Hain Celestial (HAIN)

Anna Kate Heller Investor Relations
Mark Schiller President and Chief Executive Officer
Chris Bellairs Executive Vice President and Chief Financial Officer
David Palmer Evercore ISI
Michael Lavery Piper Sandler
Alexia Howard Bernstein
Ken Goldman JPMorgan
Eric Larson Seaport Research Partners
Anthony Vendetti Maxim Group
John Baumgartner Mizuho Securities
Rebecca Scheuneman Morningstar
Scott Mushkin R5 Capital
Jon Andersen William Blair
Call transcript
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00:04 Greetings, and welcome to Hain Celestial Third Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. 00:30 I would now like to turn the conference over to your host, Anna Kate Heller, Investor Relations. Thank you and over to you.

Anna Kate Heller

you. Thank XX:XX thanks quarter and us Hain on Good year for XXXX third fiscal earnings Celestial's morning, joining conference call.

the turn webcast, like And the call of presentation management's and measures. financial today cause future a risks being could the posted Chris XX:XX it federal time adjusted and These the on on or Reconciliations today. assumptions report I'd in heading. President will events forward-looking information, statements and On based to Mark This Executive that on and reports forward-looking The securities of other few under Investor this financial non-GAAP a the note, made detailed website XX:XX laws. could the call refer of these are current available Schiller. also the to now, with the described to operations available forward-looking are Please presentation also are this those results time has be Exchange may and President of results course the Relations call. Securities XX-Q annual those Celestial's performance. Form archive its or Please Schiller, call prepared regarding over accompanying risks measures company slide discussion the make actual supplemental filed focus in any management remarks and from statements to materially from During Officer; that on These will the and and slides XX-K, Commission implied uncertainties additional and to XX:XX expectations and for expressed non-GAAP which differ Hain on morning and XX:XX GAAP Chief meaning Bellairs, statements. include and quarterly involve Vice from website. differ reports press within issued actual earnings an and expectations today call, financial Executive to statements and in company's release this Financial Officer. Mark Form Hain materially is Chief Celestial's release financial of the management's on are

Mark Schiller

morning. give we and primarily health by inflations, XX:XX conflict business market results color challenging ingredient Chris Thank anticipated call, and Day on share trajectory. discussed what good in Investor the supply quarter, and performance. some Anna I as our XX:XX QX and a business package will today's confidence, caused QX to led disruptions, impact consumer very and strong gains on underlying consumption On confident X.X Ukraine we’re Hain enable QX was additional the to had Kate, in the that strategy performance, a these Russia you, unexpected last on shortages September. outlook our the the quarter XX:XX than significant and softer us European eroding financial While disruptions leave in and long-term doing

Let me this feel way. why explain we

that was XX:XX we within that of issues complete expect in QX. North revenue most sales top will I’ll behind fact, of archive I are last we don’t moment, what do net years. growth of this short-term and share sales the know North into that was our we factors line and QX. strong a in continue company’s momentum America highest the In history, consumption First, some for sales our seven quarter have XX:XX quarter soft exceptionally were America means earnings Second, In while quarter reported a driven the international, while believe in improve you to impressive growth. details in these by that with in the future the

well the levels short-term in we’re exceeding are food. sustainable and as as growth. build quarter, cost are Looking will well-positioned and was X range, all consumer the we is strengthening in when are we strength To strong of while continue pricing basis on XX% take date, Although to even profitable it's primary reporting this [is profit, far, passing continue This obtained] the worth on facing been XX:XX Third, up have significant us above Number branded that one a North our industry actions Despite trial less as Sales brands noting two top share. pressures if taking XX:XX decision to the U.S. competitors consumption to long-term with know further supply and X% and in and most normalize. growth. average relationships. growth internationally, customers and rounds in nine servicing grew saw to confidence the pricing. challenges quarter are which line will than for we've for our [ph] we in and that conditions only inflationary ameliorate, taken allowing additional a XX% on we've we overall. reduce of momentum both don't to we into customer inflation the continue short-term loyalty, expect conscious expect since do our Europe has America, confident unit we industry-wide challenges, in the to us and X impact allow seen and our XX:XX priority for marginal to consumer we service and well be the share impact ongoing thus segments, here it maintaining that of is XX% Our

growth: focusing baby, yogurt, up divestitures, categories and X%. on Investor care. very To on sales for acquisitions identified six Excluding personal our tea, and a we snacks, that, recall strong were plant-based, XX:XX we're Day,

strong in by and of growth aggregate grown these baby, of make tea versus market up underscoring brands categories, and dollar XX% users loyalty. companies. XX% average delivered growth X%, in pre-pandemic and unit period profits, year on week again XX:XX and quarter, also double compared impressive strength brands growth which snacks, of year. than delivered to with unit led the of growth metric fact, declined up The also a the food very almost Our was every in of is a strong for consumption these ago, than single gained brands XX% gaining unit to the their four our aggregate, that Household and important brands our up double-digit Compared Hain X% about these brands. delivered brands grew these XX:XX we've growth its ago, pricing brands more food all X% consumption velocities and share with categories. growth In growth velocity for growth unit was X%, brands size year while share XX% that the XX% in given on the we're penetration growth of more decline More versus this up quarter, of respective volume relevance. companies rate our indicating velocity a

our buyers than snacks In fact, increase strong our to and than quarter. XX:XX brand compared baby particularly in were purchased buyers categories we past and grew heaviest less X% and Xx the levels, Category increased more a quarter. year who our this XX% XX% in past

share pre-pandemic the grown portfolio and last the XX% and beginning pandemic. is up which X.X almost snacks basis year penetration XX% since was levels. of has XX% levels. XX% a penetration biggest pre-pandemic company's on year compared and one-year versus ago over Our consumption to versus XX% brand the with Sensible household up Household XX:XX XX% grew Portions, points versus

quarter, was total strong XX% consumption products. these year. of penetration QX. both quarter Alba XX:XX with share household XX% up in unit Earth’s versus club first double-digit, initiatives strength example Our points and grew of same food Club hair channel Care, up inclusive to great with year Dollar particularly the of and fiscal these some challenges Best was driven addressing a in up of of brand quarter, total and businesses. last programs will XX:XX and consumption Garden also growth and pricing into the Both in we're the Terra also the the market very was macro of indicator XX% X.X strong up supply half consumption which Personal double-digit how well underlying of sun and by Club in on in double-digits. Eatin’ For the while quarter net positive challenges struggle up PC sales e-commerce was returned continue in the were a of

affected Shifting start costs. brands the costs, our conflict. were consumer people the anticipate performing are additional XX:XX the store has XX:XX To ingredient we of all and to gross margins entire Ukraine expected. QX P&L, we their softness, Hain line, was inflation are ago materially in grocery cancel more the planned. First, are own. predominantly Russian of these Wages shortages, the brands growth significantly In X% in The X%, these continue in to with in constant and what X.X. face down decline, plant-based with were quarter. three therefore, part almost and be earlier expected easier outlined driven forward, pricing exceptionally This a dropped of drivers fully pricing their well will inflation, since go-forward food contributing increased total growth we showing and trade-offs guidance. Second, potential across about XX:XX were our major in to future compressed the disruption There total making XX:XX gets and middle quarter. improve primary and top costs, categories, divestitures XX:XX below took we reflected rising keeping currency, and international, with overlap increases down revenue offset of consumption. will going line price adding had the North we store thereby America the than declines up in issues sales in significantly expense labor Looking mitigate aren't beverage which of customer well however our as in Europe Europe, sentiment by QX. that impact The concerned in quarter, X%. we orders forward. bottom year erosion a units our So, the the sales versus year the lagged the including down expect is challenges were margin to fuel unexpected In excluding

to good at chose several in As we those a to eroding strong multiple that set in got a cost. on few we minutes. accepted, by came hit will QX versus costs excited lowering expect increased driven lagging retailers The and a benefit in North to strategy, line we've weeks by volumes. new prevail give started short-term the to the our volume the category expect international driving be will the increases. We're increasing optimistic and both the end P&L, last at price the while lost growth reflect here to already longer-term we is million the resisted performance the fourth look by a have in driven all recall XX:XX X.X we the to last a result, excess news we’re is America. is existing margins our the you company, of hard lower initially margins the predicated of pricing The direction is, and of on us were products within the XX% discussed XX:XX sales on remain and to and headwind and we replaced to costs, Third, and nicely Hain and to in distribution, increase retailers year. $X our We we continued the anticipate lost of the and of our creating categories expanding issues but stop sales volume this improvement versus place we year, customers close share price sales energy to quarter. shipping increases, brands about going five With QX. overhead top still entirely is in a earnings entire Pivoting marketing inflation, who the line Chris short-term quarter to call XX:XX which guidance customers now innovation, took for good brands. As fully our and capacity negotiations, that therefore, of last growing almost core news eventually the details hurting QX, forecast strategic of shipping quarter. middle the stranded four growth to during on expected and that pivot impact improve sequential we in not lost and In XX:XX more increases now category QX, that our You'll in growth our to and sequentially. selling growth

levels through at expect improvements our both pick strong we distribution and using and we've in-stock service trial more to into opportunities. service incremental us up growth While gain merchandising those to has and unprecedented inflation and shelf. high significant time, marketing help over invest the robust been brand dollars strong in offset productivity XX:XX drive short-term, The to enabled

DCs, headwinds, Ella's momentum our remind growth the future continue. X more earlier, despite challenged and North Kitchen, I'd part fully That's XX% are in QX, How XX% category. our result, integration confident our remain we XX our are and conflict Just deliver high-growth grew expect is our in in more Roll that of assumed As I'm synergies Short-term, identified how We made originally brands you our ride some to X to cost. bulk-up share navigate and XX:XX on XX:XX of our America our international the the trucks volume, free the brands the future. we is quarter basically week, future for very a margins has all we to business which growth we're for Russian well-positioned As strength mentioned positioned products the and report at on XX:XX bright. Hain to expect team going is brand show consistent many growth. straight of are over across momentum Ukraine off that truck. portfolio in and receive increased earlier allows for was focused sales Brands We've and quarter strategy, of pleased have brands snacks the certainly signs of and ongoing for the our sales the products EBITDA strength environment, lost seeing share X.X time. which one the consumer in macro we intensely that co-man strong and portfolio than double-digit plant-based acquisition to this XX:XX XX:XX to we Number than brands on I customers everything the the While angst trucks. that How the order products its but reducing the these invoice on well. clear allowing and we that Roll also one-hand presence the That's grown mentioned have We recent and well in nine we're years like for in to and co-mingling This started great [indiscernible] takes as growth more I we road, the

[ph] report short additional to we reductions. and That's into resources on one Roll to we our our Chief chain more eliminating positions additional Hain, and elevating Three, We're critical and supply co-manufacturing leaders that, to planning driving seeing, their With set teams efficiency, five, and within adding forward leaner embarking for strategy. support eliminating growth and more call. over the capacity that sales short-term resources pressures Chris more productivity up of already a with changes of in on the X.X make restructuring of brands org underway, are reassessing effective and on in and headwinds future. our us XX:XX me. role, and and increasing to goal the Officer it deal Four, some let medium-term of to effectiveness XX:XX XX:XX accelerating turn and provide Among forward, look Europe and and our we rightsizing go As restructuring on deliver cost we're Part open categories. the long-term resource roles the redeploying fill opportunities, our changes reducing confident directly me agile next growth, cost we're are guidance. [feed] performance XX:XX growth to restructuring costs. and many address purchase these about us to the Commercial to increasing details Two, design now allocation other will with inflation reflect detail Hain How the teammates We redundant to infrastructure many more short-term to Hain’s. provide at will integrating I complete there. the the And

Chris Bellairs

everyone. morning, Mark, and good Thanks, XX:XX

results demonstrate challenging, other of of growth given Hain’s very said, into a XX:XX financials, facing are industry-wide. unprecedented we and me as X.X to a execution building QX that let third move highlight strong platform aspects Mark solid turning few quarter of the transformation plan environment As journey. that our was our Now, companies key the we and

First, more year. year of quarter. the total sales versus while QX approximately up higher growth X% than basis reported North sales X% third America the than in More brands points increased XXX XX% in M&A. prior net than the first excluding net in XX% the rate reported Hain were growth period, in half North grew and our Second, the XX:XX America

look And sheet are start fourth discussion balance line sequential quarter, XX:XX flexibility. our already the finally, improvement and encouraged top of with Hain. to capital across a good by are we as Let line with bottom remains top allocation seeing forward the results. our me we and Third, strong we

than net these During quarter XXX benefited discontinuations factors, After sales and sales labor XXX versus driven availability, the net points, by quarter, prior freight industry-wide by the and net loss and expected shipments to the and year basis inflation in carrier net pressures and XX:XX about acquisitions, by basis gross cost Our prioritize we consolidated consumption by chose unit, strong negatively of were as finished reduction a impacted to in EBITDA year-over-year prior issues brands growth margin we marketing year international UK, in including account, incurred halt price XXX in U.S., partially cost quarter adjusted international soft by customer taken decision $XXX increases points. sales selected store business to temporarily a on supply quarter operations adjusted from driven XX% resulting period. Third that non-dairy service for resulting we total disruptions, Foreign divestitures to disruption sales productivity. of in lower Third basis ongoing ago accelerating by compared at sales partially experienced with the non-dairy year costs Total during Grocery negotiations. year in sales declines a freight prior price raw of continued of other deleverage. the XX:XX date to made by chain sales to in third SG&A, period. the shipment mentioned increased and negotiation offset halt inflation we've period. higher adjusting The the by co-man sales U.K. customer, from XX:XX million, year the XX:XX increased brand material co-man to warehouse quarter, previously fixed Channel chain offset the X.X% price compared large goods came decreased, X% million, and shortages, the Exchange and net loss primarily supply large while in-line reduced points. $XX.X driven to we by a and approximately exclude

our third adjusted Our compared individual as period. segment starting XX:XX decreased, of North let with to year detail in quarter some we continuing and are $X.XX on American the earlier, prior see consumption. $X.XX in business me momentum the gain strong Now, to EPS provide Mark said where, reporting share

the XX% reported XX:XX million. third sales of net year the for prior Adjusted acquisitions, increased to net exchange year-over-year more about for $XXX the movements, increased sales line, versus foreign quarter period. by top On than X% and divestitures,

net period, versus brands on Our sales delivered exceptional driven close performance the snacks prior to the growth brands. by year XX% growth

period the North quarter to expect in the margin From XXX by American prior growth a basis gross strong profitability XX.X%. decreased to XX:XX points perspective, momentum continue brands third during for adjusted our We business year QX. their versus

to with store to are catch margin, industry-wide have productivity EBITDA XXX fixed in loss of which From our inflation, customer, the the $XX Net energy basis for during with of margin price prior reported profitability a a to was XXX headwind QX by quarter. headwind the a basis increase versus versus actions cash months channel, UK. balance Adjusted impacted nine mid-single-digit XX:XX XX.X% million million me pipeline a the QX XXX business. halts margin cost a the in points the driven pressure year point Adjusted by the the by beverage flow XX% on in While we for versus customers prior adjusted $XX gross Adjusted movement the the year-to-date impact XXX major points the supply EBITDA North basis, standpoint, international million driven Shifting prior and sheet, year year flow XX chain profitability certain for UK let of shipment decrease the of business and a period. the year of Consistent our versus prior robust XXX XX:XX deleverage. XX.X% EBITDA million declines the gross of third decreased our a Grocery the $XX and non-dairy prior prior America increased quarter up basis represented XX:XX from international year Currency in the challenges basis EBITDA adjusted period. the sales in year in XX% taken period. to operating XX:XX decreased was was point margin represented the on Now and period. decreased beginning period decreased basis of of the negotiations decrease year. the for points, first to quarter, cash the costs with pricing QX and across period. XX% shift

company about chain Capital than $X claim and fiscal supply under prior expected first flow spending from challenges was While Act of the refund third million which million, months for spending reflected quarter labor lower CARES a XX:XX benefited $XX nine year-to-date tax $XX availability. operating the by the cash XXXX. during the year, given was versus lower the of million

leverage, of now] QX stood was our agreement to amended credit $XXX We calculated expect X.Xx. Cash [as to end under quarter with hand the sales $XX million, [ph] net debt XX:XX target. was on levels our million. Net net in the X% in-line return of at debt to while at X.X%

of outstanding significant the or believe flexibility we Consistent the principles, X.X and as at million, quarter. commissions share return to excluding during XX:XX of we stock, at quarter, shares shareholders. the about allocation Our sheet $XXX and to we end in million of $XXX $XX.XX our strong per the remains program the reinvest authorization X.X% price both our turning million additional total for balance with value leaving a an repurchased Now, with to of us business a our average result, have outlook. XX:XX repurchase capital under common XXXX approximately of third

higher reported of quarter margin EBITDA we pricing SG&A driven versus expect lost sales with decline, expect additional This projects the strong implies adjusted sell prior adjusted quarter, should expected an is This fourth The first to decline. throughout we full-year to basis And adjusted adjusted QX. XXX Modest flat fiscal are additional XX:XX coming sales acquisition the costs, QX, volume, driven plants XXX modest XX:XX fourth overhead, net sales gross of normalized than of Roll. improvement versus the margin Sales prior growth as and rate, low-to-mid year net approximately QX year XX as That's results higher the adjusted the points productivity office. We net of see with That's in approximately XX:XX versus growth the from single-digit currency For gross significant total the continued net million including year, the lower sales continued QX Roll Also half growth, headwind. note, How that reduction dollars pricing, How growth to reduction the commissions, sequential sales and sequential America implies higher absorption double-digits XXXX addition approximate brokerage of sales. related QX by benefit approximately versus due year. grow in expenses low-to-mid in grow improvement improvement people be growth single-digit North improvement point adjusted and taken with sequential full return low-double-digit mainly behind we We store by our EBITDA international negative adjusted to in fruition. and some net co-man of to consumption. XX:XX volume versus QX less get and

highly environment In by Hain navigating by strategy. guidance Our to the the EU. of deliver by and in call the business EU ongoing inflationary under, pricing line XX:XX and already North achieving back are will the encouraged updated strong to UK Mark. offset a the XX:XX that Grocery X.X we've America, and challenging we [soft] UK store very full-year track are the disruptions, top and I we [ph] are are taken remain summary, the our supply momentum actions the environment in trends chain now on turn reflects impact and improving operating we

Mark Schiller

XX:XX Thank you, Chris.

turn challenging overall we're we While our our by we momentum, the take of questions. macro nimbleness. work, your we I the certainly and reducing over all improving for our team American to a was basis Hain let navigate it can long operator want of quarter, our teammates haul. our confident QX so XX:XX importantly, international And Executive to and X.X current On trends headwinds. the encouraged their Board me ahead, on optimistic thank as North top cost behalf potential back line about laser-focused and in Hain the Directors, hard tenacity, remain strategy and With significant that,


Palmer first from Please question [Operator comes the you. David The Thank go ahead. with XX:XX Instructions] Evercore of ISI. line

David Palmer

remarks the to about interesting we're at pricing part new year into time be going you XX:XX ongoing prepared me your there of your morning. of Mark, and fiscal that that kind guidance. comment coming Good reminds in a, a a that of year. made out an It fiscal

taking? what of margin expecting of are these here? pricing So, that? what that you sort from I sort are are you you wondering, by do ongoing performance reclaim mean actions I'm mean, What expecting you

Mark Schiller

and was quarter. took that of the in we Yes. The the comment script David. XX:XX third middle the pricing basically morning, Good

pricing do Europe. while in it Inflation, comes preparing bit, a said, down not that list have QX, planning We be take So, certainly we of look, frequency, continue depth terms and to of will and the take that surgical our additional price multiple we both in and And of strategy, have looking to held changing we hopeful increases ameliorates up in and volume and well here the our expect in in we're but full it's realization to have to part weight we're so that need we happen in XX:XX that of just levers why of those going has etcetera. this environment. that we terms are already will trade double-digit we're pricing it how at face that's the and whether been in as will unit increases, pricing, products, of for pricing.

these expect the the vast facing. using will which the cover intent. And we so, supply time we of generate pricing over cover to And productivity take enough we're that we're our to was majority that we disruptions costs, really that

David Palmer

gross just that In I'll times where one. aspirational are keeping may past over but better you've know, profit the talked not you gross might by be line gross a a you're new the margin dollar, to XXXX, you nominal able top ask XX% sometimes fiscal down target long-term higher leverage line. pricing to up if margin these and EBITDA the for that And is of margins be long-term, XX:XX about

So, that achievable I'm XXXX? how of wondering in gross thinking you margins still are XX% are fiscal

Mark Schiller

between Obviously now expect a have XX:XX time Yes, great dramatically a inflation will and away, certainly then. and way lots down then and XXXX of I that in now long so between we it's question. would come

have because tremendous our who come the on service with XX:XX same keep low we to making this lots can and will small else significant are shelves does. down the the penetration the we customer for time. as struggling the everybody that we've to trial supply. conscious household over we short-term many And with prioritize scheme there keep ability margin pricing in over of and see sticks margin relatively expect are holes time in getting service us over full is the obviously, decision if And costs we relatively where shelves and we moderate, expansion and so, brands the that are of got Short-term, things headwinds it

short-term, So, confident but to our continue some we'll pressure, see to we margins over ability time. expand are in

David Palmer

Thank you. Okay. XX:XX


you. Sandler. from the Thank XX:XX Michael next Lavery ahead. of Please The go comes question Piper with line

Michael Lavery

you. Thank Good XX:XX morning.

Mark Schiller

XX:XX Good morning.

Michael Lavery

a unexpected next your how international to you're XXXX planning don't in energy should you maybe outlook the about can get want too pressures, has of some we we what bread flow of how for should but if realize on maybe being some especially the in I through? sense XX:XX great. give detail on be offer this yet, quarter, would we headwinds into just the few you year, Just can next thinking keep mind? changed maybe quarters or most any had something certainly to expecting you the sentiment crumbs is for the thinking you there Specifically headwind are cost much

Mark Schiller

when XX:XX environment kind us not we a about obviously very planning time, has in our Yeah, to a supply of deeply we're any things give gave us war early too and terms both we to around are XX:XX Ukraine changed it's inflation for remind pretty are challenges. the talk global bit So, in say What here in of would guidance continue. things and folks XXXX guidance volatile real QX, all for Russia started obviously changing Europe I I'd dramatically and little though early XXXX. is, to had the that it's and where for it and for yet,

We cover. taking additional are to pricing

ramping to supply locked we've well. service up and can increase that up and ensure remarks we the restructuring, as to the in We got and so business I prepared our mentioned are productivity that resources

lot going And months X, the going of not. they're short-term whether in XX so, about few terms over lot Russia learn being to a XX:XX from we're because the happen and navigating going down by too or aggressive to months headwinds consumer next now We're about headwinds. war. we're to It's talk early about learn how very Ukraine sentiment to handle we the the trading a what's X,

it's put stake a so, pretty kind of point. the ground early at us And in this to for

Michael Lavery

it to That's I in you impact dispute that helpful unusual I is love little And mentioned segment. understand seems the would the can there any a a you and I on pricing, on situation sounds it brands, just just though. better. I up like That guess follow-up international event. residual and going kind Can forward? just there color maybe guess XX:XX like was played us out retailers. what bit think, few a catch of And if that what few

Mark Schiller

XX:XX Yes.

retailer – European much Canadian market market that for they that are here. aspect than the more consolidated the So, for are and example

presenting so started were more there Difficulty] You than negotiations always That retail our been and on has bigger have said, increases difficult here. fewer against we pricing is XX:XX like it stabilizing. Difficulty] things [Technical price [Technical

retailers getting come pushback to on costs continue, going were some going to whether or energy so the down. And as whether to were not were costs we

The forth in so increases, news price And that firmly you to say, able place. to negotiation, if the and and those good all our the get of retailers and a we tough going not ship weeks the to decision not we accept in made is of of after us were now going couple product. you're are not to we're XX:XX price to increases shipping, accept back

is macro inflation are worse, better So, what's or a learned we better. the retailers is getting not perspective I and clearly worse, and whether getting lot from it’s this the inflation is supply on what's not transitory that think it not, really the challenges requirement war getting getting of

guns. And so, our we stuck to

that consumer. we XX:XX we're it. trying passing on Now, successful going will we going and certainly is significant to ultimately take that, and and but disruption any we're in forward, sure more the to again, inflation to associated the are passed were reflect forward that We no get make on and our increases to is anticipated costs go with question doing that guidance, has There's

Michael Lavery

like it Well, reflects sounds and getting the in, demand XX:XX it consumer too. products ultimately the

for and for questions. thanks that [ph] thanks So, [clarification] the

Mark Schiller

need brands, nine right, also and it with X the our the of strength X And brands, products. share the Yeah. retailers reflects XX:XX Number

shared X, have an soup brands [shelf] example, is We the very shelf X short [ph] X, which life. Number as

shipping is lost. period that during lost not we whatever of So,

not you depleted – It's in short if it appeasing us. XX:XX a certainly retailers, costs. and but from to sure product work partnership make our accepting not a It’s they're covering the when retailers but good like comes dramatically to hard is suffers we going product, top and position have shelf We’re very the the So, not to a we're category that inventory life three brands think category, it's back. we negotiate. also we're in

Michael Lavery

XX:XX Okay, Thanks. great.


The question Please Howard of next the ahead. line with from you. Thank XX:XX Bernstein. Alexia comes go

Alexia Howard

morning, everyone. you. Thank XX:XX Good

Mark Schiller

XX:XX Good Alexia. morning,

Alexia Howard

Okay. XX:XX

So, and pressures energy and to Slide packaging, basis chain let most of feel where can it related we XX, break the XXX supply inflation composition it input last last disruption? possible the of much was shifted of on is specifically, freight to the for input quarter? and points how from ask it we us chain costs and much have know that disruption, You changed when gave supply the Just And have much dramatically a that how down the ingredient about of was pressures? over headwind from was freight have couple months? how big and guidance so you what it of costs

Mark Schiller

Yes. XX:XX

inflation double-digit across seeing Alexia. we're everything So, almost

packaging, freight, gone labor, have ingredients, So, dramatically. up costs

considerably changed original the versus wrote back when the gave certainly guidance and last that plan So summer. original we

ingredients Russia double issue about to have to as at which effect And oils, they're those packaging an inflation our often prices any shortages, business. originally We're coming oil our ability find the which With our certainly, business, premium planned oil we oil XX:XX prices becomes all of affects XX% question there from contracts the the Sunflower up freight. example, seeing to Ukraine said it, impacted ingredients are regard XX:XX of on have Indonesia, to the supply of is a XX% affects have while gone knock-on a going going the on alternatives regard is get which cost. which dramatically, like from We snacks export not and there palm our that have so, within with coming gas supply the had World And demand things of up. we for. when quarter, with we spectrum to and of challenged

a environment cost. alternatives we constrained and a very seek And so, to in find that comes at

of originally guidance was the when gave we for changed planned versus part a what what QX. big And so that was

Alexia Howard

much And as factors not How the then to are things follow-up, weeks pressured trying just qualitatively, you. the several I and Thank it that those it shipping in that? piece, able sales overall hit you in you this you quarter? were top other get know was like to And short-term saw quantify And Thank retailers that Europe. XX:XX a them factors decline Europe? if the line the much of I'll short-term we that like pass outlined to there of your how on. versus co-manufacturing

Mark Schiller

XX:XX Yes.

So, were would softness, X%. was Food the first that's thing every down store in X% total down is units I total store which UK was category. out down X%, point the and

a us robust that volume had to for. that down. even major volumes co-man repatriation, in of if consolidating decided of earlier year be we but attributing non-dairy color shipping we going environment the shipping, third store share, than sign an the much as on where kind the stop one third much lost planned our customers unfortunately in XX:XX how hard the our we're caused that distinguish a how a that is extremely was So, gaining the provided, in of for is by category, was versus the to store the was to It's stop a which the at by rate, fact to volume. strength we're a are example, beverage to add repatriate to the we roughly an coming charts soft knew a caused market and declines, was the and store third as a quick And to the still co-man, of just it the

share is. has where And so X we largely volume. and in will gained plant-based our resell in XX:XX the points volume that months, label beverages XX The private last that's

time gets already from be softness all get as consumer in have So, We confident XX:XX look at that better chart we the the we quarter. was So, expect as replacing volume remarks, prepared also the in that fourth there, also that to if I volume existing said the wait that that have over you we'll of not end by in for quarter. in overlap see the an UK replace back. for just going of the into And we'll get we're the to you to to replaced fourth us another half is expire issue. contracts it

So, got that from we've to here. improve lot are a believe going trends the of reasons to

Alexia Howard

XX:XX it Great. Thank on. you pass very much. I'll


ahead. next of with The JPMorgan. the go Please Goldman XX:XX from Ken you. comes Thank line question

Ken Goldman

perhaps you comment it’s and third you not Mark, something take I victorious consider the in obviously pricing not to affect how we short-term emerge might but for happened or much. as the follow-up some shipments pricing without so see did wanted by what that's understanding on you a how consider EU, the in pain. Thank Hi. next in to much needing taking but lot XX:XX round? quarter U.S., withheld more super does You not that words, the your in your uncommon about think about, with EU, the

how there? curious process just you I'm balance So, factors in those thought some of your

Mark Schiller

Yes. XX:XX

first and partners. the our retailers foremost, are So,

In competitive at we're We're some continue at have give XX:XX and our going do have. pass we a price inflation We that work pricing. surgically. look it data the we gaps some set. we We with So, end to that look price look thresholds. both. our to versus for out We productivity. we we We at whatever was we with of our win-win at little to elasticity on can't We had, to the needs it meeting cover a their cases them needs. get but in, just pricing went make negotiation the the had sure to with in day, the

we're across the throwing x-percent out pricing taking, pricing. of It's an so, just And kind It's surgical. or board, very very pinpointed. not randomly

Some of it will be in list.

it Some will be of in trade.

nature increases be need pricing our pass-through both meets get as will part for in readouts and needs. it us we a and to end the and that of the day, I that's need we Some way but the for negotiations a parties. that of mentioned. of we way works retailers the us while At the price Europe. in a retailer’s of find needs, XX:XX the it the way may the So, do And retailers in form meets will challenging difficult, may just take also and

Ken Goldman

quick And XX:XX then Thank follow-up. you.

will this bit, now free it toward pace fairly stock flow anticipated ignore due? aggressive a the it. attractive quite heading been repo this too to You've previously is as you level drive that's may that off much or little Just year, to cash cool you that with as share you maybe is see assume as evaluation fair not

Mark Schiller

question. depends capital going for what great not a and XX:XX uses Yes. a to because between we or it also that's other on that have. It's cash conversation answer I'm the give for us and Board specific a

There a So, XX:XX that part opportunities some another. of share is so acquisition is there course, then pursuing we're agenda includes for and our needs automation, productivity capital. be still buybacks lot of will of

may we're we repurchases, get for quarters lens decide So, at be things same to it all other of some look the be best and may going and these or where through the highest that return quarters maybe shareholders, capital M&A.

we've hard decisions. me until you it's those So, answer a for to specific made specific give

Ken Goldman

Thanks. Understood. XX:XX


go XX:XX question Eric The Please Larson Partners. Research Seaport Thank with ahead. you. from next comes the line of

Eric Larson

XX:XX Yes, question. Thanks thanks everybody. for the

your of pretty America the very is we're So, more here there North the even rates moving in Mark, pieces in in a or there strong of problematic might of and inflation lot possibility consumption situation over U.S. seeing have dire maybe there is in prepared well? in talked than trade-off growth Europe your as consumers getting stretched maybe are obviously, little I here, the becomes as we slowdown maybe in a a are is trading down, consumers comments, but concerns this but now what think U.S. also you about one more in

Mark Schiller

Yes. XX:XX

So first – question. and the for thanks

we First, are UK, that a just label also I would the in private know say supplier.

where of there. the us the housing side lose at we tend store I all nothing recession, be one inelastic. affluent more down, a they XX:XX Because North behavior not for So, as on X% much declined. crisis time a last the during food and XXXX. XXXX since consumer, to our go when more grew have much to we That's healthy back we an In America, you trade you and consumers equation change is, what benefit it's the may or if would tell but another, on equation

that are will in what and not going strapped some Now, I'm much gets isn't softer assess to of but possible wallet, paying income do closely, used that and obviously – is our watching suggest food pricing because that just certainly more the premium the kind versus some set. I said, healthy that however, that argue affluent the a that for people we're people income XX:XX the as and more consumer. if on consumer their as continue watch competitive pricing, not we and watch history down we'll it's price gaps affluent that see affected lower middle based really exceptionally and would we of took to is, trade do it impact We economy even our that going we're to are much

earnings the calls, we seeing enough, inflation that on will that we're watch more to to expect closely. as are closely, we very at expect an decision with all. we the we didn't and And where versus So, those right. of dynamic pricing to cases, two take XX:XX And these a cognizant had take made learned from that those in adjust where much example? to set pricing very from you’ve our price down. opportunity very watches that We do fit that take a we others we There's too watch gaps want buy robust we their we've products and capability that pricing as have closely. be other more organic to very We and organic, our competitive others up pricing the back because they other first took gaps going words well. rounds relative And are and we've or maybe didn't of to go if heard times,

Eric Larson

and could can question seeing idea that for you've of one obviously, we with productivity of Okay, show of of productivity back us that that’s a in know some and then but an – three etcetera, little remind give inflation, thanks. my the step productivity, XX:XX a is, of the of us long-term start here had incremental P&L? cost might us been what give the ranges guidance for up your last you And years, the you color on big you here, more follow-up timing then bit final positives question some

Mark Schiller

tell continue been productivity that. What generating I and is would $XX we've million $XX which Yes, we that of expect XX:XX will year, about to we do X% million to a around the resources some capital months, to and things of just formulations to as have in six opposed to is like though automation three our you things last shifted that. projects like productivity

an Garden ingredients ingredients that that us And lowered XX:XX digits formulas That's formulas very reform and are complete of closely and up cost, seen for now haven't high source going and the in So, in combination big we looking growing minimizes well-positioned productivity all, certain to in we already and environment our XX:XX price dramatically very gone product are at single flexing you've where those So, other a like a going of future. dramatically our for it's way up brands the at did cost. certain forward. Eatin’ are we're of where projects. able that the such actually the we lower a

the we'll to still just the range productivity lose million it generating we're we any a time of we in that productivity the want the we on continuing given that XX I we today, and in it's a mentioned as and supply and robust we challenges very the resources be productivity I amount you spending magnitude to projects expect disruption momentum materializing are see because to and XX As million are so So, have and XX:XX remarks, people that prepared and pipeline but don't adding many fair good of have, the ideas are inflation I costs, work. in P&L a fighting various of have result. don't

Eric Larson

you. All XX:XX Thank right.


Vendetti from go question line Please Maxim The the comes XX:XX Anthony next Thank of you. Group. with ahead.

Anthony Vendetti

XX:XX Thanks.

questions. two Just

is And successful that ingredients, war but and you're you you increases not it it's if and was – Ukraine? growth? mentioned increased obviously, just a there's is the year-over-year in you accounted do costs increases, material packaging continue all increased the been on, freight would whether labor, volume looks much contribute where you've down how most the because to may particular this of the revenue cost, of then, raw have since quick follow-up obviously the price been line, first costs going throughout the for like on top So, quarter, been in can, and taking price to

Mark Schiller

XX:XX Yes.

volume in question, was it volume America, in but the international. up on North was down So

our growth and America. taking up the of we're at our I in double-digit our good shipping softness XX:XX product, and about strength is talked mid-single-digits our prepared top the our business, are unit in was the volume our not gaining in about gaining and we're the units where international necessarily really we weak that pricing. but not time environment mentioned, categories remarks, and was in it competitors the Given we either. definitely an line And households feel down consumer, So, how brands the fact when a that aren't North

mean really be supply planting calendar packaging what all they I because that we just by much it are is has of of material, the the So, Now, just to good cities On everything. through is tell anything, have way not would regard we raw a with doesn't impacted have that tale the two to the Ukraine contract XX:XX extend pretty question. oils mean out of shortage there. Indonesia And war the I that what oils to for is, what the going a because contracts earlier you supply, of there's up that at it derivatives the and oil, mentioned that's relative right. the of have XX:XX news end see has obviously, the like supplier the or harvesting have pump. particular, oils, is, The us I year, gas you but all both exponentially war. And going gone in prices because up going cost hoarding of up, the things are

alternate go piece, that and they the a honoring crops, a from big big the but at demand the big Europe, those available. not piece, to because XX:XX So, don't have manufacturing a cost, even come And it, prices have they're there is a piece supply, premium is is right them find a than is if employees, and oils lot when they more freight now. comes of Ukraine that are have just in sources supply is of they have there so, the a that the people say, I'd lot pick and people we packaging

inflation the pressure of there's a as wage result wars. well, So, also as

Anthony Vendetti

That's great. Thanks Okay, helpful. Mark. XX:XX


you. question [Operator The line of with next from ahead. Please Baumgartner XX:XX Instructions] go comes Mizuho Thank Securities. John the

John Baumgartner

XX:XX the for Good Thanks morning. question.

Mark Schiller

XX:XX Hi, John.

John Baumgartner

subject cost the like of productivity, Mark, and to revisit XX:XX the increasing importance push. there given I offsetting

call order for [ph], XXXX] just bit of regional sort will rank in [XX As straight supply the the a and you to you vulnerable parties, XX [ph] of be just asking your manufacturing, contribution? dollar potentially of lean it the to guess next million] ingredients, the I more automation, [F could on disruptions discussed terms projects what we think through contribution, contingent and about the know the for get mechanics ongoing what chain. rather think delayed to you to the may is outside phases I'm what's extent million this to than savings, is I on integration, but activities been really board, that,

John Baumgartner

Yeah, XX:XX a question. great

we're potential and are capital Sorry. is, having us areas, are because and with So, projects be the other Difficulty] capital capital on time. reformulation ago disruption to to two the materials reliant the able The that the projects subject productivity a biggest ones which I [Technical people questions to automation just mentioned, labor the few provide on

so, also versus cases of seeing in materials, are of capacity. our of in a that packaging the productivity. are where we grown bought of dependent some How adding just receipt fast there's of categories cheese pre-ground those end the own In some XX:XX we we're in that but capacity capital Roll, lot We slippage so Automation That's cheese. And timing we've some There's the of grinding case which projects design. the day, the projects at in

at on this somewhat ones will party we closely. things third be are equipment those are but Those on far so seem to watch are the those So, and rely track was that that the good, manufacturers. risk, so


XX:XX Thank of from The line the Morningstar. comes question you. Scheuneman next ahead. Please with Rebecca go

Rebecca Scheuneman

you. Great, thank XX:XX

[problems] in So, on just shed in of Europe. know you could X% my percent, wondering if I a first the the question light fall is, was little volumes soft the volumes, have bit would Can you discretionary than resilient. this down over there would [ph] expected? you I the would in explain why more with think consumer very is concerns that I this be the that

Mark Schiller

what so it the forward, own war and just part the around Russia people's Well, driven Ukraine of XX:XX certainly their implications the going finances of be by right. is angst war and to are going

states we to And overlap if an overlap left states easier Europe are and have has and Russia at a is, kids was things. you included, weren't, this that in had and some that on volume coming, some supply were there home, is you So They’ve was anxious it. that's some at of lockdown But threatened and thing complete has year, XX:XX also some Poland issue look what's lunch we lockdown the purchases the affecting which the year look locked unlike of certain about the if they're to relevant Finland, red complete States, now back go go ago, was United chart, that, that result the was we seeing the down trading cut as earnings and chart there's off a completely of is with provided forward. people that that because other last blue kind down a going again, that work here much which a gets and elevated very so we're very occasion back and overlap, where as and period open, shows school. certainly, to people the

will alone, overlap get at of So, and the it better think I perspective the that an from expect have I end do to eat. just people day,

going at more to perpetual over eating home I time have more can't at you time. an and is less people restaurants so, a unless beneficiary grocery of XX:XX consumer don't in everybody likely of be eat declines not home, to sales home of think are are And period think angst. extended I within unit out over

a reaction some of I but it over short-term is and of the time. overlap, do will better get think I So, the just magnitude to there it disruption the expect

Rebecca Scheuneman

Capital. Please from the Thank comes line question Mushkin next with of The Scott ahead. XX:XX RX you. go

Scott Mushkin

XX:XX Hey, my questions. Thanks guys. for taking

it, missed So, is do said of your you you on shelf wanted inflation this I I I to, and reflected the price, already guess how much but already think? maybe

Mark Schiller

Yeah. XX:XX

are pricing elasticities where so pricing. XX:XX It more that a totally cover it inflation Certainly, war, we that as the hence of lags we what So, will we significant still for all there as to the just cost in may of increases the not that Not and inflation not was in brands the we before which pricing We've we some So, because the were war January we've did in reflected out to negative into took, before need QX started. third the with in was does that pricing see QX erosion of pricing. but we there's next impact was in quarter. saw first third and second erosion. out resilient read selling built QX, sufficient come the December, the pricing the we so round just Ukraine be the that it's additional is our took the why in want we because where And just and understand quarter pricing to impact margin guided coming again, to than continuing XX:XX of pricing brands quarter we QX. in inflation, the So, lag. fully have more coming. the we from of but took some

Scott Mushkin

Now XX:XX make understand. good. to want just I so I – is that's sure

buying, increase or here big of drip all went some make still sure understand. then [indiscernible] the going another kind through in at and – we're shelf? in is to quarter I of if and your like is, [ex-Ukraine] want quarter know So, is inflation price I'm through to I all of the second products the the have second reflected you of now it just to have in place the we the bought [ph] whatever that I one U.S., is

Mark Schiller

XX:XX Yes.

basis, seen XX:XX ago we've on before additional forward. inflationary be in pricing going have on a these we are but the second reflected end in the remember cost obviously we likely earnings year as we contracted the our the third for through also, today, that of announcement be and year quarter an taken have year contracts of will was to you they ends fiscal June in that known all have are fiscal cost that annual So, to some all roll-off, the are QX increases costs basis. reflects that the versus And materialize. year what a for contracts So, quarter,

and pass to that very make it sure do inflation going in disciplined again that to on So, is a we and need way. continue we

Scott Mushkin

if quite of one what already, increases maybe far? XX:XX seen versus bit we've taken missed commodities, you I apologize on obviously all the price is and coming it, war a one [Technical And going said final this which I because off thus then have and they Ukraine Difficulty] too what's just

Mark Schiller

your XX:XX I'm you sorry, part out. more cut of missed question, I time. Say one

Scott Mushkin

Sorry. XX:XX

size but So, commodities basically versus we've on the increases future said missed given if what's it you I going price have in if I of the already you seen, labor with and already, what must apologize, the that did.

Mark Schiller

I didn’t. No, XX:XX

So, in the first X%, was took we range. X% increase

the was probably of in X% will somewhere middle This we in two. one be range. second The took the those

Scott Mushkin

guys. right, All XX:XX Perfect.


Thank of Jon Please XX:XX The question Andersen from you. go next ahead. the comes William line with Blair.

Jon Andersen

XX:XX question see. let's but Good morning Thanks. after up the struggling of all come everybody. with to those, here I'm

and a it kind into guess co-man could situation? I that so of in – is be that surprised you the of about maybe is, unique I’ll what Really business be visibility shift over customers, customer your this in or just business have one you Thanks basis, sort a ask with that helpful Europe, and about is would basis? a much. regular the to annual you had of since understand, turns unlikely an likely in of much of co-man question kind ask a it how Let's you kind repatriating Europe with much do how on on

Mark Schiller

XX:XX Yes.

those number the three Europe, plant-based contracts. annual as companies, are as both supplier we of co-manufacturers have all beverages continental branded relationships in private So, the for label of well

category could happen in in decided to we It to it was of so, the And four one last volume plenty doesn't three of the has of in by decided the the XX:XX guess and any somewhat out so, volume, to at was supply, shock but it speak it, but were growth has Who's of intended don't to of there's the end we and and calendar had. were that the or at repatriate continued the the now. That in it contracts players category expire of expiring at direction me immediate you year demand So, are most the Most repatriate as who large over timing is. other the given we one and some the a length, were there have be surprised years, that we volume? multi-year. does term, XX our our biggest from least potential. health the giving them we expire months of outstripped customer, have to year they all

have And have up recaptured. the picking and so, mentioned. expect recaptured I I end year, half all will volume the by already the we here by of QX. We'll calendar we're as of And some there volume the end would it XX:XX of the of

is business. a label private So, look, co-man and bid

plant-based cost years, low really We XX at it. supplier. good actually been are beverages We've a and we're making for

bit possible here. was unique we and ourselves. this it very a any the XX:XX of on So, And circumstance for not still that worried Is size customer disruptions. I'm are so, about of costs be long-term a good ones, can competitive overly make short-term given but there the margins maybe,


reached gentlemen, you. closing And like remarks. the Thank to XX:XX have session. and Mark we would to for question-and-answer end Ladies of turn back the I Schiller call

Mark Schiller

with for forward. America the excited everybody growth that believe do and Obviously, day the we’ll thank continued we today. in we just go will and proud some I that we're saw the in to as XX:XX extremely improve I'd we're answer questions. time your QX be pressures of we reiterate, throughout available North that seeing

intact. is thesis our So,

Our team is strong.

good, you. Our thank optimistic we're and future. very execution about the is that, I With


Thank This today's conference XX:XX call. you. concludes

your disconnect time. Thank may line participation. You for your you this at