Hormel Foods (HRL) 2 Sep 212021 Q3 Earnings call transcript

Good day and welcome to the Hormel Foods Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note today's event is being recorded. turn Relations. over to Director Nathan like Investor of now the to conference Annis, I'd ahead. go Please

Good morning. released the X:XX quarter morning Welcome to the AM of the call before fiscal third Eastern. for XXXX. opened We market our this Hormel results around Foods conference

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the pressures industry-wide highest team quarterly the while morning, an inflationary Company's challenges. Thank XXX-year history, chain third in sales everyone. operating and Good quarter, the supply In included you, in delivered our Nathan. which environment,

to strong all ability we basis. an consumer strength third the the sales demonstrates all and Nuts segments channels our is and as a model grew and step on Planters perfectly business. quarter, the Our our performance balanced sales X deliver Also X Foods business in organic of Hormel this demand into in in the completed brand vision acquisition we strategic This for Snack face our been has fits the the another disruptions. world, lost our industry-wide you effectively in new you our us for Planters our your has for all integration members, thank with team by The staying around which no members achieved challenges. Each members safe. strategy accomplishments team team allowed who To thank and our including were smooth, long-term to evolution. the unprecedented never growth business operate of accomplishments, of of sight

ever, Now, are business quarter in This of X%. is us in local across this proof restaurant, led increased a and XX%. to all-time increased XXXX, increase The XX% a and online, business than areas meal Compared food actions from and sustained our our Sales option. an acceleration of our on our was volume or snacking hosting friends, off portfolio. international likely be third at a continued taken branded our by demand will and an reach performance record performance Foods for products, ordering investments pricing when sales deli retail at quarter. business, to the the a growth foodservice Hormel of eating. more even work, with home, consumers cooking where across gathering is have allowed product eating at are our they it family more and Whether paying all a

X%. declined business, Planters the and volume Excluding of a partial quarter sales organic XX% increased

to the we the most is in meet labor. sales of grew levels perfectly positioned even foodservice pressing XX% an need foodservice impressive more portfolio XX% year. to today's is compared operators, remains enterprise last For pre-pandemic is acceleration What which increased as our compared business quarter, XXXX to sales Our saw foodservice

and Italian products their Our labor, today's time. Hormel of examples while that unique save Fire fully all are excellent own meat add X Hormel succeeding environment. Wholly in Bacon flexibility minimize Guacamole, and bacon to All the touch simplify Fontanini, food preparation, their to are Braised preserving menus. cooked products authentic sausages

such our Label, to also levels. XX% chart Sales levels [Indiscernible] of e-commerce friends. XXXX, pre-pandemic entertaining and component this deli An Gatherings, quarter showed Black to items channel consumers are on compared growth to up showed and is delivered quarter daily returned and time coterie as to Hormel of continue Compared Columbus this growth X% in in resonate as Brands to spending XXXX. growth Our business the Trays, Applegate, Party increased retail our compared pre-pandemic Hormel Jennie-O, retail SPAM, performance. consumers. growth important XX%. XX% and business with outstanding and and family of another with

and invest seeing compared digital to strong results we We pre-pandemic space to the continue in are levels.

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pressure, note, to testament our brands, inflationary to very we quarter, This second taken the have the labor other almost our materials, the high mitigate rates, brand During hard successful pricing across of and acceleration in level to with our freight, entire a pricing inflation quarter. sales raw To in is on the supplies, inflation Company. port of of saw continue direct product every a we we compared our our costs. an input and and this Of strategy, force. work many team, especially inputs power see

by pricing quarters. a As reminder, is through flows channel, this can shift there in how to quickly later and difference a profits

profitability a market of we and improving quarters. We the cycle, coming to improve expect margins have record through a in track

facilities in and an fully also automation operational availability and by our labor We To demand. operations saw This both taking inability labor This caused which a industry-wide partners. drastic in members, logistic portfolio. the to has impacted supplier across environment, a of has and the challenges and facilities, are simplify very manufacturing created operating customer step-up shortages. hire complex led swift address meet actions to facilities, implement team to we our retain

force operations prioritizing, dynamic done excellent direct this Our managing job and sales our an to environment. through entire adjusting, team, from has

sales organic year. levels and X%, lower to flat. decreased the volume lower Organic to increased last sales decreased and segment due XX%. Turning commodity compared volume sales refrigerated harvest XX%, was profit increased X% foods segments, and Volume was to

and to brand Party Label shortages. of were are the Bacon, Black elevated foods shown of Nearly look the deli Hormel and refrigerated meats. our today. well. for accelerated as for showing compared consumers Trays, Gatherings Similar sales production no Columbus branded quickly Fire solve Bacon Fully our Bacon higher as These and for sales exceptional or quarter of Hormel plant sliced business -strategy, is every the our performance team also new compared volume second are come foodservice last the down Omaha facing to -marinated, operators Toppings, Hormel include and with Brands I'm have compared X, has growth and Blues, today important category Our excellent continue as been cornerstone our levels demand signs just in challenge saw pre-sliced this prepared Hormel from never of slowing X, items issues that to all and pre Pizza authentic The designed filling solve to or the offering Toppings pleased of are grew quarters, Cooked Fontanini, in and they with standout versatile charcuterie. Applegate, and than new charcuterie which volume Product saw Lutz's lines. items demand Bacon Cafe momentum like items pre-cooked. the premium sales Pizza pressing with we the Fire Braised, to performances proteins, premium from grew products. and up BBQ. X, Braised, as most labor flavorful and Entrees, for brands some We Austin year, for growth retail that like XXXX. pre prior products H

and upcoming We quarter lines. consecutive X%, premium up increased for branded volume with increased and it's of Columbus the during are XX%, product delivered organic up growth, season innovative and expect earnings pork our sales and Total profit XX%. sales the quarter. demand fresh XX%. high about grew up excited exports Organic a of volume level segment X% and Xxth holiday International record

around many We SPAM, continue world. SKIPPY, to and see strong brands growth from food service the

brands to such perform by SPAM led continues China in retail as business and SKIPPY. well, from foodservice and Our

Our growth Completes, segment increased SPAM, Jerky X%. SKIPPY Hormel successful. the XX%, and increased new showed products item during Brands X%, the quarter. very Grocery volume snacking items excellent profit increased sales been also launches Beef Wholly have and including and

were of and relative Mary decreased Herdez. pandemic. such comparisons to We for pre-pandemic due Organic Hormel as Moore, Kitchen, extremely growth levels the sales flat. X%, high of continue volumes Completes, levels to the volume SPAM, organic Organic see demand the and parts early difficult strong XXXX during brands faced to Dinty

we on to our branded Additionally, business. support manufacturing have of capacity items growth numerous contract rationalized

earnings of Increased and commodity [Indiscernible], declined Guacamole volumes Our as sales space by Smashed volume increase. also increased significantly freight Avocado. of and innovation from driven impact the higher portfolio. results combination the XX%. Herdez XX% food-service delivered A Avocado excellent store salsa, across venture MegaMex entry XX%. higher driven as with and drove Jennie-O feed such X%, increased hot We're profit level MegaMex the being actions increased are tremendous hot to sales our Herdez Jennie-O and growth and into Turkey and equity with and a is sauce. the Wholly the higher from encouraged brands and by whole due pricing extremely segment volume from the sauce bird volumes The Wholly joint by Herdez, the recovery Herdez products costs.

stabilized quarter, remained the hedging we While actions during the spot increases. grain elevated markets cost took the

to guidance earnings balance year, net the issued to Looking of and the the Planters our reflect acquisition. we full-year sales

sales net from includes reflects business. of expect on the adjustments, billion per the between We $XX This Planters business addition And and between and to to impact $XX.X for our the $X.XX to billion. earnings a a inflationary diluted share accounting in addition to guidance to be costs pressures transaction be one-time associated $X.XX. the

finish continue foodservice effect, We expect as addition a from strong and continues recover, the to year to industry take actions of the Planters. to the pricing

the very beyond about Looking optimistic the feel fourth quarter, I future.

plant raw strategic to following disciplined are which portfolio onset the Toppings Pizza made balance major our ensure to on significantly in short to growth. employee in opened across wavered we plant a diversification us new making We for environments. commitment Further, the coterie capacity immediately investments completed will have invested many materials, expansion the Pizza deliver channels the X positioned allow long-term we Our and At We in our at capacity. representing in well strategic and of and pepperoni expansion Phase sustainable Columbus investments. Omaha, a Burke we Iowa, we pandemic, to our categories increased never economic our of perform Toppings. safety and with on

We for Pizza in launched at our plant-based plant-based items products. sausage R&D have Expo invested pepperoni the crumble in and And mid-August.

industry. and We to towards We people, systems, on both R&D Sadler's We shelf-stable by We Additionally, multi-phase Orion building implementation added made chain. distribution growth finance expanded and supply further chain the businesses. in and one Smokehouse, of and we our to network during of capacity by investing efforts bolstered for the China. HR supply our Project support continue processes. and our recovery the the innovation the progress investing centers, domestically foodservice in both work new acquired completed our portions out in which in refrigerated

for to continue our the We advertising we in Company's largest of make Planters. made leading And brands. investments investment the finally, acquisition ever,

are for just made enhance brand well-known benefits on up to business iconic, set business. us our and growth and We into to the the of have are to that investments some already a seeing Jim we can update large, financial markets. our regarding the call further on an input key These will discuss information have turn quarter. and future. to our time, I over commentary At provide Give cost the relating Sheehan the this financial many position,

you, Good Thank Jim. morning.

Advertising compared all-time to increased of million, of the the Third-quarter operating XX% last sales -related the profit strong for the accounting last $XX acquisition an net Company. increase. margins foodservice expenses were earnings international the segment, compared and record sales were increase X.X%, and per the related per $X.X were year. Adjusted sales X.X% by for for excluding share up decrease $X.XX. XX%. the Net quarter billion, increased Adjusted during last in was from respectively, results adjustments X% sales quarter, year. for and immaterial. XX% X.X% Segment organic were of and driven year. was addition Earnings the an COVID share, costs Planters. was to quarter one-time X% Planters a to quarter a $X.XX, SG&A Adjusted XX.X% growth

of incremental at XXth debt weighted consecutive of XXXX. quarterly XX-year notes pricing represents Inventory we assumes improvement unseasonably The per quarter average a driver working from we in last last rate to debt In show the The is June, net a Company's Company's Planters of $X.X tax debt the The low XX.X impact expect $X.XX flow The year This guidance the volume effective year, acquisition capital the $X dividend This billion to change dividend stock the XX% costs XXXnd expenditures Capital for quarter the decline tax unallocated during and Net of XX.X%. between year X, of by compared expenses to We locks, paid for and capital XXXX. the full-year expense. benefit. of share, Operating the is payments. quarter. years. options take and sequential capital primary issued XXX $XX increased tranches. uninterrupted of revised inventory. ideal an cash cost treasury increase in one-time as business. quarter. billion and effect. Planters our fourth exercised continue in in notes range result acquisition-related million. levels XXXX for completes effective acquisition rate the XX.X%. actions August X% a XX-year a and balance of We to higher a is margins an was of for onetime in target tax This the were million foreign during Including and the to consecutive The X annual rate profile the the declined impacted were quarter a is third over of the maturity structure. attractive levels issued expenditures the was was large interest the as XXrd X.X% weighted average our Planters

waterfall expect continue disciplined approach includes uses strategy. strategic, X will which or capital use changes growth to to of allocation, We no required, CapEx dividend cash. our to opportunistic and areas, I a

pork costs The inflationary We rating year. pork during prices input to lows and to XXX% years. XX-year Hog to continued the significant up compared The to pressures debt EBITDA the are in next experienced quarter. X X committed and over investment-grade increase prices third times X deleverage last X.X to were on in an dramatic business plan to to quarter. the hog

The at volatility. than year, Compared the XX% remained and and prices The worldwide Additionally, compared the prices we the with procurement, significant in from prior to elevated aggregate second were and balanced benefited prices compared also higher. and the inflationary XX% demand. prices higher to experienced up belly approach by in XX% trim foodservice hogs lower cutout the Driven quarter. last XX% as hog the composite pressure market. year, business belly USDA purchased pork to was to strong the pork the were caused prices of recovery

for of the input in during African quarter. impacted prices across of quarter. decrease Higher the the the Lower shortages fever compared higher benefit from year were [Indiscernible]. markets the industry The swine levels, industry, a Fundamentals the could cost including to negatively in the XXXX. commodity closely pork discovery labor monitoring whole the going labor the items, drastic Caribbean turkeys latest the production X% profitability. to the pork turkey harvest factors However, availability and indicate industry. USDA total lighter weights, across improved carcass for costs rise breastfeed, We're Both rate third size, and and estimates support impact the to input forward. in

egg Higher meal on benefits. corn hedges pulp cost. and below declined. placements sets operating Inflationary meal averages. have feed remain substantially stabilized soybean costs and on soybean resulted have feed significantly Additionally, market cost. historical Cold in strategic the and corn pressure offset storage higher The

We packaging, and for supplies, labor. higher freight, also absorbed costs

our partnerships are from trailed the actions increases. managing standpoint, the to We network portfolio, supplier minimize pricing cost actively during and quarter. inflation logistics effective, a timing but were Across

key expect market normalize a our inflationary pressure to brands. actions expand. impact price to demand the guidance lost quarters, We conditions products in of of is coming of for The issued the the our the strength and of due The the remainder and strong expectations for as increases recover leading profitability Planters year during the testament and conditions. includes volatile continued inflation to the pricing

in structure financial this portion also quarter transaction acquisition At business. structure, attractive in with efficient rating. investment-grade the tenor. question-and-answer our Although to invest history. move in future the capital leveraging the brands, and balance the closed the Company's and time, a the included an interest sheet We rates more its largest and to All stronger our through both turn We of call. the the continued debt We while financed by over had the challenges Operator milestones. third significant I'll the call strength maintaining for into financial

Thank you.

Michael go question-and-answer first We from now Piper ahead. Instructions]. Today's with Sandler. question Please [Operator begin comes will the session. Lavery

Good morning. Thank you.

Morning.

-- this Can of you be one. this maybe what as pricing kind you product, know, some think don't of maybe, you of might finishing a broad literally just you one, if as enough the elaborate just brand give appropriate. every for -- determined how said on sense us well And but and magnitude it's or into and and obviously was and your order bit next you coverage it year well I

only is no in I from and in move What commodity sure Good question. have morning, though, and Michael. we've That's on that be think think, costs is for is that this second we pricing environment the And, right across watching hit different been said rates, is is And quarter been And to that portfolio. really to we're making you complex what different to. Company watching, and obviously we're have is it away the freight and markets, that head it, those us. a when different but than third making talking continued that just And broad-based other packaging you us, sure that very, very throughout those ready. the timeframe. as the have prepared costs we been I just capturing food what's the you're any do not say, quarter

continue but continued to that markets broad-based we've taken do costs us. away that to we've have We continued to will have move as from and seen we have these to pricing, and to aggressive do

categories. We're what's really all by within elasticities categories. it's our the category vary the So and dynamics. we're brands watching It by with again, product, of Clearly, watching broad-based. happening could

we've is with that know pricing obviously the we're brand that though, it's we're forward. ready react and additional the a But pricing with pleased dynamic. complex really so that pleased the takeaway key very taken, And to performances, actions we're with some going we

accelerate? quarter, this it really should just report it helpful. that see was underway what to And so that's in clarify, pricing, pretty or the expect Okay, that just would third maybe we fully the from reflect getting to we

you mean, depends brand can the that I again, a quarter. got, category, on place but took and as tell, pricing significant Well, we've in

go over that we but that Some being quarter, of will into will as effect well. to fourth take carry that the effect is have in into fourth the quarter prepared also pricing

pricing to a going So some actions into of QX. QX, it's really in and combination spillover QX from be then new

Thank you.

Bienvenu go question ahead. Stephens, next from Ben with comes Our today please

morning. Good thanks. Hey,

Morning

Morning.

So the -- your per be on I results, year the the is so the adjusted implied towards Planters time when color you guidance, the business? full to us of you would this for deal. said you that's Planters in can think what you've impact share. of for want year like to core ask the impact get it on last That's from implied Can higher guidance end year the impact provided of some $X.XX balance -- looks about full the of we some give what clarity kind the in so on net is Planters

closing Ben. only business that transaction, costs that we business There’re expenses adjustments accounting transitional obviously as occur the some were type you're any The referencing to bring of with $X.XX those made. morning, is related transfer. always this events related and online. those Good so to That the one-time

dilution X those XXXX So the believe included. is in still those reasonable. are We -- to are that $X.XX

improvement in fourth and you if efficiencies. then of about margin helpful. the Can trajectory that And But to from sense here if want of meaningful -- segment's market quarter, see about recovery, on based would about the the margin business, focus the to system, I I price, be the the extent, you to drive the improvement business. could the But you that sequentially that outlook, margin think on we're seeing working really from grocery contribution I grocery pace recovery some taking the Great. delineate you of between talked sequentially relative costs Okay. quarter? give products products the to third think us out of and the take obviously, current in implied

I the you. business Ben. with could thing our portfolio. other the than more part Sure, start of do products lag to Probably mean, has think grocery longest I pricing. is any in the for We that first

always And been XX that terms average, through pork of so, for the and portfolio, we've mean, you'll how say And how days on see, and you passes across about think in taken that trim pricing us, roof. through. has I we pricing XX to entire that XX

been so said have ready been like aggressive, actions impact additional mix, in taken a in we've that got just bigger we'll have got very so to take we've And we've price QX. earlier, we've I And a and mix a effect QX.

We in have another round that'll be really impact coming in have QX that the XXXX. of will QX

you. Thank

Our next JPMorgan. from today Tom Palmer, comes Please go question ahead.

Hi, the thanks question. for

Tom. Hi,

circling Planters, XX about just in Maybe the million third to noted back you nonrecurring charges quarter.

on at to Planters to million so it fourth be that non-recurring look as clean considerations, I are includes embedded what's charges going for the is guidance credits And business? forward? these it's charges. Your or and related a either additional we quarter, extent then, mean, going pretty is or GAAP the there basis, XX

some adjustments transaction you've at of all the we the that that related expenses included in the be will the you adjustments million, XX But in which accounting say are and can't have quarter, million. think to seen of adjustments, accounting taken accounting fourth complete until end all of your purchase place. you make probably the and included think I are XX the Well, the the finished

come expenses Does you? this help that expenses, the still through the of accounting as expenses, believe we process. So the majority we that close the could vast some purchase of one-time majority but the is be they're

this that guidance or be is point? it number in anything to embedded clarify, incremental Just would at

That all-in is number. an

this that expenses that the is anytime The So that Planters. bringing into those GAAP is are with the Planters the transition expenses we occur that at basing pleased a into sales transactional we business We've on and transitional performance then called are you're and been your believe organization. what number period. we're with of rate out time that pleased or

that is number. an So all-in

Ben comes with Thank Barclays. And next our you. question Theurer from ahead. Please go today

you morning, Jim Thank much. very and Good Jim.

QX. something obviously, price about, you've to in and to Just back you've wanted done talked go increases the

You to in expect quarters. more coming do

offset the seen and of price you the increases. some On plans And terms consumers that to the price sort where very ones, have core reaction been some of brand those of for the customers initial strength has increases? you've and from in how sensitivity introduced by your

all really Really outperforming price performance pleased with the in face -- models use, we're we've we the increases. The of the typically of businesses been that those. elasticity the

to the question But brands, strength continue comments, going is is watch one important sales really in so your the highlighted brand in in, one, point the elasticities it's is think over have, that the in categories, I that that forward. our last the we invested we've And we the important that ever than we'll more and time been.

key As sales with we're mind, really, a success sure environment inflationary on have resonate of drivers growth. that for and recognize such they the consumers day-to-day our them making basis that the an and that of with faced brands is in our is one

guidance then, been if reiterating range that's about clean you Planters? teens fourth about Planters, would that comfortable of things the talked is going to feel look quarter how there's high we into for fiscal But And on and XXXX, you. accretion initial Thank and be. your

would we the we've we've out have other brand channel. business our the business, that X We said point, very I experiencing early. on is that seen convenience of Many iconic like satisfied in the all mean, in an already this are holding some got what? Maybe that parts in sales that We've weeks can the own -- At of quarter. X third or we're made up. with business the it then Yes. of But assumptions the the we're we performance. benefits

still with that range. very yes, feel early, it's at comfortable point, although So, we this

you. Thank

Please Our ahead. Oppenheimer. Parikh comes next question go today from with Rupesh

question. my taking for thanks and morning Good

given started within cases just So spiking I a any guess curious just we business. are you've on your see foodservice to of if COVID just that seeing number business, markets, that impact

labor, I And need for challenge so how mean, foodservice portfolio our and accelerate. really it to its about as think they just of our back not, that you they goes pacing foodservice have right? to to honestly, caught. the to have that continues And what Rupesh. And labor, aligns with get compensate we business shortage perfectly these operators are

And those a operators is selling said we've of we're direct doing it organization. helping for with is this competency ever, again, overcome so more advantage. which a it And challenges than competitive our those force, distinct

accelerating going we be all. we going slow incredibly we We're on business seeing seen what our foodservice So to portfolio bullish able achieve it to are feel the haven't and and forward. at

mean, Great. is the we them can And as some this how to share XXXX, for you blocks Planters it sounds right year? there's possibilities, see not we still I'm in initial look just there look as the going like other but you buildings to that then of question. to one Okay. And next at is are you follow-up fiscal something takes, wondering but be [Indiscernible] much year? as if accretion fiscal now any maybe willing out that's share, next sure way range you'd of and puts the I share clearly, any

going serve mean, Yes. be talked coming those and and that going qualify foodservice have of strength, additional it's our overcome our do well. to our early for pinpoint business that capacity labor business early. us saying is operators. great help the it an foodservice I operators. think continue what we're to it -- in to continue to I'm we as we bacon But I expansion, help some help mean, We that quantify going to But to incredible online 'XX we pepperoni to just question. foodservice going it's portfolio is our expect a -- about, or by for

as And our the we've Planters The offset impact all play. earlier, inflation, what from business, continued also news. mentioned that's generating. a of only international labor portfolio, run strength and facilities. in will with well. innovation what business And that with we're impact actions as our we that be the then, business the our the We You talked pricing but had would Mexican expect come the manufacturing base our good business, not that into happens to authentic MegaMex the some impact will happens will with great

about optimistic the on this unknowns And term. feel built we've side. of lot But business the a there's built think XXXX. good and we that how portfolio for really So how we're we've long about I

you. Thank

Zaslow go Our from next comes of ahead. today question with Bank Montreal. Ken Please

guys. morning, good Hey,

Ken. Hi,

Morning, Ken.

or us you smaller to know, the they that supply supply challenges? is Can and when feeling, chain And inflationary pressure will change chain are you be what the you're mitigated? than bigger challenges let doing

margin look one, at we efficiencies relates brought inflation had action, morning, cannot our other the supply gross the throughout had shortages inflationary we've pressure suppliers our labor that pressure. as strained some been we and certainly input shortages Good say online, margin labor The really labor question. that gross Not to that But our on but when late, we inflation. pricing at that At we've we the times, change, facilities, The capacity, really offsetting mix, because packaging our either lines notified, been our improved not chain. plants, has shortages. had and we've Good have at us times, some we've provide running have full into relatively shortages in overheads have Ken. only our products. look our us is or at let's

the third quarter, labor as we've creating So now. as the inflation, issue is right very think at really we It's pressure forward, we this we managed look that well. look

say it's of labor a So issue. more I'd

this linkage And and -- labor add the And Can to strong I inflationary mean, -- of in would between just all I is, you it? key to know, just as about said, what you doing are issues. there really the that, is, I like on you

costing So you to The with the that we us. labor more. have lot us have is costing [Indiscernible] Then is labor deal a labor.

labor. the So we're increased for pricing

raising have, employee that how hire. we're to in more we pools wages. were being clearly, labor the finding starting For aggressive don't We're

palletizing, have tell had that more retaining but I That are how automation our think successes you in all, in or reallocate our then, automate. ways to and placement, team and happen we about it's when through how would doesn't we disciplined And do packaged we to overnight, finding it we members aggressive operations. can pivot to more employees we've and We how manufacturing responsibilities. more be important simplify those

a our hand. in able one we victim really say, this what team all And that's that do is about so, to mentality, hand in do but And challenge. thing it? things those themselves the has to been Because really not find of are going go

you does a do just first are bank have a it just the Great. margin, I to is question, to will know be appreciate distorted more how first out does for just important, And and year-ago progress kind by have margin on with long framing that way. Which think least catch divisions I is of levels ask because to trying that my and because par it pricing able fan but next Just Which but divisions? up? the then sales it which margins which the then other trying first? I'm big division divisions, of and I'm that it. how at you have this to about are it think not out will figure take? to the just figure I'm the going obviously to dollars I

margin more is subset, seen it's the I but And within us also return through the obviously, Products provide to -- -- of only shift answer, and opportunity also in going time. for foodservice, really our structure some to, Refrigerated raw as moderation to depends. normalized think this Sure. it margin really a and to not going really Grocery to it over business give Foods, I a has hate we've is a we is I'm but growth the materials enhancement mix but good division,

So again, the fan answer, I've but not a to big give of got that.

costs. we relief it's that thing the quarter, early but point of in you I to one see the the that, the Ken, input would side pork on is

to you'd year. third some they're come of instance, the have were to XX. down time even off For in a expect relief bit, bellies quarter, And little averaging off at this XXX hogs in come we're but seeing trim. the Bellies

raw only that, that the Beef outside increase -- category. area continued. the other only has input is of second the beef we're and trend our material quarter, go from pork Now, seeing, and in that a started up to

give last to how long very we're the is a and quarter. this in you Again, near warning -- both important trend factor industry. same as relief to So I'll the did I going Labor is pork the in that seeing these term. are costs

Thank you.

from Peter today question Please next with Galbo Our of Bank go ahead. America. comes

good questions. Jim morning. Thanks the Page, for taking and [Indiscernible]

Peter. morning, Good

obviously volume which to a elevated requisitions in on for have little versus of A just that you dive stands questions or the I one, normal. a situation. wanted the X give range like terms about sense XX%, that X% few your us to we secondly, look somewhere where in peers positions. talked organic bit billion to corrects? your of an to labor use in the guess think the is of I rate pounds. of a of X.XX in of that can just then you kind number that of open at situation they terms it open I until as number vacancy like And run total deeper have Jim, labor could you rates trying that Is the Thanks. part. in of at on XQ, kind produce actually just least Just on volume was basis, kind good that understand

But operate to on ebbs with, mean, that be number, you're that flows depending Peter, in the and range us, I good ballpark. that honest you. with in mind, a well. rate week, would I as with it start the I think if for is you mean, range I think I

had quarter, volume this on always there's considerations level which about I talk does when a impact number. Clearly, we we think volumes. harvest dramatic lower our have

idea in on our got have what taking plants impact does closely. a we've produce. to to it higher we're level, the that able to labor so And But and watch of volume yes, the an

very human So perspective. a a we get the to that's do those and resource supply there's hiring a approach a automate, that priority in how higher do take We important your retained, done not that it chain why operations. you finding is and to from and areas simplify aggressive organization have absolutely in so perspective,

at the that doesn't Labor but to you you're give for, a is looking produce. does level. a we're for it the able number it high driver So volume specific

helpful. That's Jim And Thanks, questions. just No. maybe Sheehan, - Jim. cleanup A two

that margin guide down gross year-over-year? be for the to that includes said should the wanted we And I part, fourth the week, I XXrd sequentially, still On for the full the just improved make expecting but sure you correct? still quarter, the be sales second think year to

the the have supply dealing that with are again, issues this said, all-in issues that on week. as XXrd And have quarter we we will GAAP we in same improve have margins the fourth have the third same includes guidance but guidance. process. and we an additional to is confident in And that be dealt action pricing everything again, labor we pressure quarter, still There's Yes, going the we been still with.

operations and increased we've employment to find that know rate had our we and to interrupted had our as solutions. surprises go less we suppliers, But alternative our have some what out So have of visibility and is. have actually we've cost

situation, be I an expect it's of its would So trend. year last the still fourth quarter they will The had but improving but last would own I trail think year. that challenges,

Thank ahead. you. Barnes And Carson Research. Please from our next question go from Consumer today comes Edge

for talk international the pork little a swine bit the about especially Good with fever. respect question. you morning. Thanks demand, African to Can

Are that. other As work any to countries risks you business moving the through and China forward? seeing demand changes in or

at point, this really haven't We Carson.

supply, new on to really shifting that's to and pork open been our For international focused supply markets and us allowed price we've accordingly. really some us, ractopamine-free a up

on really business. side supply for that's driver been I the our the that's business, big So, mean, the of

The international if is be the that other just for we remiss didn't exports. availability other pork we'd piece mention freight and

growth, of continues our branded forward. the availability be supply Although exports going risk chain to in shows some freight a

Thanks a That's helpful. lot.

Adam Please, today question Samuelson next Our comes at go Goldman Sachs. from ahead.

This Arthur bit for was question is actually tackle morning. inflation Adam. a Good on hoping the could I we differently.

give for increased as that it's diluted also and actually you of in ranges, is attributable two what looking if $X.XX much business the take can bit about this the guidance imagine are pressures? inflationary color downward wide to updated a maybe both of to $X.XX the Thank range and a feed year. leaves much by Just impacting the As midpoint of we for of that revision. $X.XX How helpful. terms you how That'd at outside be some segment. if you. those could interpretation really And buckets is to in cost it

the to year, third grow is anything, just last has be still The recover in we're there about is that to additional pressure significant above to as going if that that labor will recently. it's they moderate, now. on organization. going recover all? pork probably expenses taken with And the be to will isn't from are pressure it issue that pressure that a we've to I those inflation. of the at to What throughout up think the -- fourth addressed guidance. be going talked issues. quickly away, inputs with quarter, taken pressure putting will costs If Beef that an challenges. we the fair to how And the it those supply issue are will issues those increases talked We've on freight inflationary we believe but Jim think freight our that the the or And labor, chain approach there's the still exists challenges we've business, happen will stated. was the in freight. so continuing issue problems incurring It's we we've going right to hardest quarter. ocean overcome freight is seen and that The in read about

and it; look the bad. identify pork beef I would I and inputs at as the how far as think categorize you

the we're hand, in foodservice recovery seeing seeing the other the we are still And tremendous strong demand business. in On retail.

a demand. It's is appropriately. matter labor having to available priced product demand for there and We've that's produce to meet the the So our products. the of the

guess you that shortages, due you. able shortages? with way the of there is And on labor to to weren't that point demand Thank meet these could labor any you magnitude I the quantify some

were it's just not that have in being it's a talked it's we up. have didn't think think we the sometimes supply chain categories that going what Jim it to as labor as available, interruptions -- that it's we were we earlier, about to we And [Indiscernible] I depends challenged. that the pop problem said,

I hasn't and significant labor across constraint. think by a of can't segment So single would -- constraint this it's the that I say is been impacted that

Thank next Suisse. ahead. with our you. Please, And comes Jacob go Nivasch from question today Credit

the you question. much for very Thank

know is guys by the but trying quick said here, sticky. bit of subside. a here. it tends little think you to one lot pricing guys you presumably record on a once [Indiscernible] perspective about be pricing, but just pricing. inflation longer-term sales for Just to have driven in one a past of does that I'm I And

what I Would like comes? So guys inflation to trying of pricing that full when I'm see kind you subside, guess, once when look price -- here I comes? we just scenario that stick? does the are Or, time to what does this pricing think amount expect this of thinking, guess,

is price The Thanks, takeaway time. over our these to margins demonstrated through key Jacob. to ability we ability from cycles, our have expand

as if you'll what you the think premise, that with start we're get expecting happen. to good I So a read on

through of you each as be go the different channels, will Now, it and different. businesses

acts You which have our segment, Grocery products like and Products looks more a consumer organization.

that will step. So pricing

tied pricing. more got business the refrigerated foods that retail commodity elements has You've our to

though, going going expand level mean pricing moderate. raw that What time refrigerated pricing going up course, stickiness on raw of my to back so, based margins. Doesn't material and And do, what that original to in stay That's as being move the Understanding, effect, is statement, to able is those expand drives how about foods. a we the to us. -- able are over performance. really it for materials in our current that's especially that of and we have will history And see pricing that you comment. think stickiness that is down we

you. Thank Yeah. understand. I

Okay.

from next Please, question the And Rebecca Scheuneman go ahead. with comes Morningstar.

for the and question. morning, thanks Good

I'm had dynamics the or reflection a current been lower expense? wondering something of favorably gross about SG&A kind than business just is margins, these are there I environment, once shaped obviously, came charges, you kind one-time look strip QX in gross SG&A that out how more at lines, But So up, at those your you are of when margins look also, the Planters lower of expecting. has that the lower. I if

think that Rebecca. I you have both,

exists. said confidence from First Planters very a we efficient And that manage has is we've acquisition, of about. I the the quarter the acquisition coming believe efficiency since that and given in -- we see talked we have you're we'd And to belief. in for that long able time that a of to there things the some this that knew starting the you in business do a manner. business be all, us an first here think Woodley(ph) did as

we at SG&A Jim As have higher added sales not we same said, base level. have that the a

that's first at. think thing look to So the I

other is One that provide Company. SG&A coming Orion XXXX The adding coming going brought believe a have make the quarter trend, doesn't It's forward is SG&A. about it benefit but to business our we've efficiencies efficiency in there and had into we of long thing that operation an we efficiency out for a a that in believe talked is that a in more time. We've long-term we the we Project that efficient that to with.

you much. Great. very Okay. Thank

the Okay. conference over any Ladies remarks. question-and-answer A and session. to Snee to gentlemen, Jim for turn closing - this back I'd our concludes like

at execute and Yet business they've business thank our continuing environment. Well, strategy And strategy. is today. we've for all built complex an you sharing been We deliver to our team growth forward In to for a our growth able update it's long-term operating to look us on more long-term in our joining record about that investor long-term October portfolio results XXth. by closing, success. clear incredibly sales

Have grateful operating a safe Labor While I work weekend. team Day and all am to our of to happy incredibly in still accomplished do, environment. we has difficult have and proud a

today's We Thank for presentation. you. call. thank conference This today's attending you all concludes

have and lines, your disconnect a wonderful now may You day.