LANC - Earnings call transcript Q2 2021 | Lancaster Colony Corporation

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Operator

Good morning. My name is Michelle, and I will be your conference call facilitator for today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation Fiscal Year 2021 Second Quarter Conference Call. Conducting today's call will be Dave Ciesinski, President and CEO; and Tom Pigott, CFO. All lines have been placed on mute to prevent any background noise. completed answer remarks session. have a will speakers, and question the their there prepared be After [Operator begin the Now conference Instruction] I call. would like to

for go Dale Colony is Ganobsik, President Investor Here Vice Corporation. ahead. Relations Please of Lancaster

Dale Ganobsik

Thank quarter joining Colony's today for thank us call. Good you, XXXX for second morning, Michelle. year and you everyone, fiscal conference Lancaster

filings are Private results are subject could XXXX. safe harbor the statements discussion afternoon. morning this risks to of of available Also number may note Our with a materially obligation no these based cause this to Act of of these subsequent to that the discussion include and the Securities the audio events. update call and risks contained A subject These that Reform archived lancastercolony.com forward-looking undertakes replay will company statements to statements, which is be website, uncertainties later of company's the detailed uncertainties and Litigation provisions this and differ actual at SEC. upon the company's our in

today's At over call CEO, again, appreciate the your we Colony's the remarks, we'll morning. any Once questions. of now will comments Ciesinski. be Lancaster our President our will will provide business current overview with turn Dave the our results. strategy. financial conclusion and prepared President for and and to some participation Tom of then Dave our highlights For your begin update happy to Dave? of CFO, the an respond CEO, to then quarter. Ciesinski, I'll share Dave and the call, Pigott, outlook regarding this

Dave Ciesinski

report record to with the fiscal It's are all our entire is we imposed extending sales Lancaster we've fixed. pandemic team I'd everyone. to year second steadfast pandemic, mission sincere uncertainty to begin Despite Throughout profit. thank good here Colony business, quarter and Dale, very a as pleasure upon obstacles we you for our heartfelt morning, sacrifices gross review and to contributions and the quarter. a the for like that the by XXXX. pleased their results today Thanks, remained past you our during and the that and be

for XX, record our provide ended And sales health, in we In food in welfare $XXX play quarter sales supply that in which to to continue XX.X%, quarter, our teammates. of second, our role retail ensure grew to fiscal second our December X.X%. declined our segment consolidated a segment million. X.X% country's to First, Net net net and the the vital while grew safety chain. second sales foodservice

introduced planned rollout points last X we retail well, of over omni Schubert's Chick-fil-A spring, sales, X.X%. Olive foodservice QSR the demand dressing, benefited in regional strong. increased indicate that recent Sister In garlic XX.X%, with our chain as household segment, sauces repeat consolidated to market addition included foodservice the sales following. rate as of foodservice data program growth where drive customers over represented the Buffalo higher strength also in are Wild growth. to to perform NPD XX.X%, at-home higher success of a Per and indicates source shows sales Garden noted Alabama, sales in adding and pilot food sales sales grew trial of Branded highlights Buffalo for continued The increased Olive grew our sauces during average. introduced a the of and industry and QX Chick-fil-A QSR impact single ahead is Wing four penetration The Wing XX.X%. Mississippi Louisiana. Chick-fil-A bread with our repeat Sales in our sales data full-service consumption. are XX.X%. average. Crest Recent Florida cumulative extremely of which The a retail to segment national dressings Bakery XX.X%, net state strong with Excluding March, drove very percentage advanced pacing In a cell XX% purchases same and segment's dinner Chick-fil-A new of sauces Garden sauces refrigerated data last in licensing beyond that baking to IRI count pizza states the frozen and revenue York that of X.X% as and the very distribution expanded the IRI net Retail favorable, of are of retail the declined test contributors. the XX.X% quarter and the segment QSR remained retailers quarter we line grew dressings the data sauces, total of frozen initial Georgia, sales pandemic key sauces we from with Wild IRI, the continued Florida, our the quarter. New in velocity shows rolls that bottle trends our sales Croutons net with XX.X% very for continued

on we're to We account in related new continue the pursuing our X% a of also opportunities customers many impacts driven profit million. to sauces, $XXX.X we've gross opportunities to dressings market segments, second market some other of meal retail pursue recent the range Despite grew and by with segment. record higher enjoyed our home where of success. the including national of growth the a kit quarter spreads. was costs strength This manufacturing Separately, COVID-XX,

by we follow continue to prior government with authorities. As provided protocols health guidelines and quarters,

distribution will Pigott, our on Tom We to make all to the for turn plants I to the over call CFO, results. at Tom? his operations financial quarter necessary commentary our also continue promote second investments now and our safe of centers.

Tom Pigott

our Overall, to expectations. The COVID-XX, bottom segment costs allowing the quarter Retail the to Dave. stronger impact for exceeded the due improved the company the growth the incurred we results in revenue line Thanks, drive higher offset of performance.

increased net consolidated million. sales $XXX quarter Second X.X% to

by quarter, and the million quarter X.X%. year current in the year in increased Excluding sales $X.X prior baking omni sales net of $XXX,XXX consolidated

higher and sales this including leave $X to offsetting expenditures hard XX X% supply to agreement. as for The reduced $XXX.X attributed of were of about $X million gross driven Items partially frontline to and shift COVID-XX and manufacturing costs omni and incremental distribution basis expenses. XXXX, The about pay million, related inflation. temporary points. of related as favorability a other commodity costs and worker sick you million protective ended or equipment banking for sales costs, well $X were increased the as As segment. growth retail personal items expanded The separations, included October spending trade impact million cost COVID-XX by margins on agreement higher profit in was by XX, planned. the Consolidated recall, increased

We changes costs utilization also million. More an incurred to increased less by incremental some costs, and to expenses mix and demand. estimated efficient totaling these These distribution help specifically, included soft XX. freight overtime and COVID production meet demand related driven lines pay, of increased internal costs $X higher were

$XX.X Consolidated segment operation and operating million. reduced the continue We X.X% ensure $X.X Selling, was driven servicing growth strong quarter to offset make income profit line increased resulting project these improvement. on or top a for general our consumer quarter. $X.X the partially X.X%, facilities spending gross demand for income ascent, million for promotions or of spending to and across retail to operating our of shifts by The business. the safe the performance investments the administrative the key by higher the while driver million expenses in increased

the rate tax a We for fiscal of rate estimate XX.X% fiscal versus to XX% effective tax 'XX. of was quarter the the Our this year be the remainder in rate tax second XX%. quarter of

quarter project the $X.XX effective increased driven to we was earnings in in by and our of totaled on Second investment our million. offset the payments $X.XX. making share. to share growth project The the capital quarter interest regard by investment business, lower expenditures, The rate $X.XX underlying diluted income for increase tax additions performance property holdings. With the cash per increase $XX.X EPS per by reduced ascent are second ascent,

cost forecasting expenditures $XX the $XXX allow our at us facility. $XXX for the fast-growing investment meet For Kentucky The project and Horse approximately our this estimated between and the million expansion the million. planned million year. for approved with related expansion at expenditures is total $XXX 'XX, we're This fiscal recently Cave, to This approximately capital sauce will includes spend total for products. fiscal to million of demand dressing expansion year

business, returned to also investing we shareholders. funds addition In in our to

Our the from quarterly was dividend paid cash prior year $X.XX increase XX December a on a X% amount. share,

making finished the the Our annual XX strong balance our quarter dividend long-standing cash these Even remains increased in of sheet. million reached we're and debt-free investments payments, dividend financial December. with very we streak $XXX on as of position with years increases

business. the our solid strategies this So quarter to execution and of wrap Retail segment featured in our across up commentary, growth my strong

adjust outbreak of to Dave will investing Thank the closing potential continue business. for the of you. to while remarks. We in over the impacts monitor the turn now and COVID-XX his I longer-term it back to

Dave Ciesinski

Thanks, Tom.

Chick-fil-A begin remain week from and In the we products. three and and very to the our licensing frozen growth, regarding core. next start accelerate As our we set chain from margins, more benefit to program execute our combined M&A future simple Oklahoma our with to XX third of to will Lancaster to core our month. to our Mid-Atlantic the sales business. of will strategy of our simplify leverage fiscal ahead, quarter, to continued team, pillars retailers to continue sauces reduce growth strength distribution for bread this Shipments complementary support identify in operating look our growth net from expect of our our to sheet our the to grow balance plan bullish to cost We later and in Texas Colony supply and business and states grow

by national and the manufacturing COVID-XX impacts for to expenses Chick-fil-A of expect distribution commodities headwind while third become will fiscal of increasingly We quarter The cost remain reach projected of a in year. our sauces inflationary. fiscal our the are to trade end

realization expect and to costs. efforts our ongoing offset savings cost program higher net these help price new We

month, one the the Zero, investment XXXX. Wave ascent executed demand early dressing corporate-wide a strategy, address master creativity chain as of mentioned, ERP in remain planned. Specific team, Tom our our initiative, we project ascent, on increasing and production and the Wave perseverance significant for to as of a factory capacity making track well launch our included supply as is SAP, sauce Our for to Thanks limited are we the launch to products. project as larger X we successfully Earlier fiscal to in commence data. this progressing which

to thanks mission XXXX. again Here, In like supply fiscal a perseverance over closing, to first our the chain again, with concludes of month of fulfill creativity year all all quarter unprecedented remarks I'll target for in to the the team this last for we'd despite done you thank have to frame once Lancaster that Colony for pandemic. and place continue have. by the our any to This the Michelle, would completion groundbreaking questions time project to turn imposed took of it important be they I and happy team, prepared may entire you. and the do challenges answer today,

Operator

question Instructions] Bell comes from [Operator Edge. Your first from Consumer Ryan

Your line is open.

Ryan Bell

now to and returning sales of And that as to more out talk a retail of seen the growth between been some think story you there's act robust in for coming will about look balancing they've The offset assumptions consumption? retail Would you're has it's in growth? little growth wins foodservice an bit to to your trends how returning like the the growth foodservice. less about what the when seeing at-home foodservice do like providing you

Dave Ciesinski

I and start I'd in category retail broader terms maybe foodservice. a of start we're trends just context for little in I'll in with seeing Sure. with may, both our that retail Well, first. business Maybe the if the

for everybody If and at our out edible probably the let's else's the up be averaging all all of, months, you they're last this the -- universe in X during handful there, look being would categories say, outlets XX.X%. about business

Colony, look If business, is our averaging up this you XX%. all of we're Lancaster for at about our outlets,

to going the consumption I the would sort in of effects coronavirus last you to of this pull-through very What with to is, business. X X weeks, is about begin share the we're lap year. of first the from So

if look more is where Now seeing like like Foodservice or at pivot totals in more and Crest the are entire what we this that for down largest NPD we're in running restaurant look we of in XX%, roughly this casual are that transactions more same time, transaction the mid-scale period business, data, and X% the and of is XX%. is IRI, QSRs XX chains X.X%, down XX is down case, at universe, like down of we instead probably

as again, averages here business our outperforming shared at well. I in foodservice we're look the you If my commentary, as

going about perspective? to pandemic. that sort we in I lap bigger do is, on going And those that's this And your we be, to this weeks from how food and a going because out, weeks in down lap that's the see about forecasting the normalize. place exercise took is most probably true to the it's we're do service. think stock is of difficult Now COVID. to honestly, What severe begin begin of can just is you pretty And the a you'll maybe be where like said, it back in X uncertainty we the up offset first couple categories. so the And to see of asked slow impacts that and surrounding when question we calendar know

predicting to we're of availability of we're things, vaccine. trying As the how far the a lot as internally, sort

least being inside people living see me, really areas, this with are part widespread, to guess. fiscal to year, more as becomes return will hypothesis we're restaurants, at transparent into the urban people inside traffic Our effects of this we is through of of those calendar seeing, circulate just company COVID the as and think more planning We're see you, that to for and we particularly early to the open next. end more excuse in up vaccine year, be the the us resume. difficult It's of the with going work able pandemic, and broadly, that

Ryan Bell

million result costs. we're of incremental some the thinking detailed said a you you've COVID, to been it very $X when costs, about million in and having costs $X that as helpful. I in was like of And was think bear hard That soft

percentage out point cost up what a vaccinated. And their what where that vaccinated, looking basis? providing what type percentage or cost the we've you're on some heard of of that As -- that get to of of financial incentives that do a critical permanent get getting employees removed to size firms to a ends employees your

you If you able guys that that, cost? touch one-off be would on doing are to of magnitude the

Dave Ciesinski

address basis. about what, how there's why in why then COVID on parts the maybe going about don't what, Well, let I'll the Sure. period. There's over -- for it question. to talk it. how I then we're it to don't to and the two go-forward And a cost thinking maybe we Tom And Tom the and turn the the dimensionalize briefly we're

I'll turn Tom, you. it over So to

Tom Pigott

Dave. Thanks, Yes.

costs. we way wasn't COVID then what those are up set incurring we're shift. about the really That's So million million our the And the this Hero talk the quarter, those costs. necessarily to on Dave costs I'll that's the million in specific another are soft network for the And components $X -- costs, separations let of we And in the hard shift $X in had Pay think we call and that, PPE. outlook call but to $X really those we cost. in what really mix another because have

So with And transportation the unfavorable that less over we've keep plant lines, time network. demand shift in it, increased we more the to got we're up move had. to run there, overtime, efficient to -- around product more mix, having

So those -- hard, impact total so that's COVID is X the -- soft. X

stop there I'll share thinking about about how then Dave outlook. So let the we're and

Dave Ciesinski

Tom. Thanks, Yes.

driven vaccine implementation in in is for guys the at which tiers: happening bear of me. you each state is function this, two the first availability, so then the strategy unique And responsible with place plan. being aware are federal The So their what's is probably is putting level. of really a

number likely and states, we we we what different see to XX New factories we hospital in co-packer thinking is he's might frontline just had to his the nursing an have to us walked yesterday have focused had on what and operate moving health in deaths, in here homes older team resident that between somewhat And settings. see be California Governor through talk you where Jersey, population an have our DeWine, in nursing homes. Ohio. as we I concentration a plans. and in given share What implementation here he So in X what And tragically see and it's he workers his been of an we what care that Ohio how important think or essentially, can about we are the might with where to governor then opportunity of through

then he's our other down what age-related So vaccines. through workers a made expand and out to and starting it straight teachers work priority the now across to those. And just he's work frontline range,

expand the above to plan indicated and I starting that he week. XX think next So are it people to was

along that you view a younger the our whether on of we're if and we a we in cetera. critical down effects, to given educate of employees begun Ohio to engaged think about we in care et and should pulmonologist out state line to what we've is feel sending internally physician. in it's have of is vaccine, with states, be been that And So the What cetera, healthier, it. other the expect population, probably are physician, series why et to pandemic, we've safe that early it's the e-mails in a to tends our our about developed for still though, them use, do ways terms employee educational it this when side we or the is can what see --

much process leaning next So and get incentivize process. is can we're rather that something financial And sight that, to start be a that's sorts than we get to our the would just the and how that probably announcing to I the of we would positive incentive their people of financial of feel And we're months towards for to when we've doing creating employees, And we education line of punitive. thing well-being. second working safety in the through begun guess vaccine. a we're as planning, in shot. We the we'll see expect handful about better for incentive something

if without have third looking comments, that where that fourth we maybe So going brings through to the sort you and think least all of come the and ready I challenging of started intents back, back to impacts deal some earlier me vaccine that to quarter. pandemic the into the at with we're in the quarter purposes for be then to of and the

Ryan Bell

And very I That helpful. for was one me. one think last

commented data, regional the in we've retail. are on has in products retail? conversations IRI to Chick-fil-A as very think the foodservice and helped you've you partnerships been and facilitate how maybe other potential state Can seeing bring to As this doing well about products with

Dave Ciesinski

Yes. it's question, a No, true. it's great and

only big I is to that up most think actually X-plus look the but they're the It's not seeing for obviously, branding terms at success, of them. you the in period, a I'm Chick-fil-A XX%, are win back out building our which a ladder an was grow these about to not chance days, revenue that, would incremental put game what catalyzed zero-sum for Wild reaching eye-popping of to in foodservice we're has these proposition if traffic of the when foodservice appropriately, as core a with the that seeing these also a Garden, with Olive in program. I I and incremental an business And what big and with Wings impacted. us suitability just Olive Buffalo of is more success is discussions particularly Garden business. are partners their it's license Chick-fil-A, a and partners source that in restructure you it's year passing conversations, we of which more important the is overnight for awareness. cases it recent a together fact very of think our But And early proud proposition have

we're they're to So be and just proposition, just deliberate. a great trying

it As a not? going long-term faith just the to in partners to be everybody truly fit or for we get and good good decide, calls, new sit we trying the is down with

Operator

from will question & Brian from come Holland Your Davidson Company. D.A. next

open. Your line is

Brian Holland

repeat. So few on just Chick-fil-A penetration there curious, you provided metrics a

versus a you top of velocity for any us want Chick-fil-A those context competitors maybe you standpoint, look is can that Where its do whether whether performing give at in it's markets? go peers? to sort or way quartile -- in or relevant you your curious, it whatever Just versus some from how of

Tom Pigott

This Sure. starting and No, maybe our Brian. And early. is happy with to, rate. penetration repeat

has So the Olive that of where data, a comprehensive it's ahead of look been in which of have own is that source benchmark tracking performing we at Florida, sort our been along. we all that at most we've data and Garden business,

with out this, little that to why looking at only I'll reason little hesitant condiments overestimating well. most really sauces in be on maybe with not right? why room expectations, of The When is So the of look we the can that somebody at The given love get that bit skis all we're we're they more, trial, to and beyond there we line It's at all a this. novelty three up as category, it, us to top our been that looking But it. bet in want some another it favorable the velocity. on has we're the at they so back, quartile. certainly at once, to don't very repeat really But that effect those looking buys comfort that a right? and commit hesitant triangulate gives we're velocity it's to been early our of is bit Velocity velocity come and strong. just careful item board. way we're the in looking it's of top the over and we're That's we're across metrics,

Brian Holland

that's investment you any said could you the what how opportunity can XXXX that comes could or and perspective That's facility revenue in revenue for if something expectation? then I mean, that think out as come I'm of I of online Cave us I it helpful. $XX to is that -- like -- thinking like the to it? you're give about sounds million a like something move feels done the not that. that's facility. And Horse substantial That wondering

Dave Ciesinski

Yes. Correct.

footage number So things square that going the it's or at that feet of we Essentially, to number facility. square first. of have double first

the It's it's testing -- that is only lines, but to particular facility flagship. it's to this include point then retail. What that. not to going just for our I going going Brian, have, bottling both kitchens isn't that's foodservice it's our double to but build Now would largest. and facility essentially also, capacity include And we and

If little before about ago, of at had for a of pandemic, you bit those the an a announced with Chick-fil-A, Chick-fil-A kitchen project restaurant, Horse just if you remember, and capacity the year smaller growth Cave, the particularly cuts, onset the are right, [indiscernible] ones. expansion we plans to the then at keep with polynesian of you sauce one capacity, get other the sauce, up

And so that, Then We plus was to in include capacity. rescoped that. flight. backed bottling we from project the away that

probably terms next going a comfortably future feel to biggest far capacity but the will We for it's that it's to to take [Indiscernible] have extrapolate the I how co-factors X the growth investment. it place. with for substantial that to necessarily in So like based we've us. of dollars X would in provide our It's made, our on we years you not try prefer

Brian Holland

Understood.

in You kits, mentioned your prepared remarks. Dave, meal briefly

there you doing guidance, in For that what space? are

Dave Ciesinski

question. It's a great

protein they're branded offering but builds, we've proprietary other various dressings And kit their sorts, So for working our that for been of have their own companies kits. salad and builds. salad thing different a also meal different on number meal or and both proprietary just the or the are sauces sauces protein

Brian Holland

one it. me. for Last Got

when a pull that Dave, pass often to widest the subject So market the pricing, can and is perhaps I companies community cost the We're investment I of on the CPG thing believe is of lever. industry the divergence, skeptical need right? is sufficiently between think, higher they --

and as we've food seen, we confidence can an it perspective on yourself how like that today your inflationary that So guess of love really to you are market of basket, and level the get manage would contemplate ever backdrop whether need? big picture companies the watch anything to what through to like get I you going try commodities maybe food can manage

Dave Ciesinski

would it's an say Yes. imperative. Well, Brian, industry, I the for executional

into believe a look commodities. there's seen seeing the I entire as if we're we're weed, guys sector just on we basket be to in prosperity. appreciate, inflation. to the inflation cut can discipline you in to other how you us in strong needs inflation me seeing I back see space think we're been the the remains packaging. right it we're that Colony, inflation peer transportation important be at you problematic to segments We're money we need together sustained costs an brings but that can other the If economy out part you Cost as us so that we into seeing becomes to of our the it to companies, path on period our figure just which feel it do, it's much to for can and pull soybeans, I the think it -- in least to what these for there's we're a fire fact don't all we to that going well. is, now, matter, see. and that pass of how for at going but cost across insights Lancaster at seeing we're because and for pass that inevitable in We've need call pumped seen inflation, on of just And like playing appropriately It

Operator

next Your Associates. from & Instructions] from King question Todd [Operator CL Brooks comes

is line open. Your

Todd Brooks

saw that quarter. the side gross and If strong the margin maybe could you performance start the we in on

different You've lot a of and highlighted takes. puts

talked realization the There's the retail. real the and saves performance sides takes price growth So business. that the in obviously undertones Can margin we your and puts of net in you've of about gross the mix the through inflationary continued walk We've had drove in a change quarter? cost gains.

Dave Ciesinski

one course. you Tom, I let Of and over that. take that don't turn why you

Tom Pigott

Sure.

accelerate. quarter I key enabled stronger -- would that higher gross We mentioned, and margins. the commodity that as us, better savings weren't drive Certainly, I quarter. we and the savings QX's segment, as So growth of retail I've And we list And growth cost the trade this for obviously, get second expect impact -- to the well driver ladder did outlined expect in -- see we you environment, as programs. reductions had certainly, profit helped the bigger programs say to our do were as we the expectations. back segment and you. retail exceeded post it demand. helped into in the big to a did margins cost COVID face But us a the costs a performance, driver think, to the compare the I our and as we really on Commodities of revenue for in as spending, performance. the -- also could COVID the that trade inflation The that you

were those going we're focused The forward. going as things keenly that Dave do items. in mentioned, inflation on, we key the expect forward, commodity So more

you going and them. certainly terms into to we're identifying then different And offset get against to of have in look ways the executing opportunities effort at good as So that got to a half. second we've

Todd Brooks

you've some in and managing but product with of with pursuing the how opportunities additional got necessarily growth. new not to aggressively seeing growth few delaying, maybe then with or I talking That's great. as with programs, that existing you're retail? partners as with minutes growth newer Drug you're distribution spend And Are like strong you're maybe strategically there not foodservice a the That's the that either the that you're channels about helpful. secondly, managing that just wanted rollouts Dollar,

Dave Ciesinski

a shot that. It's maybe I'll question. at Tom, a take first good

do, business, and XX% the that and strong seen look is case What the in to make that available As period. us as right. promotions a work in obviously, in sure that we at demand way Mature back growth we're seeing great is point, consumption categories. managing capacity. continue Garden pulling forcing just Olive have to you hard The is to brand, on sales in that by various we've trade

it comments, in the we're The it's sense problem. And requirements make whammy. to mentioned pull them. middle more penalties, of those in advertise also for Internally, we the our As double need need advertise of made our didn't don't advertising. it's So back the We incur we of compounding choice if prior some to that on extinguishers. the fire customers, when sale. a People things, extinguishers the Tom advertise and we to his we right? service sort a don't are we buying felt

sales of marketing. we're churned promotion terms mentioned with Obviously, have and earlier we calls, we working co-packers. how in So activities in

get penalties sort we But aggressive other way expect out we as so things the put And promotion place of do is of our into with as profitable didn't back where incurring and we've actions, we expansion and because the bit channels, service. round customers would levels of to in start well to a just marketing to spend, things which tapped on our normalize, start of we're strategies. brakes one issues, resume because we more ourselves COVID our just situation driving own that can a for and other little in of get to see fines want we disappointing just service poor

Todd Brooks

I And may. then That's question, if a final great.

How retain you we're And about How customers? these new-to-brand of pantry from -- lot been load, about, data have tougher repeat we're as and being far you as a talk loading some promotions the the customers during in you if okay, able been then able able that? how pulling back of about But a you've trade elevated to brands pantry activate pandemic, your they the them? compares what important during successfully to were we've thinking that that and show just trial new does that are as and during retail think standpoint? lapping lap your demand on saw to seen you some the If advertising.

Dave Ciesinski

great tell again you marketing to to to what focus new get take problem those on and will that retail their has them Yes, narrowed our I triers team And try and again. specifically is it's try question. a to

And so far, we've of seen fair success amount doing a that.

we're from people home. know we're home to the we've the to be we're their call inevitably, start and retail tools on what and they the some eat go What they're a away at the to see, maybe, and do it, we're to going a optimistic of that mean, is to And mean. in in regression to that to that to specifically So allow going begin occasions to the of we terms consumers. us lot normal revert sort eating to that to home taken able this focused let's where will when a -- and industry-wide, on of of in hang see back is those going number patterns back

that process Our hope occasions a in go new to down, in of is, disproportionate those of triers even the hold though number those we can share occasions. on

Todd Brooks

one have one. final to got more I Great. Okay.

Tom Pigott

Yes.

further the to line Dave the to to into maintain in spending the in add, trade as to full. those Just mentioned, year, do get both the line expect consumer continue we to restore we customers and as try

Todd Brooks

XX% -- in I we're A Okay. look you is quarter. with just Can of a level Because tremendous how they're for we buying segment in lower seeing? the that margins kind promotional fire the licensed talk final, versus Great. the much mix like working the And of said, retail, operating north when result. products this extinguishers anyway? at

Dave Ciesinski

Right.

a let I shot don't you why at take Tom, So that?

Tom Pigott

Sure. Yes.

certainly was of So performance The secondary the driver was the overall in the growth key to mix that spending, margin was that that. the trade [indiscernible] expansion.

the your So before, margins retail at growth the program, the which said or a as achieved, the above products key And those those are we in of of overall part good were licensing segment. segment the items. was

the -- for driver. as back to be tailwind the more and So that the of as to to we into we that's mentioned, hit comps QX. QX going a towards key as the Chick-fil-A Dave as end expanded start sauce, be half, be to we difficult continue expect And us progress in we

Dave Ciesinski

week, impacts we the create and where we our of that hiding And across it's may COVID, QX going natural to outlook of just begin about headwind as that more the or tomorrow going a tomorrow, to But business. states. shipping And of not this me. into heard handful that's my time Texas same shipping but excuse week, we're comments, we're at happening, then into in think again as be sort our you into that's point begin to retail QX, Yes. next a as lap a in

the XX in that then back until remainder and the lap fourth around of east. then is states I through expand Far we more that the to beginning the United fourth -- West. build going retail, think We're going Oklahoma of States, up and the Northeast posture the stay continue quarter, out to think, distribution effects Mid-Atlantic, outperform. we It's going the sweeping as the in to to in sort in we it's begin COVID of to of those activities the allow us towards

Operator

for questions over call Mr. further the remarks. turn no queue. I Ciesinski to now have in closing I

Dave Ciesinski

you, the you, participating morning. thank May. and in with of for Michelle, third to quarter right. this thank everyone, great our you day. early sharing forward rest look All We results a Have

Operator

will This Thank you, call. conclude conference everyone. today's

may disconnect. now You

Lancaster Colony (LANC) 4 Feb 212021 Q2 Earnings call transcript