Earnings call transcript Q3 2023

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Operator

Good day, and welcome to the Post Holdings Quarter Three 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Daniel O'Rourke, Investor Relations. ahead. go Please

Daniel O'Rourke

Matt thank third and this joining today CEO; us by and Good fiscal you XXXX Post's and and President quarter Vitale, joined our earnings for CFO Rob Treasurer. morning our for Mainer, call. morning I'm

Matt on prepared remarks, on will section and SEC both your the we'll and these supports of with release website. and SEC's Filings available press investors the The that begin is our remarks and afterwards, answer Rob questions. is also website posted the

this a an As postholdings.com. our being audio replay call reminder, is website recorded, will on and be available at

Before investors management statements. we risks as I like the this differ could as to be these and forward-looking contain that of call, to remind and should continue, actual obligation call update These current results no will this are subject from forward-looking would statements which materially of uncertainties by these are statements. date to considered statements, the undertakes that you carefully

finally, discuss And certain this non-GAAP measures. will call

a and to see issued of release nearest website. press our GAAP measure, yesterday please For non-GAAP on the these our posted measures reconciliation

With will Rob. that, to turn the call I over

Rob Vitale

Pet between are the we challenging our we trajectory business a adding out. and for this and foodservice We and to be about joining a realized to think usual prescriptive you you, more morning. fiscal quarter, thank strong model. as we really morning, it us that how for relates terrific finish a than I'm one going year Thank had expect to Daniel our This all making We performance, business XXXX. a bit outsized

our with Pet start let's acquisition. So,

exceeding margins realization You can that Food Pet margin infer expectations. is reported PCB's from

our has contribution well underwriting case. fact, In exceeded

reasons. three are There

our and to First, behaviors enabled and levels factories changes us in rebuild customer inventories. factory have leadership service improve within

be are to assumptions G&A our Second, conservative. proving

last, to have in we brand rehabilitation. yet not invest And begun

and specific contribution going once meaningfully While increased in to we fair integration past short-term its full synergy for give the have say we and our move guidance, expectations is not more it are realization. to so

said margins, to this evaluating investment. Recall our increase We approach will to prove acquisition. we if can three-tiered be a good it

is and expected hit margin already Our starting the than P&L. opportunity to greater

The second rehabilitation. of to will success, That upside Tier was some and the revitalize margin to we was start reinvest brand these seek XXXX, X. In brands. tier investment

And finally, we inorganic the as to proud inorganic Related growth, of are long-term this I'm building very platform efforts. integration this a over team's growth. for

synergies. Private now Going back developed all a TreeHouse the we and sustainable Pet, to way label, Pan real have brands, MOM delivering at Peter proficiency

Ignoring to its foodservice. other The and quarter outsized to grew baseline X% continues Volumes continues results was terrific The performance, contributor is business value-added higher extremely products. mix towards this performance. the performing shift outsized well.

and volume be estimate pre-COVID. $XX prior shake which favorable per In XXXX. will manufacturing, come to growth the quarter to EBITDA sustainably million level this mix higher in of We quarter than of produced of the tandem, first the fiscal a impact approximately protein online ready-to-drink

raised will billion. to our On guidance top its $X.XX outsized on baseline, we Last strong the provide drivers trajectory Matt some normalization. adjusted we billion performance. of a delivered and $X.X night, to detail EBITDA to

the EBITDA to you expect helping our while year growth the in as preliminary more to Back my XXXX planning our baseline. FY stages, comment model with by show about being guidance current is prescriptive, we modest next

acquisition, XXXX to we The we is step-up pet. improve as in the Further, synergies to incremental investments well supply limited chains to be FY in continue not and Pet realize expect from marketing. marketing make positioned for

spend marketing including up US stepping the and cereal and are across categories, UK Bob brand. We Evans

more we Those months anticipating food results in significant are are seven want as Last, clear as growth service. offsets. including the and be I year, to Pet that of possible next normalizing

appropriately to comments preliminary outlook the in ability the and year your XXXX models. current and these M&A Hopefully, for XXXX factor around recent you performance give

questions stack Turning of cereal. about resiliency in have the years X volume face been pricing. lately to There of ready-to-eat

pounds In were category down fact, X.X%.

We March reduction and to X% non-repeating result, SNAP this are Omicron shift SNAP of to attribute to think a decline. mean in lapping the a most consumption category significantly, Omicron, and as benefits. breakfast X% to reverting as we a away-from-home tend to the pre-COVID and

are to shift also We seeing products. a value-priced notable

volume the but this half shipment quarter temporary shipments the Peter lapping market Our was brand. a volumes withdrawal declined decline Pan X.X%, of of result of the Jif

mixed we have in Retail enabled and basis, have Refrigerated and Supply markedly Cereal a over product continuity a consumption XX.X%, point had margin share a quarter. two-year has to grew last half On dollar grown basis. Peter expansion. Pan chains improved a sequential share and on year

from side, reengaged we growth as marketing. negative we see pressure and this expect by advertising with both the in impacting years. see are private We its our brand we continue incremental first fully volumes, distribution, to two label and resume to expand supported television households responding On drive

consumers in environment food, ahead The for the inflation, is and UK in brand is and macro managed, the US. are facing tough well we energy long-term. the investing a well Weetabix housing business of with being

fact, company-wide entered In increasing marketing Weetabix quarter, against the XXXX we and in stronger strong backdrop are shape. of

other. to In M&A, against allocation, capital continue terms deleveraging and of share we weigh each buybacks

Smucker, shares we approximately purchasers to since that trajectory. acquisition, have XX% of aggressive our downward issued while We on our of of announcement the open amount been Pet have leverage a all ratio J.M. we keeping repurchased lately market the

confident in we quite building remain continue portfolio see recent to our we moves, momentum in business. and our closing, In

With will turn to the call that, I Matt. over

Matt Mainer

Thanks Rob everyone. and good morning

increased million. Food adjusted newly acquired EBITDA consolidated Pet billion $XXX Net quarter the Third net business. sales $X.X by were sales XX%, driven and was

driven increased actions X%, by acquisition, net in sales this each pricing Excluding segment.

out businesses continue elasticities in our during consumers . to volume show a preference shifted enough Volumes our as breakfast pricing eating and private volumes for increased to offerings, up saw ticked products. to although as Foodservice label offset retail our hours. in not branded decreased declines

to continue fill customer Our rates order improve. supply chain performance and

moderated especially costs. freight opportunity have the still pockets across Inflation we quarter, business However, in in both. in of the

starting and segments Brands. Consumer our to Post with Turning

of the volumes increased acquisition, the Food Excluding benefit net and X%. X% Pet sales decreased

We driven private excluding contribution Average we strong pricing, XX% EBITDA peanut food, from benefited and adjusted growth increased as the label in the business. newly Pet versus net by saw volume actions. Segment offset cereal, pet increased year in prior was pricing cereal. of declines Food butter branded which by acquired XX%

The over translation sales towards foreign offset unfavorable British basis price comparable in X% nearly list increased by approximately private us some Weetabix. XX headwind Moving sales to Net was nominal to was year-over-year. pound quarter-over-quarter was attributable biscuit. points. The net partially currency mix causing increase significant and increases of label

as and not was enough products, branded declines offset products, label private X% growth Volumes which extruded were inflation-related UFIT, biscuit by to decreased in elasticities. in driven

and Segment XX% warehousing lower outpaced adjusted actions. year and higher costs volumes as decreased EBITDA input our pricing versus prior

expect continue We challenging macro to keep margins environment the in UK a to into XXXX. compressed our

X% growth model growth and continued volume to and the sales revenue grew premium. in in AI X%, outpace net price our timing volume respectively. effect reflects pass-through as our commodity temporary pricing of Revenue Foodservice our

in temporary benefits were end magnified the marketing our combination of pricing and a of June. the inventory quarter The of by and dynamics low second May of our level the prices collapse normally at

would of historically direction. give And the post-Easter the such pricing. demand event the have AI similar national a to from events likely It a to resulted pullback, avian as reminder, take recovery collapse opposite influenza. rise market layer continued another with price incremental population following This coupled dynamic,

at tapered pricing is the AI tail which in and QX. of winding a Our end down, QX off nominal is

prices In quickly early egg addition, market recovered July. by

rate normalized is So run in go-forward a here that Rob today, basis the as line running we sit with business discussed. on

sales was Refrigerated Retail the net and XX%, and sales decline was by in driven net lower volumes decreased partially by X% average offset pricing and in volumes respectively. increased net portfolio. The

manufacturing label. shift adjusted benefiting a EBITDA offset price from Reinstating increased year advertising benefits. and XX% favorable elasticities across was performance network. promotion salad versus our actions significant Side [ph] private cost dish offset XX%, Segment the an to volumes to decreased pricing and spending reflecting costs prior inflation, to these and customer primarily improved

which by forma Turning and times, pro prior in our of improved continuing we up down the net capital. quarter, for working leverage at times from decrease significantly April profitability quarter In million the which sequentially of the is a generated Pet third ended to from $XXX versus closing the flow. driven transaction. year We X.X cash and operations, net is X.X

allocation. new protein capital the were progress approximately co-manufacturing next which to year. shake Capital over expenditures million Moving $XX slightly on continued by delayed in is driven QX facility, of QX, into though

an retired $XX In addition, price XX%. our we approximately debt average per discount million repurchased our million and of of share of at shares of $XX an X.X at average

July, $XX an In spent shares, outstanding the to XXX,XXX we our shares month reducing repurchase to million of approximately million. $XX common additional

outstanding shares we transaction, to of the by of a of able since our leverage and X% closing Pet summarize, buy to still So turn. have three-tenths back been reduced the

back joining call Thanks I to the us that, With over the will operator. today. turn for

Operator

we Instructions] question-and-answer will a Thank session. you. conduct At this [Operator time,

Our Andrew first question Lazar comes with Barclays. from

Your line is open.

Andrew Lazar

Rob morning How are you Matt. Good doing? and

Rob Vitale

are Good morning. How you?

Andrew Lazar

Thanks. start, Rob, perspective Great. of right to maybe get industry just key dynamics hoping in at was play I the on to your some now. Maybe the

side, companies are consumers of number their consumer stretching the a On mentioned budgets. have

to On the in of other hand, of or switching the see see -- trade to yet way companies anyway down out much other label to categories. private it yet appears they've

side, inventory supply normal. of about get retail customer back some the chain sort On destocking at we've to heard

to of promotions, promotions mixed but sentiment competitors say some to promotions levels. are year-over-year saying branded still are levels? We've return have returned regarding there's the but heard that largely below promotional, of are Others getting XXXX XXXX up level sort more

sense you're play expecting this six the you're just -- months? to your a I'm sort next and get in to maybe seeing of what the of what how out trying over environment maybe XX regard to

Rob Vitale

trap with falling You anyway. always me in into the get but I'm Andrew, questions, not these trouble

So, now. here's consumer the right think the about we state how of

And credit same an you significant $X.X pretty have still, increasingly consumer debt. the call bifurcated excess have have it, we pre-COVID. card increases to in trillion at deposits where You compared of time,

between down fairly seemingly at call having going level, a if attractive in consumer top comment. that you a relationship rate an the you're the a while from shift spending. amortizes, deposit see necessarily that as excess inflation two All attractive bottom and perspective, third macro to of So, one-third, not unemployment stay the

include that -- not you payments going to student the But XX get not particularly XX-month inflation unemployment weakening is if leads And probably resumption higher. loan to deposits challenging. get horizon is going to spending, of get more consumer a of going to better, a to are

suggests weaker, stronger and we already to see, for value-oriented well to for the that and net decade plus. last to normal going position to consumer things pressure more the starting the activity likely bodes that you're expect we're more offset shift managed products, which bit certainly So, pricing, continue. on see a That not think we is promotional then and that, be to by some we've

Andrew Lazar

I then a Food EBITDA I acquisition of of guess, a with initially annual And that. you are -- annual contribution at think, in million. and you $X.X the point Are Got the of for looking it. about for Thanks it's sales still, $XX early obviously, where you about were Pet integration. billion

Or But pretty that? to numbers see where seems you're either sort given you're how break while where out a update point are do way of now, to it you a starting favorable like early, quickly? ready at things in playing pretty those

Rob Vitale

Well, combined we've grocery. with the business got

So, peanut the butter Brands we've cereal pet got segment. Consumer and Post under

So, with and to in see as to you're able the then you, segment. they XXXX for start what we're changes be quarter of to share another to going going the with plan course,

by part not larger guidance of the driven lion's are the We're to think updated of segment, quarters. acquisition. over easy because will . couple specific next of changes pet progression to it I Pet in share but be Obviously, a relatively is the track segment the going on the give the

may you, numbers you the been with? you it you -- restate Could but numbers I the have annual just the the effect misheard you think actual and did what that I may throw way up? XXXX Because started said not have

Andrew Lazar

the I and billion I think, EBITDA $X.X $XX sales Yes, it of in mean, was then million.

Rob Vitale

was No, no, $XXX million. EBITDA

Andrew Lazar

$XXX piece basis. for but million a year, from -- partial Yes. That full, yes, just was annualized on . the

Rob Vitale

Correct.

Andrew Lazar

more just in at would least as I the it's then slowly lap picture then pricing some maybe than guess early. thing so a back industry be, and are coming maybe is to think -- anticipated. some the far, would And bit starting The volume have little I companies last

and mechanics whatnot. lap Just you pricing of the looking at how

much. coming where would pricing? In are point are little in business, areas see have some expected trend maybe a as you sort some things what of slower Thanks we've as so Or you bit you your lap yet can you others? of -- where a guess, developing a I those in consumer seen volumes the at mechanically from are either like consumer back

Rob Vitale

our think very much volume with pricing is expectations. No, our back coming consistent our I -- well, dynamic

prepared SNAP where I in think of in think a bit in called remarks, my caused consumption. the -- blip the see I -- a that I can that you out volume

So, Pet margins real our on expectations. we journey are seeing of only been any start that based surprise own strength this surprises quarter with the in Again, as not the has we

Andrew Lazar

to see. so good Thanks Great, much.

Rob Vitale

you, Andrew. Thank

Operator

Palmer next question David Evercore Our comes ISI. from with

open. Your line is

David Palmer

Good morning. Thanks.

Rob Vitale

David. Hey

David Palmer

could -- base so Pet plus is if case $XX to sustaining guide be the there's into it from are on that specifically $XX like might more fiscal more that as you of million giving XXXX Is sounds million It on or confidence Pet something per in food above service get co-packing. you that giving today. really quarter you digging all that's confidence you

Thank there? thoughts any So, you.

Rob Vitale

And level just on Had and me we you we performance about twin foodservice, events some the XXXX. not had just a yet. certainly of and cadence. comfort giving having Pet quite contributing completely be That's normal is year-to-date our a transparent sense wouldn't not XXXX of in adding component an talking let be of Pet outsized that.

is complexity would do that relates period little further all to with our thinking give challenges do sometimes we to a create respectful the of face normally you and it as time So, are be try a bit of we what so. a we the you more trying than out to bit of

there we heavily about is feel in of at be invested We good advertising. components. a our as business. expense feel performance. business that in of with refrigerated year We We've very the Weetabix to do think engage But good Weetabix's position Pet, going about but current our terms strengthening we the most in of

well going we what So, XXXX. But positioned be are we It would controlling. control, to we can into strengthening nicely nice macro there. see are some

dynamics attractive Our even of outside pricing the shape. very AI foodservice in business, is

heavy long ahead made the precook in years which investment about capacity couple talked a we a We've precook investment capacity, questionable. right and COVID, of in for looked we made of

a value-added off Now higher see mix products. paying is it in we as spades towards

And to increase products a Xx to recall fixed in the value-added contribution low overhead. that the in Xx highest to from is mix

each yet there's business well. for the is business, performing So In room improvement.

in Michael We have some underperformance Foods. manufacturing

network We have we've challenges PCB. can articulated do within Bob Evans always that and within the and Weetabix already we in improvement our cost

and year, the build to despite we very the So improve feel continue trajectory. our confident of that strength we can upon it

David Palmer

That's very all Thanks. helpful.

Just a one. quick

wondering with investors probably by about most thanks. assumptions, assumptions sort company nervous just And XXXX? I brands Retail, of -- any particularly you food about are fiscal days, think volume and these and what consumer for are Refrigerated I'm volume just thinking

Rob Vitale

to assumption Well, our through a looking you X% gave we decline. for category that of not XXXX. we're we're at X% process planning the Again,

into other call. give category So thinking to haven't that's not we of a pretty because we're ready level high gotten potatoes you about and We're where assumption. the yet that categories details

a controllable you're marketed. that's we be comment that's the But and I more area ready interested haven't large probably of because like X%. expect a on where in and category But than a more category eat it's to to think we to think cereal, down our would positive X% that most I side

David Palmer

you. Thank

Rob Vitale

Thank you.

Operator

next Michael Lavery Piper Our from question Sandler. comes with

line Your is open.

Michael Lavery

Good you. Thank morning.

Rob Vitale

Michael. Hey

Michael Lavery

Just wanted to to come Foodservice. back

think expect case piece continue us just million about forward? what your lift? help continue shift mix You if the things driven mentioned the that add touched doesn't? rate. the assumption really in mix And than how run much quarter. Is and But going that some Can that that sustained, lift it base is that to and on benefit. a have is you the different the to Could the you of $XX mix more maybe

Rob Vitale

board a fiscal best of go million investor on in can the for Well, to I quarter day million it fact by deck, normalize to our all we do doesn't the refer to $XX think you new is adjusted in come which I shakes one $XX baseline, attempt per thing the that, back the potential ready-to-drink year. that add

then that available. it's readily to that's And and our X% that a X% on segment. and we've model in growth call And a out published, website rate five-year we

you the to that's think growth best way impact value-added higher product. mix volume I think about and of both the So, for to

Michael Lavery

in is of right at. guess, think some that mix that I to Is trying baked really so about already, to what And get the improvement way I'm is it?

Rob Vitale

volume the below is by because the mix. that well is growth growth but It leveraged is impact of volume the

Michael Lavery

was you. was how much from in you position Got has would the whether that. changed Thanks any Smucker color give or to have it for And not on And if when where closed? are just on share repurchases, that? the able involved deal or their

Rob Vitale

are not. We

Michael Lavery

much. so Thanks Okay.

Rob Vitale

you. Thank

Operator

Securities. question next Truist comes from Our with Bill Chappell

Your line is open.

Bill Chappell

Thanks. Good morning.

Rob Vitale

Hey Bill.

Bill Chappell

to going I'm understand you trying just to out this you're plays -- levels? to X% cereal, struggle now of mean get to volume I But seeing I the next all that pricing back guess XXXX over promotional earlier even levels that the couple read-to-eat I see to just to years? back will or think movie more X%. grab is competitive, Rob, growth volume how gets worry of share the the players

up out kind how I'm held a just months? this Do volume is different? well you trying understand there, figure in you've whole the XX Just time market? to of but more from you the towards out, trying standpoint, does feel standpoint see than very pricing to a next the And to that playing XX market like

Rob Vitale

responding is forward? in at perhaps We behave. how us. Yes, to be productive and look sure behaving scenarios reality for we know. this that make try and going We And we're central it's the about I the don't the to we most you a mean market think to and tend that different in question good way is, manner category disciplined

be. time lot of may But we those to what trying a market anticipate scenarios don't spend

a with necessarily a in landscape competitive competitor, got new organized but coming new fashion. a change a the competitor in not You've

years That's ways. We've many its going over category XXX, some different whatever know. it way uncertainty. been to introduce The to XXX It seems is is, through work I don't up. old. time

But could of there certainly. activity, promotional be greater periods

of things I same a mean lately. me have mean hear tend the all I these You lump bucket. pattern in lot say and to think this would reversion a towards reversion,

Bill Chappell

candor. I And always, your Got it. appreciate as

not terms how -- think to In the but across marketing said board the I that though step-up of plan on brands, and had you just help? on Pet the does

of is category. cereal, our going the into terms you higher to brands ready-to-eat about be -- there brands kind it have of is more need support and the level across to again talking There's need have of support? I'm we been lot that popped noise that necessary in When Or a just a to do with there that? board, out of

Rob Vitale

investments No, it the estimates our are from and situation excess of company-wide a lean in that when of some other in that tend felt opportunities into sometimes the in make a was direction. we'll longer-term we and luxury well more have to frankly internal opposite, perspective we we like this a to pull

and given lack have. with aggressively the might So, faces Weetabix and Bob challenges to bit more we some otherwise the the we a of some faced has of wanted the of advertising, challenges of Evans than business, strength in lean

a but of is So, necessity the performance bit or more like of sometimes luxury, a it luxury I felt portfolio. the think, given blurry,

Bill Chappell

lot Great. the for color. Thanks a

Rob Vitale

you. Thank

Operator

question next Jefferies. from Our Dickerson Robert comes with

Your is open. line

Robert Dickerson

compressed the Weetabix Great. profitability. quarter. Clearly, touch much. little Thanks just it to a in I on want so How's going?

of the into said head year. constrained stay in you as next a probably remarks, I think kind you bit

So, could guess, core margins, of kind the on the I comment view the maybe you profitability kind like prior return then And Thanks. to of kind just, of region. compression? of do how that within what just you are drivers

Rob Vitale

shift towards towards contribution biggest margin single label. the in the dilution a the private Well, is

we it's provider We label, but are private parity. dominant -- not the margin of

losing within we're So biscuit some profit. but volume keeping category the

challenge, I the the way, which bit doing, order a profit, restore margin a back need opposite heavily challenge are marketing what is which to of think anything we lean do time we of into of going in of to pulling that the worse. we are appearance a instead makes in

the we And what we macro up it eventual do brand there, all trying to will when is well in the we it, for reengage, the what are ready UK. consumer set be being brand anticipate the the But an are having along. environment to normalization is supported of

we level and think the weathered needs keep I So, be our we where it We prepare to investment normalization. for storm.

Robert Dickerson

to a and Refrigerated the say, you Thank touch I let's And points few discussed Okay, more the those be your business. on parts to the bit you. yet. we volume just perfect. then, categories break other guess, relative seem haven't categories out secondly, of Retail, release, trying of a pressure, to

kind volume pressure from is frozen Do of you issue, at be shift just the we've seen more kind of maybe Is there let's might just bit more driving more pressured why anything of private kind And versus of from price outside gauge center trying than the stared of areas pressure outsized in my a I'm there steering some other the store. perspective, kind away of higher of least frozen, volume think a items? that to bit is say, just elsewhere? think you consumers point label? to

Rob Vitale

over Well, if franchise. think At mostly with our the two which dish supply everyone last of -- two took last the it Along is else, improvement chain segment the the had two the chain price years. ago most let's had side challenging is is the you most considerable we I in the segment business, on and core this supply the years that focus time, years. same has these that

to incremental XX So, in months of our support so. or price months the the poorly chain. Well, escalation, advertising because within mean, I lack a product say, had were to which sense last advertising we supply six, the support in made I chains, last supply given our XX position performing should no inability we prior

not position brand. for a growing that's a great So,

that now area of in self-inflicted marketing the us. I problems that behind were support normalizing a supply of supply chain And combination doing is and We've pricing macro fixed the fixed or in lack problems are competitors now -- are the that have we priced our optimistic some chain. now so. feel as the process We've so of of

bit a improved be the take of the will It enter impact impact the But the time optimistic chain reasons parity better see to and and XXXX as the prove pricing little those that of supply are about out of we segment. to the the marketing,

it's major in we've think about where over the been two the I less shift last years. about trajectory consumer a is it than

Robert Dickerson

All right. Super. ask, of like Makes completed guess overall to fully lastly And of always general just sense. just other I just Pet you the given but feel then kind appetite market realized the for quickly, I acquisition, given I have -- environment? of and kind opportunistic transactions kind

Rob Vitale

we're Well, very interested.

things We looking at are now.

Matt X.X%. You ratio leverage is probably heard say, our

generate So, we're and shares nothing to in to at opportunities a very or back just to position look if de-lever. attractive else continue external buy cash

think think this being being tend senior X% for and private I environment private in equity before. -- shared the ago spreads because look a and we're I've that debt. compete X.X% less with you is top with on year the SOFR in us favorable favors if We equity than I position of at to a

has So, a with of could so demonstrably capital cost we I have that into our I and Pet. think think play favor done advantage

of competition for able as an the as like we part was paucity think in we I that. the were be to Pet were asset successful of reason

active always acting. and least and at hopefully, So we will be looking selective in

Robert Dickerson

on. pass I'll Perfect. Thank you. it

Operator

Jason from comes Our Sachs. Goldman next with question English

open. line Your is

Jason English

folks. good Hey, morning Thanks.

Rob Vitale

Jason. Hey

Jason English

to want So, obviously, the with just over-earning some I come quarter, to congrats it. And back on business. food the in service

this a by we through the level. that upside, earnings went overshot said volatility, we downside. undershooting of to more normalized Last time now you're guys followed You on bit back a of the

while What I end chicks? is think risk that undershooting depressed the younger the this? are egg of happen? productive that flock prices for you. different it case of back caused conditions replace as is not Thank Why when we on with the a to remain much why here? the than more And the

Rob Vitale

and last closer time went balance and grain-based the based, this, we are time. Yes, more balance about was the supply this issue through to we between the

time. persisting of don't an same So the extended we period see for risk

but the always we look will of some think very risk risk, risk a We is into as amount have XXXX. manageable we

and meaningful priced shift business a other segments higher value-added to our mix. our of between XXXX is The difference XXXX higher XXXX, and much product in

Jason English

it. Got

side to dishes Refrigerated Retail And Okay. [Indiscernible]. back

this imagine But quarters I least of I label in? Is think is that's like at more this to retailer you major two who's go change pushed row more I one Is in quarters? my at there's guess it a second the pressure. if cycle just a private two quarter question. this.

there and incursion the something there this be got growth? it one Or supplying one have duration, on back another out side and on wider on this follow through on label? likely there's we've a is follow. back Could chain Or another there's supply to where and to that's board the quarter supplier new to cycle is this private it a done and fourth side, other retailer to

Rob Vitale

in No, need additional would in order for capacity. the as it you to take legs would and expand category meaningfully,

more the to that supply be potential effective a are going our if someone advertising. add aggressive own where capacity, time for always gamble, particularly significant at but in fairly we So mean is would our there's it and in becoming more I a chains

advertising I effectively couple been is of the now. It's a question, the starting that to answer -- first weeks. of your part think

it's will some a a further Hopefully, see see turn be this certainly I changes weakness So, but start in first part lag. not surprised next rates there not to be to dime. year. to quarter we'll the of going would the some improve and in on

Jason English

a me, disclosed question side. I still On Q, is you believe Brands headwind. from the pass I'll inflation Consumer Okay. it in that your Last on. and

this be $XX or a away was from now. that so it mistaken, think could I I'm million quarter, my computer right

next. commodity year ingredient prolonged? cost that, that this that should inflationary more would turn of you're wrap we any curve there and to on The it's could suggest perspective look what is we be spot deflationary kind -- Or from that cost, Is think seeing? a reason everything go pressure as the into

Rob Vitale

a bit were you're I Jason, repeat didn't And hear somewhat asking think? hard to what you I there hear. Could little business you about.

Jason English

looking can take little outside speak Brands annoying. perspective. be I that -- you and to before apologize. I a you. is what's think at from I'm cost But Consumer cadence look is Thank don't And everyone our cost it from Is the this which just own louder, top, turns of I'll curves, the of away deflationary still eaten realistic? a profitability. it's appreciate? matter I'll try saying, are gosh, inflation a as forward? there your segment, time Yes, offsets Yes. In the we Or

Rob Vitale

Yes.

So modestly inflationary. entire is not deflationary of certainly and basket our commodities it's

trend trend anticipating. characterize disinflation I deflation and think I what are seeing would rather than a what is we're that's we

Jason English

pass I'll Okay. Thank on. it you.

Rob Vitale

you. Thank

Operator

Matt question comes with Stifel. Our from Smith next

Your line is open.

Matt Smith

morning. good Hi

Rob Vitale

Matt. Hey

Matt Smith

I on the and commentary as mix business. follow-up egg end product conventional back the wanted cycle balanced about prices AI help risk on insulate improved sourcing egg this of to the The reset.

to shell down if seeing of your I trade ask But customers gap price back wanted this to take that to from wider advantage value-added eggs conventional products to any environment? less you're in

Rob Vitale

You're right.

Matt Smith

quick. was That Okay.

Rob Vitale

your make it's difficult that you the model. switch, to back go very on because layover Once implications of

Matt Smith

here. seen structure Thank if from private of dishes cereal a follow maybe whether We've in label refrigerated mind you commentary benefit side the Okay. for outperformance. that. it's on several about tiered post categories, And comes I to value the up and could your

penetration in Do similar any low Evans of you there? advantage label factors the and see strategy Bob the of strength type pursuing private relatively brand a of the refrigerated to retailers, of differentiating

Rob Vitale

think I factors. there's differentiating number a of

start answer yes. Let the with of, me

the had opportunity and category. category dish of points interesting I price side the But maturity. cereal tiers multiple of be within the difference think the is there is one refrigerated to having always between with an

earlier excess business points, growth capacity, and a much opened capacity, category curve is mature of quite been whereas historically, product different tended price has cereal its life up dish points. tended lack which out multiple more crowded towards The on opportunities around towards the in price which side and cycle, has

the think within strike balance price I you to So, different where two want the are you life points product you you are on those in have play curve and is the dynamics. how where to the in capacity cycle,

Matt Smith

pass time Okay. I'll it Thanks. the on. morning. I appreciate this

Operator

our Q&A Thank Thank us. you. We've you reached the end joining session. of for

You may disconnect. now

Rob Vitale

you, all. Thank

Post (POST) 4 Aug 232023 Q3 Earnings call transcript