barbecue categories where, of course, you are strong. Just wondering whether there was any of that in Q2, and if so, how has that evolved in Q3?

Speaker #8: But we have been hearing from other companies in the food space that the late start to summer had a negative impact on, you know, barbecue categories where, of course, you're strong.

Speaker #8: And so just wondering whether there was any of that in Q2 and if so, how was that evolved in Q3?

Curtis Frank: I try not to take credit when it is sunny, and I try not to complain when it rains. I am sure it, in some ways, had an impact on our quarter, Irene, but I would not view it as a material driver.

Speaker #3: I try not to take credit when it's sunny, and I try not to complain when it rains. You know, I'm sure it, you know, in some ways had an impact on our quarter, Irene, but I wouldn't view it as a material driver.

Speaker #8: Understood. Thank you.

Irene Nattel: Understood. Thank you.

Speaker #1: We have our next question from Tammy Chen with BMO Capital Markets.

Operator: We have our next question from Tamy Chen with BMO Capital Markets.

Speaker #5: Hi, good morning. Thanks for the question. I wanted to ask on the poultry side, Curtis: would you say that right now the quota allocations, I believe, have not been keeping up with the strong consumer demand for poultry?

Tamy Chen: Hi. Good morning. Thanks for the question. I wanted to ask on the poultry side, Curtis, would you say right now the quota allocations, I believe they've been not keeping up with the strong consumer demand for poultry. Can you confirm that that's still the case and has it been getting closer, allocation-wise, to catching up with demand? Can you confirm that the way the system works is that you have to accept whatever amount of allocation that you get and what would happen then if we get to a point where the allocation starts to exceed demand?

Speaker #5: Can you confirm that that's still the case? And has it been getting closer allocation-wise to catching up with demand? And can you confirm that the way the system works is that you have to accept whatever amount of allocation that you get?

Speaker #5: And what would happen then if we get to a point where the allocation starts to exceed demand?

Speaker #3: So I'll answer the second part of your question first, if that's okay, Tammy. Poultry allocations are a use-it-or-lose-it thing. So yes, we have to use the poultry that's allocated to us or, you know, run the risk of losing the availability of those volumes.

Curtis Frank: I'll answer your second part of your question first, if that's okay, Tamy. Poultry allocations are use it or lose it thing. Yes, we have to use the poultry that's allocated to us or run the risk of losing the availability of those volumes. Obviously our focus is on using it, and we do, to be clear, and we do. That was why the London Poultry asset was so important for us. The ability to take higher levels of poultry allocations and translate them into value-added sales was one of the very reasons that the asset was so important to be constructed. Clearly we're seeing the benefits of that. I think markets never really want a gas pedal, brake effect, oversupplied or undersupplied.

Speaker #3: So we, you know, obviously, our focus is on using it, and we do—to be clear, we do. That was why the London poultry asset was so important for us.

Speaker #3: The ability to take higher levels of poultry allocations and translate them into value-added sales. Was, was so important to be constructed. So and, you know, clearly we're seeing the benefits of that.

Speaker #3: I think markets, you know, never really want to gas pedal break effect oversupplied or undersupplied. You know, our goal, and I think the industry's goal, is to always be in balance.

Curtis Frank: Our goal, and I think the industry's goal, is to always be in balance, and I think we're in a reasonable place from that perspective today. There continues to be strong demand, so you're always catching up to consumer demand. I would encourage all of us, including the industry, not to over-rotate to that the goal is always to be in a reasonable place from a supply and demand perspective. I think for the balance, that's where we are today.

Speaker #3: And I think we're in a reasonable place from that perspective today. There continues to be strong demand. So, you know, you're always catching up to consumer demand, but I would encourage all of us, including the industry, not to over-rotate to that.

Speaker #3: The goal is always to be in, you know, reasonable place from a supply and demand perspective. And I think, you know, for balance, that's where we are today.

Speaker #5: Okay, I see. And then my follow-up is, in terms of your promotional spend and trade investments, how should we think about that going forward? Do you anticipate it to be fairly similar to the first half, or do you expect it to accelerate?

Tamy Chen: Okay. I see. My follow-up is, in terms of your promotional spend trade investments, how should we think about that going forward? Do you anticipate it to be fairly similar to the H1, or do you expect it to accelerate? Thank you.

Speaker #5: Thank you.

Speaker #3: I think for the most part, pretty stable from the first half, pretty stable. And to be clear, that, you know, that's still challenging from a consumer perspective.

Curtis Frank: I think for the most part, pretty stable from the H1. Pretty stable. To be clear, that's still challenging from a consumer perspective. We're still investing more than what we would consider optimized, even in the first part of this year, to get the volume and share response that we're satisfied with. If you looked at it maybe on a historical view over the last number of years, promotional allowances are elevated and promotional intensity is elevated given the inflationary environment we're in. I guess I would answer it by coming back to the annual guidance and saying, look, we don't expect that it will be a material change H1 to H2, as an example, but it remains elevated as compared to historical levels.

Speaker #3: We're still investing more than what we would consider optimized, even in the first part of this year, to get the volume and share response that we're satisfied with.

Speaker #3: You know, if you looked at it maybe from a historical view over the last number of years, promotional allowances are elevated, and promotional intensity is elevated, given the inflationary environment we're in.

Speaker #3: You know, I would guess I would answer it by coming back to the annual guidance and saying, look, we don't expect that there will be a material change from H1 to H2, as an example.

Speaker #3: But it remains elevated as compared to historical levels. And it's something obviously with the pricing we've taken, I guess maybe the added color I should offer is with the pricing we've taken, we're monitoring it very closely.

Curtis Frank: It's something obviously with the pricing we've taken, I guess maybe the added color I should offer is, with the pricing we've taken, we're monitoring it very closely, and we stay close to the consumer response, consumer insight, volume revenue trends, and we're always trying to optimize our offer to the consumer. So we'll be paying particular careful attention to that through our revenue management practice in the back half of the year. That's kind of normal business practice for us.

Speaker #3: And we stay close to the consumer response consumer insight volume and revenue trends. And, you know, we're always trying to optimize our offer to the consumer.

Speaker #3: So we'll be paying particular careful attention to that through our revenue management practice in the back half of the year. But that's kind of normal business practice for us.

Speaker #5: Right. Okay. Got it. Thank you.

Tamy Chen: Right. Okay. Got it. Thank you.

Speaker #3: Thank you.

Curtis Frank: Thank you.

Speaker #1: We have. We have our next question from Chris Lee with Desjardins.

Operator: We have our next question from Chris Li with Desjardins.

Speaker #6: Oh, good morning. Thanks for all the comments so far. Very helpful. I wanted to, sorry, if you kind of mentioned this already, but wondering if you can share what was the impact on the revenue from the rolloff of the lower margin private label during the quarter?

Chris Li: Good morning. Thanks for all the comments so far. Very helpful. I wanted to, sorry if you kind of mentioned this already, but wondering if you can share what was the impact on the revenue from the roll-off of the lower margin private label during the quarter?

Speaker #3: We don't, we don't and probably wouldn't break it out separately. You know, like I said, the private label business—we try to keep it as stable as we can.

Curtis Frank: We don't and probably wouldn't break it out separately. Like I said, the private label business, try to keep it as stable as we can. It's part of our portfolio. Through the year, customers ultimately make merchandising decisions that can impact the portfolio. These were, in the big picture, a small amount of changes. One of the things I didn't comment on earlier, but I'll add now is a good portion of that we've already secured back in another area for the back part of this year that we'll kind of onward later this year. It's unfortunate that we have to talk about two things rather than one inside of a quarter. That happens from time to time, but for the most part, I don't view it as a structural issue and won't be material to our year.

Speaker #3: It's part of our portfolio. Throughout the year, you know, customers ultimately make merchandising decisions that can impact the portfolio. These were, you know, in the big picture, a small amount of changes.

Speaker #3: And, you know, one of the things I didn't comment on earlier, but I'll add now, is a good portion of that we've already secured back in another area for the back part of this year that we'll kind of onboard later this year.

Speaker #3: So, you know, it's unfortunate that we have to talk about two things rather than one inside of a quarter. That happens from time to time.

Speaker #3: But for the most part, I don't view it as a structural issue and it won't be material to our year.

Speaker #6: Okay. That's very helpful. And then just a quick one on the U.S., we noticed, I think your revenue in the U.S. was down around 4%.

Chris Li: Okay. That's very helpful. Just a quick one on the US. We noticed, I think your revenue in the US was down around 4%. Can you give us some context, sort of what the fundamentals in that business during the quarter?

Speaker #6: Can you give us some context sort of what the sort of the fundamentals in that business during the quarter?

Speaker #3: Yeah, you know, a good portion of that private label business was inside of the U.S. market, so that's contributing as well. And the plant protein category continues to face headwinds.

Curtis Frank: Yeah. A good portion of that private label business was inside of the US market, so that's contributing as well, and the plant protein category continues to face headwinds. The positive, I think, operating environment in the United States would be our Greenfield Natural Meat Co. brand, just to be balanced. That brand is growing in the last 12 months in the United States at a greater rate than 10%, and has been operating in the mid-single digit range more recently. So we continue to see positive in the Greenfield Natural Meat Co. brand, our flagship raised without antibiotics and sustainable meats brand in the US. Unfortunately, in the last quarter, that was more than offset by some changes in our private label portfolio and some sustained headwinds in the plant protein category.

Speaker #3: The positive, I think, operating environment in the United States would be our greenfield natural meat company brand. It just, you know, to be balanced.

Speaker #3: And that brand is growing in the last 12 months in the United States, at a greater rate than 10%. And has been kind of operating in the mid single digit range more recently.

Speaker #3: So, we continue to see positive momentum in the Greenfield Natural Meat Company brand, our flagship raised without antibiotics and sustainable meats brand in the U.S.

Speaker #3: Unfortunately, in the last quarter, that was more than offset by some changes in our private label portfolio and some sustained headwinds in the plant protein category.

Speaker #6: Okay. That's helpful. And then my last question, maybe on just on capital allocation, obviously you balance sheet remains very strong with leverage well below your three times target.

Chris Li: Okay. That's helpful. My last question, maybe just on capital allocation. Obviously, your balance sheet remains very strong with leverage well below your 3x target. Can you just give us, maybe provide your latest thinking about a special dividend? Also on the M&A side, how is the pipeline right now, and how is valuation overall?

Speaker #6: Can you just give us maybe provide your latest thinking about special dividend and also on the M&A side, you know, how is the pipeline right now and how is valuation overall?

Speaker #3: Yeah, Dave would maybe take that one.

Curtis Frank: Yeah. Dave would maybe take that one.

Speaker #4: Yeah. So, obviously, from a capital allocation perspective, we remain very focused on the playbook we rolled out as part of Investor Day, where we have a balanced approach that includes increasing our annual dividend—which we did earlier this year.

David Smales: Yeah. So, obviously from a capital allocation perspective, we remain very focused on the playbook we rolled out as part of Investor Day, where we have a balanced approach that includes increasing our annual dividend, which we did earlier this year. We bought back around 800,000 shares under the NCIB program in H1, versus 700,000 the whole of last year. So that continues to be part of the program. Obviously, we haven't announced anything in terms of other discretionary return of capital, but you can be sure that that's part of our playbook. At the right time, we will execute on return of capital based on the strength of our balance sheet, as you noted, plus the cash flow generation that we anticipate.

Speaker #4: We've bought back around 800,000 shares under the NCIB program in the first half, versus 700,000 in the whole of last year. So that continues to be part of the program.

Speaker #4: Obviously, we haven't announced anything in terms of other discretionary return of capital. But you can be sure that that's part of our playbook. And at the right time, we will execute on return of capital based on the strength of our balance sheet, as you noted.

Speaker #4: Plus the cash flow generation that we anticipate. So, nothing to announce today other than it continues to be a key focus area for us.

David Smales: Nothing to announce today other than it continues to be a key focus area for us, and you should expect to see us be active. In terms of M&A, obviously, we're tracking the market closely. I think valuations today are reasonable. I think certainly for the size of acquisitions that we're looking at. Remember, we're not looking at anything transformational. We're looking at tuck-in type acquisitions, and I would say valuations in that space are fairly reasonable today.

Speaker #4: And you should expect to see us be active in terms of M&A. Obviously, we're tracking the market closely. You know, I think valuations today, reasonable.

Speaker #4: I think certainly for the size of acquisitions that we're looking at. Remember, we're not looking at anything transformational. We're looking at tuck-in type acquisitions.

Speaker #4: And I would say valuations in that space are fairly reasonable today.

Chris Li: Great. Thank you very much.

Speaker #6: Thank you very much.

Speaker #4: The proof will be in the pudding as and when we have specific targets and look to execute. But as we track the market, it looks fairly reasonable today.

David Smales: But the proof will be in the pudding as and when we have specific targets and look to execute. But as we track the market, it looks fairly reasonable today.

Speaker #6: Great. Thanks again.

Chris Li: Great. Thanks again.

Speaker #1: We have our next question from Martin Landry with Stiefel.

Operator: We have our next question from Martin Landry with Stifel.

Speaker #7: Hi, good morning. Most of my questions have been answered, but I was wondering if you could give us an update on your fuel for growth initiative what you have in plan for the coming quarters and where your capacity utilization is at now.

Martin Landry: Hi. Good morning. Most of my questions have been answered, but I was wondering if you could give us an update on your Fuel for Growth initiative, what you have in plan for the coming quarters, and where your capacity utilization is at now.

Speaker #3: Yeah. So we've done some very important work in our fuel for growth platform, much of which is paying dividends in our results today. So let's start with that.

Curtis Frank: Yeah. We have done some very important work in our Fuel for Growth platform, much of which is paying dividends in our results today. Let us start with that. The work that has been done to date is really focused on reorganizing our SG&A, which we did last year, has been focused on a procurement project that positioned us well from a strategic procurement point of view. And we have right-sized the organizational and leadership structures in our manufacturing plants. So those have all been a positive. We are now in the phase where we are engaging in an operational excellence initiative within the manufacturing facilities. That is going particularly well. And we continue to get really strong operating results and really strong operating efficiencies on a year-to-date basis, and we expect that to continue into the H2. So that is positive from my perspective.

Speaker #3: I mean, that really the work that's been done today is really focused on reorganizing our SG&A which we did last year. Has been focused on a procurement project that positioned us well from a strategic procurement point of view.

Speaker #3: And we've rightsized the organizational and leadership structures in our manufacturing plant. So that, you know, that's those have all been a positive. Now we're now in the phase where we're engaging in a operational excellence initiative within the manufacturing facilities.

Speaker #3: That's going particularly well. And we continue to get a really strong operating results and really strong operating efficiencies on a year-to-date basis. And we expect that to continue into the second half.

Speaker #3: So that, you know, that's positive. From my perspective, we're also investing a very strategically and thoughtfully in technology and automation mostly in the manufacturing plants in this particular case.

Curtis Frank: We are also investing very strategically and thoughtfully in technology and automation, mostly in the manufacturing plants in this particular case, that are driving reasonable capital investments that allow us to operate well within our annual guidance from a capital perspective, but contributing financial results as we expected. So, those are the focus areas for this year. And I think, as I said, contributing to our results now will contribute to the results in the H2. As we look to next year and beyond, we are continuing the work to evaluate the manufacturing network on a more broad-based basis, and the capacity utilization and optimizing the assets within the network. And that continues to be an important part of the work that is in progress, but there is nothing specific that I would offer or comment on today.

Speaker #3: That are driving, you know, reasonable capital investments that allow us to operate well within our annual guidance from a capital perspective, but contributing financial results as we expected.

Speaker #3: So, you know, those are the focus areas for this year. And I think, as I said, contributing to our results now will contribute to the results in the second half.

Speaker #3: As we look to next year and, you know, and beyond, we're continuing the work to evaluate the manufacturing network on a more broad-based basis.

Speaker #3: And that capacity utilization and optimizing the assets within the network. And that continues to be an important part of the work that's in progress.

Speaker #3: But there's nothing specific that I would offer or comment on today.

Speaker #7: Perfect. Thank you. And best of luck.

Martin Landry: Perfect. Thank you, and best of luck.

Speaker #3: Thank you. Thanks, Martin.

Curtis Frank: Thank you. Thanks, Martin.

Speaker #1: Our next question is from Luke Hannon with Canaccord Genuity.

Operator: Our next question is from Luke Hannan with Canaccord Genuity.

Luke Hannan: Thanks. Good morning, everyone. Just one question for me. I wanted to ask about the snacking innovation platform. Curtis, you talked about some of the distribution gains that you received within the US. Can you just frame up for us specifically with snacking innovation, what white space opportunity there still exists for you there? Then maybe secondly, on the performance of the Mighty Protein sticks, has there been any tailwind that you guys can discern as a result of there being poultry or chicken being a relatively more affordable alternative compared to beef, where it seems like inflation still remains pretty high? Thanks.

Speaker #5: Hey, good morning, everyone. Just one question from me. I wanted to ask about the snacking innovation platform. Of course, you talked about some of the distribution gains that you received within the U.S.

Speaker #5: Can you just frame up for us, specifically with snacking innovation, what white space opportunity still exists for you there? And then, maybe secondly, on the performance of the Mighty Protein Sticks, has there been any tailwind that you guys can discern as a result of there being poultry or chicken being a relatively more affordable alternative compared to beef, where it seems like inflation still remains pretty high?

Speaker #5: Thanks.

Speaker #3: Yeah, for sure. Thanks. So from a whitespace perspective, I mean, there's still lots. The reality is, you know, our execution I think has been good in our stronghold, which is Canadian retail.

Curtis Frank: Yeah, for sure. Thanks. From a white space perspective, there's still lots. The reality is our execution, I think, has been good in our stronghold, which is Canadian retail, but we're still building distribution off a base that's not yet optimized from a white space perspective. So we're closing week after week, month after month, distribution gaps in the Canadian retail market. That's just execution, and the team's doing a good job, and we're going to continue to accelerate that. So that's the mainstay of our business. Within the club channel, tends to be a high volume, high velocity, and a great place to build a brand awareness and brand recognition, just given the traffic and the consumer experience in club. As I said earlier, in the Canadian market, we're expanding our single-serve offering in the club channel. So that's positive. We've landed some pretty significant business.

Speaker #3: But we're still building distribution off, you know, off a base that's not yet optimized from a white space perspective. So we're, you know, we're closing week after week, month after month, distribution gaps in the Canadian retail market.

Speaker #3: That's just execution, and teams doing a good job. And we're going to continue to accelerate that. So that's, you know, that's kind of the mainstay of our business.

Speaker #3: Within club, within the club channel, tends to be a high volume, high velocity, and a great place to build a brand awareness and brand recognition.

Speaker #3: Given the traffic and the consumer experience in club, and as I said earlier, in the Canadian market, we're expanding our single-serve offering in the club channel.

Speaker #3: So that's positive. We've landed some pretty significant business. It's still white space because, you know, it's contributing in a small amount, but it will continue to have an impact.

Curtis Frank: It's still white space because it's contributing a small amount, but it will continue to have an impact in the dollar channel, and that's really white space for us because it's not a channel that we participate in in a material way. So having a shelf-stable offering in protein snacking in the dollar channel is white space for us. I talked about gas and convenience and adding 1,500 locations. That's 1,500 incremental net new locations for us that didn't exist in the past, and we still have tons of white space in the gas and convenience distribution channel. That hasn't typically been a stronghold for us, and building capabilities, expanding the distribution of this product is important, but it also gives us a platform to launch further products into that channel and expand our reach, which I see as very material white space for us. Again, very positive.

Speaker #3: In the dollar channel. And that's really white space for us because it's not a channel that we participate in and a material way. So having a shelf stable offering in protein snacking in the dollar channel is white space for us.

Speaker #3: I talked about gas inconvenience and adding 1,500 locations. You know, that's 1,500 incremental net new locations for us that didn't exist in the past.

Speaker #3: And we still have tons of white space in kind of the gas inconvenience distribution channel. That hasn't typically been a stronghold for us. And building capabilities, not just with this, you know, expanding the distribution of this product is important, but it also gives us a platform, you know, to launch further products into that channel and expand our reach, which I see as very material white space for us.

Speaker #3: Again, very positive. And then the U.S. has, what I would describe as a mountain of white space. I mean, I talked about three examples where we've gained national distribution.

Curtis Frank: The US has what I would describe as a mountain of white space. I talked about 3 examples where we have gained national distribution. That is very significant for us operating in the United States to gain national distribution with 3 retailers, plus the ramping up of the club channel from 3 regions to 8 in the US. So lots of white space, not just from a distribution perspective, but continuing to turn the velocity dial. You asked about species and whether poultry was more attractive because it was more affordable. I think perhaps that plays a role, but I think what is most important is we have a really important consumer insight here, which is healthy protein snacking is here to stay.

Speaker #3: That's very significant, you know, for us operating in the United States, to gain national distribution with three retailers, plus the ramping up of the club channel from three regions to eight in the U.S.

Speaker #3: But, you know, so lots of white space, not just from a distribution perspective, but continuing to turn the velocity dial. Now, you asked about species.

Speaker #3: And whether, you know, poultry was more attractive because it was more affordable—and I think, you know, perhaps that plays a role. But I think what's most important is we have a really important consumer insight here, which is that healthy protein snacking is here to stay.

Speaker #3: You know, the fact that we have 10 or 12 grams of protein, 100 calories in a meat stick that's portable on the go—I think that's what's winning the day.

Curtis Frank: The fact that we have 10 or 12 grams of protein, 100 calories in a meat stick that is portable on the go, I think is what is winning the day, less so than the protein species inside of it, although chicken is, poultry is clearly attractive to consumers these days. We are looking at expanding the portfolio beyond one species, being chicken in this particular case, which I think is important to continue to create new and exciting news for the consumer. So lots of white space, lots of excitement from the team, extends beyond meat sticks into protein kits. We still view that as protein snacking and protein snacking on the go, and there too, there is significant white space.

Speaker #3: Less so than the protein species inside of it. Although chicken is, you know, poultry is clearly attractive to consumer these days. We are looking at expanding the portfolio beyond one species being chicken in this particular case, which I think is important to continue to create new and exciting news for the consumer.

Speaker #3: So lots of white space, lots of excitement from the team, extends beyond meat sticks into protein kits. You know, we still view that as protein snacking and protein snacking on the go.

Speaker #3: And there, too, there's significant whitespace.

Speaker #7: That's great. Thank you very much.

Luke Hannan: That is great. Thank you very much.

Operator: We have our last question from Ty Collin with CIBC.

Speaker #1: We have our last question from Ty Collin with CIBC.

Speaker #6: Hey, good morning. Just one question for me. I'm wondering if you could speak to demand in the food service channel and whether you've seen any incremental pressure there.

Ty Collin: Hey, good morning. Just one question from me. I'm wondering if you could speak to demand in the food service channel and whether you've seen any incremental pressure there. Thanks.

Speaker #6: Thanks.

Speaker #3: We haven't seen any incremental pressure. I think demand in the food service channel for us continues to be stable. We have very positive working relationships with our food service partners and continue to see, you know, relatively stable demand from our perspective.

Curtis Frank: We haven't seen any incremental pressure. I'd say I think demand in the food service channel for us continues to be stable. We have very positive working relationships with our food service partners and continuing to stay relatively stable demand from our perspective. We're always looking to build our business within the food service channel. It's an important channel for us in terms of strategic customer relationships. But I think relatively stable for the most part would be the way to describe it.

Speaker #3: We're always looking to build our business within the food service channel. It's an important channel for us in terms of strategic customer relationships. But I think relatively stable for the most part would be the way to describe it.

Speaker #6: Okay, great. Thanks. That's all.

Ty Collin: Okay, great. Thanks. That's all.

Speaker #3: Thanks, Ty.

Curtis Frank: Thanks, Ty.

Speaker #1: This concludes the question and answer session. I will now turn the call over to Mr. Frank for closing remarks.

Operator: This concludes the question and answer session. I will now turn the call over to Mr. Frank for closing remarks.

Speaker #3: Okay. Thank you, everyone, for joining. I just want to close with gratitude for your participation on our call today. And, you know, this is a quarter where we managed to grow the top line again for the seventh consecutive quarter.

Curtis Frank: Okay, thank you, everyone, for joining. I would close with gratitude for joining our call today. This was a quarter where we managed to grow the top line again for the seventh consecutive quarter. We have expanded our adjusted EBITDA margin by 40 basis points to 13.4%, which in the difficulty of the operating environment, we are pleased with and proud of. Our year-to-date performance continues to be quite strong relative to our expectations of the year. As such, we are obviously reiterating our 2026 guidance, and we will look forward to giving you an update following our Q3 results. Thank you again for joining us today.

Speaker #3: We've expanded our adjusted EBITDA margin by 40 basis points to 13.4%, which in, you know, the difficulty of the operating environment, we're pleased with and proud of.

Speaker #3: And our year-to-date performance continues to be quite strong relative to our expectations for the year. As such, we're obviously reiterating our 2026 guidance.

Speaker #3: And we'll look forward to giving you an update following our third quarter results. So thank you again for joining us today.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.