Lancaster Colony (LANC) 4 Feb 252025 Q2 Earnings call transcript

Company Profile

Participants

Dale Ganobsik	executive
David Ciesinski	executive
Thomas K. Pigott	executive
James Salera	analyst
Alton Stump	analyst
Brian Holland	analyst
Andrew Paul Wolf	analyst

Call transcript

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Operator

Good morning. My name is Carmen, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation Fiscal Year 2025 Second Quarter Conference Call.

Conducting today's call will be Dave Ciesinski, President and CEO; and Tom Pigott, CFO. [Operator Instructions] And now to begin the conference call, here is Dale Ganobsik, Vice President of Corporate Finance and Investor Relations for Lancaster Colony Corporation.

Dale Ganobsik

thank Year joining Call. XXXX and Lancaster today everyone, Fiscal Colony's Second morning, you us for for Good Quarter Conference

discussion of number provisions include to may update events. XXXX. . These Litigation materially, this which SEC. subject of and results the Our company filings subject discussion to uncertainties are are to could a Reform to forward-looking Act A the risks obligation the subsequent of upon differ company's statements, and risks harbor statements Private is of Securities these safe morning actual uncertainties based cause no statements the and contained these detailed undertakes in the with that

lancastercolony.com, Also replay be this note and will the call of audio this later afternoon. company's available that website, archived at our

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

Lancaster I'll Dave Once your appreciate participation over this and Ciesinski. President turn again, the call morning. to Dave? we Colony's CEO, now

David Ciesinski

ended Thanks, with year income. fiscal XXXX. pleasure a you XX, good our and sales, operating Dale, here reported quarter and second gross we for results for net In which morning, to today quarter, review be December everyone. record It's profit fiscal second as highs we our

our subway both own and Roadhouse to dressings. growth rules. sauces, saw our million, million. In Buffalo and and Texas with driven for increased demand strong sales improved sales very Olive the program Wild to profit Along solid Wing dinner recently sauces from Garden introduced $XX we contributions retail operating consumer our $XXX from increased net licensing, licensing grew brands. net volume to X.X%, income $XXX XX.X% by segment, Gross Consolidated X.X% million. In X.X%

Marzetti refrigerated to Carmel also pleased performed dips our share and that I'm branded well. dressings also

lines, last XX X.X% in scanner several our retail December core bakery brands. sales Circana store grew the the licensed showed of performance quarter we perimeter for X.X%. Retail segment for net strong data pounds ending of March, the exited measured shipped segment items in volume and Excluding increased

In a dinner grow the to XX.X% category, Sister roll our Texas XXX own market of category-leading brand Roadhouse a share frozen in and XX.X%. combined points our to increase resulting basis licensed brand Schubert's

Marzetti brand frozen XX XXX basis category, share, resulting of category, sales produce share New basis basis of in X.X% Sales of grew our In leading our dips adding In gain advanced XX.X%. X% points. York our points a increased Bakery of grew bread with points. category brand the the brand market sales about garlic a and share Marzetti share produce XX dressing market market X.X%

dressing dressings In dressings the market over shelf sauce Olive sauces further of condiments in Chick-fil-A Garden stable sales shelf-stable Wild the category, shelf-stable X.X%, and sales up were share XX% category. X.X%. sauces In category, grew were their Wings the improving Buffalo up and

channel amazing our noting Since addressing. more eponymous with early worth growing we since been club testament million strength potential and performance to Buffalo we've It's those Darden of the believe the Chick-fil-A, of brand program. is a $XXX a sales. the a it's Texas consumer days, Garden most and over others Wild and long-term with to their cell to formed SKU license platform that such the recently, licensing scanner Roadhouse this the our brand enduring relevance and expanded multichannel as now sell decade from restaurants I of than Wings Olive this X in multi-SKU, agreement brand

sales core net X.X%. Foodservice from national shipped our for demand foodservice our higher branded pounds X%, measured segment in and of advanced several increased volume by segment, led Foodservice products. accounts sales grew the chain In restaurant

second we XX.X%. by pleased to The deflation. last increase when $XXX cost in gross $XX of the was impacts profit million volumes profit year's favorable compared to savings ongoing modest report second profit XXX million, record quarter cost margin higher initiatives gross the to driven more points positive sales some improved Finally, of sales our basis are mix, quarter, gross and

supply our all management and to margins chain improve Our and revenue focus on financial further core productivity, elements engineering remain performance. value

Pigott, commentary Tom quarter his on I'll second the our CFO, our call now turn over results. to Tom? for

Thomas K. Pigott

Overall, quarter for bottom our the results line strong delivered Thanks, and results. Dave. the company top exceeded expectations. The

by increased slightly Higher net down offset higher revenue balance. points lines, bakery Breaking revenue up makes of points. partially sales This was of by growth level of the basis XXX XXX pricing the basis million. our product of Second growth. mix quarter store X.X% product the A contributed to performance. perimeter exit $XXX.X by reduced which consolidated and the volume net core

million X.X% and sales and prior deflation. the year XXX million, volumes cost growth or quarter margin favorable by $XX.X $XXX.X to Consolidated gross expanded points. basis our initiatives cost The savings driven modest gross gross some by higher by versus profit mix, profit increased was and

the Selling, $X.X integration recently announced. million are million costs Atlanta-based primarily manufacturing IT and expenses X.X%. $X.X or increased of administrative The for reflects expenses. costs for and planned acquisition These facility legal the general increase comprised of we

improvement, $X.X I million gross the offset increased partially or integration XX.X% mentioned. Consolidated profit driven the by by income costs operating

million the Excluding by $XX.X integration XX.X%. grew costs, acquisition or income operating

to continue these liabilities were December to receive payment transfer the insurance quarter, company either party. and ago. transfer note relate The pension third legacy its third-party will company's years closed that take remaining the assets or chose plant were their the many to company plan sum participants lump elected effectively that It's terminated from of plans benefit benefits plans and XXXX. operations the a to During pension This to frozen a to plans. important in

the recognize with costs As to plants. a result recorded pension the a associated company all of unamortized termination, the noncash settlement the million charge $XX

prior quarter tax our We estimate in the the rate versus for quarter. remainder year rate be XX%. for to fiscal tax 'XX Our was of the XX.X% XX.X%

in Second This quarter X.X% the $X.XX diluted income earnings the EPS charge offset $X.XX share. reduced as charge. operating growth was $X.XX decreased settlement by per per by share or pension to

In addition, EPS costs the share. by $X.XX per reduced acquisition integration

to for $XX.X period. capital the fiscal payments expenditures, regard totaled With additions million year-to-date property our for

For fiscal 'XX, capital $XX are forecasting total million. we expenditures $XX of to million

We manufacturing continue the other well savings as cost planned acquisition both facility. to in invest improvements of projects manufacturing as and Atlanta-based the

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

XX cash December dividend increases dividend represented quarterly paid enduring streak share of from amount our years. at X% -- annual increase per XX Our year's a the of prior $X.XX on stands

and strong remains in a cash. balance sheet $XXX.X position million debt-free with financial Our

$XX the deploy the to expect purchase We Atlantic million towards of manufacturing facility.

in will capital million provided. the We additional spend which an fiscal in facility 'XX on the I forecast also is $XX included expenditures

To growth. our double-digit commentary, and up performance operating results wrap quarter reflected second strong my margin income gross line top improved growth,

support we're investments to growth savings. addition, make continuing cost to In further and

turn I Dave back for Thank to will now it remarks. over his closing you.

David Ciesinski

Tom. Thanks,

look licensing. expand and of Lancaster leverage ahead, and and of chain in our continue operating two, accelerate margins; business one, three, our strength To: to our As combined our will growth; simple plan. simplify our strategic grow to the strategy our to core our growth supply the cost our X focused with pillars team, Colony we sheet and reduce support of balance core M&A

will fiscal program we year, third and to to our our anticipate and fiscal brands. sales benefit the remainder expanded our growth from innovation the of ahead continue segment investments quarter for and Retail Looking from licensing own

strategic into expanding are the for we'll spring, to club channel. share be the very Chick-fil-A distribution We excited sauces beginning this

mix On and for U.S. the Foodservice business, consumer growth side along behavior performance continue national from in impact ongoing We foodservice accounts our factors, including we external will our branded anticipate to the anticipate continued of with of customers select industry foodservice contributions overall. economic the demand products. chain from

remainder anticipate inflation from input aggregate, With we year. or in not impact cost the do respect to the deflation in significant costs, of commodity

I like remain announced quarter, XX. Atlanta-based March last facility this We I to Before comment and during of transaction to dressing ends complete that sauce which on November. track pending on briefly we the the current conclude, acquisition this would

to a proximity strategic our certain benefit customers, core efficiency, all network important operational We manufacturing from an enhancing that scenarios most and while the manufacturing strategic the is long-term the sauce facility and our several solution sauce our to through practical and of needs. The continuity improved core growth to incremental evaluated opportunity closer dressing our continued as for support addition network business identified and this dressing operations our will standpoint. capacity cost-effective and operations business

to the Colony quarter this Marzetti forward to their our our closing, employees and I'd welcoming plant's for We entire much Lancaster thank to past to commitment work business. hard the all look like team. ongoing team their very In

Operator? to and today, for remarks any prepared might our we'd concludes questions answer you have. happy be This

Operator

from comes of Stephens. it And Instructions] [Operator line with Salera Jim the

James Salera

of impact? strong I a results, more Retail out off of license the called the drivers products our And the give performance with mentioned license detail just you at really certainly you of of side business. ahead wanted to Could some as us there the the little expectations. on which the start to because you had biggest

if a part maybe And to could X I then tag that on question.

the of continue to on? club With is no should it the say moves perimeter kind into expansion the more exit, lapse to as Chick-fil-A retail and fair from of that then sales year accelerate

David Ciesinski

chance Will and those both us questions of sequence. we'll a Yes. hit give in

in But impact that pertains our as First, is. retail, of to you, current was would licensing it what what particular, it I what a was than brands. different quarter combination tell and it outlook

that Texas are available if you sales, scanner in it's important that Walmart. of accounted look of rules, growth. Roadhouse the the component at for an introduction And which only First, today

Wild was about an XX% Buffalo is is It X sauces. that's second around terms The about pounds. in of years. been Wing This now up item

period as a really well. had it So good

period. and and Garden I things I to of brands own relatively that's continued perform contributed grow of both focus Chick-fil-A the sort to is also then sequence even well. continued But what think to of core pound Then growth. ranking terms in And sauces the shift our to how would well Olive as these

consumption up Bakery pound in sales X.X%. were Our of New York terms

and produce had to well. Carmel grow really X%. was up dressing as We Schubert Our continue season a for Marzetti good dip Sister

margins incremental profile. improve in you that, are channel exit is a able created Sister because to we some that Schubert but of overcome the margin made to what the on our don't low, were deliver a headwind a and we growth And still see that decision bit

our net-net, between and I it licensing licensing more. bit So a was growing brands with little think own balanced

think the outlook? Now optimistic holding our new We're our pipeline. core your do important an about is How about bullish are be product continuing to question up. about second brands one. We're we how

But looking depending pleased to on consumers. things low going. with mid out with how at probably we're growth, play we're So are certainly, things single-digit just how

James Salera

SPXXXXXXXXX question I just maybe And could in if Sneak a then foodservice... on

David Ciesinski

pricing on in all And the that's pound-driven, know, you by there's that. assumption way, so Jim, just no

James Salera

your mentioned price the That's you have progresses? Great. see to core say, extensions. drivers national on I going know we're kind a flavor messaging been just there's bit there. lot in focus you helpful. focused let's kind of more in Okay. the to you're points any accounts little just On the better foodservice value-centric particular, the Do Foodservice, as consumer experiential messaging, partners if being conversations of kind of as of return LTOs gets year having a of sense with a and in kind versus the the QSR

David Ciesinski

In having somewhat they're think be recovery. the don't continue a we're expecting they to I miracle them, that conversations with circumspect.

as to I see to be low point, the going probably push modest that think is consensus improvement going then summer and the the forward. sequential was we're we generally,

If most that points that was business of X%. the It you volume. X points results, X.X points. you X.X was at It pricing up gets our to of was look recent

Chick-fil-A we our to you in environment. is important our customers continuing look store of to because and have at are customers, a of new pound contribute winning other specific execution. that But openings range obviously, mix If their growth very this of

which playing just in we're in which is them. with Domino's, Pizza winning value QSR, of One and effectively

it they -- menus really on their It doesn't they it and profitability and traffic with as far help typically help brings overall. their restaurant, prolog, the value margins them Jim, positioning forward. back doesn't with it As into see passes focus their that going but more franchisees' until is what we

So I see value. expect on to certainly think intense not would a is what I more focus

to start little that see and more to food. more begin may focus on great a bit just down delivering wean You

Operator

of Capital. with from comes line question Stump next Alton Our Loop the

Alton Stump

been, came Roadhouse. and Dave Texas the how last that much secondary I sauces about as like had sauces. after mid-last introduction it Obviously, was that dinner year ask roll, the year. to you accurate us into even given again guess, introduced that become an One, first of it first the then that, has course, of business of bigger the our fact Tom, is sauces sounds dinner a the frozen was than came once offering a want rolls thereafter I for surprise that and your out with that

David Ciesinski

question, Yes. It's a Alton. great

You restaurant that know what you And know for anybody I people space know you're very visited you you tell familiar roles and of would with like visit That's those and I reasons are you, iconic. has, restaurants. that the Roadhouse. Texas those one the

the Roadhouse that mirroring and role in are partners And of pleased that we've the Texas about really the teams we're one is job done a of of taste pleased our available that's restaurant. nice about at really that

performing stores, got we've their so So of Walmart, well. and it's X,XXX it far into exceptionally

$X.X million can stock, If keep week. you it running in between and $X somewhere when look sales at million per it's the scanner we data

with goes you Wings with back Garden just the Chick-fil-A. loyal consumer an there's iconic lesson take learned in can for really those So we've strong it to restaurant a property But Buffalo with products performing following think retail. Wild that a When upside product -- from it's with of Olive lot I well. a and

And unfold. story that think we're to to see I continue going

point actually next and revisit fiscal all at stores, year launch we'll and to across this mass online then on in future. the into -- channels plans roll to in states having to in our to all do product which then more we're as and channels capacity, Club first not begin we into but early club, out retail, Our X are it it all bring of retail in all some to

But this shifts keep It's take with more that of up been enough we've X is had demand. exceeded expectation the so to add not plants bakery X an -- development. X exciting our -- to actually it's our and just

Alton Stump

Got hop guess then and it. Great. back in I X queue. Well, question that's I --

been is to side, the all for lot industry of and if question driven years away. trying comp the -- couple last primarily restaurant can, going foodservice now growth. traffic That's There's space. a the about everybody to of get pricing On they to last back clearly, back. has that cost their but

So given into whether of fit that collaborations, think partners, guys items. you're going environment sauces a with on new you have where focus is would it and/or products, what I to well lot do or that similar developing your

to major see look if we QSR How particularly the you much a you of kind could your calendar of from benefit course as that do customers focus of think be increased 'XX, to new at on indeed drive an you do products traffic?

David Ciesinski

Yes.

probably So likely alone is our sales, traffic outlook for the industry or is this that let's on that it's points. to down it's traffic, X X is but continue not say,

our food Our be in flattish. services view that business on will

back would -- we'll improves to that that we able the that low into this stronger able you to be mid-single-digit an trends the we'll which based to indication those fully be guys I'm composition trend to So restaurants, of traffic to that consumer sales and and customers, believe on range. on gets able be give the overcome we'll confident enjoy mid-single

macroeconomic on outlook. for now, predicated But the

we're this of but recovers. sort on business, at recover holding poised industry to when fast I the flattish think

Operator

D.A. next of the Our from comes Brian question with line Davidson. Holland

Brian Holland

strong if I out the that could just quarter, think gross in maybe specifically right. input on cost modest on If -- outlook and just Congratulations quickly I called the the Obviously, the margin you I have deflation results.

obviously where that's improvement been. an because we've think that extrapolating out forward Just I maybe from

the half view dynamic just that So we tease out. over year, that that what's second as out how how on your shakes the of

Thomas K. Pigott

Tom. this you. is Brian, Thank

That little you're was for results. bit quarter's a tailwind a have of of a right. So did bit deflation. this We

cost seen you've read we're a from we tailwind prices about oil grain behind of more what's half, expect us. it, to costs. of at benefit terms costs. soybean and we've egg input flattish we're we look sure is, I'm As lower that's lot don't that quarter. inflation this second on really, commodity that and in . And But projecting experienced have getting that key We a the the and for

when we're second So looking outlook half. together, for flat at net the all it a you

Brian Holland

I and addressed That's forgive it. the helpful. that maybe And may been and then this -- extent missed have to me

new opportunities, more demand this strategic facility implying With to of revenue capacity has optionality discern there's between looking more just your kind at cetera, et et of that Atlanta, the up in manufacturing versus cetera, innovation opens maybe increased, sort network.

is X extent, to first self-explanatory. some the probably, So

But through when those for quantify cetera. And second optimization, picking -- -- kind start on might But through? the cost want of flow more about one, margins synergies we to to just margins maybe maybe plant do this expand of think see some probably just your the time, time wouldn't ability to line benefits we I that. up appreciate you et over

David Ciesinski

Sure.

don't why the I'll part Tom question and margins. the address -- expand I first let on of So then

first is capacity part, we the what this to going close we and So this Really several products plan cooked noncooked. make to a to quarter. It's expect to is as that in our commentary going upfront, are us give said both us afford things.

like give background, for cooking, like muster barbecue And you just whereas things and things honey sauce to a ranch example, don't. dressing, a require

mixing those. then just packaging and on ingredients You're

this in importantly, a as to noncoke they far lot us the in both And options plant, and a cooked abilities, line. have high-speed play of packaging gives particular provides So as and then packaging us dressings. both sauces which

have a to time, going Over see to packaging product to we're specific platforms. They there dip is range begin to food expect service well. system do in to platforms then as us have you our use. put down some able capacity be of And what they manufacturing that can of different

example, not For today. a Chick-fil-A, they're use we supplier for which

us will located. it You of provide down particularly put for in course benefit due and a expect to way it's both for by can that and there, where us

is and a thing us say single in of customers. of that would biggest in location Brian, different of cooked for a proximity packaging non mix it's highly us, great I cooked platforms, and the range it a cost-effective So gives to terms

is how outlook to let to and into does you, on things I'll like talk feather it this turn what then that Tom course. Tom. Now over our due I'll in things like sort of margins

Thomas K. Pigott

Thanks, Dave.

So from the continue facility look an a top grow greenfield going low additional to growth basis, we're us digits. mid-single we grow we've algorithm, line as allows continue to additional to long-term This to without in our said option. at

efficient which out, modeled So it years supports us. X as growth for over very next our the of it a is capital we've use

modest now first 'XX, headwind fiscal time, quarter we nice caution I and then we as unabsorbed have facility margin the see the a you X, be would some that into ramp over is So we incurring. to into do to as margins. up. from as overheads that start expect we'll What this expect do turning into business. get that We get But some accretion it

mentioned, growth us. you but quantify not the we're I it's margin As projected X nice want make to to and probably on ready thing specifics accretion we sure provide that, to X-K for and The of seller going the manufacturing we for products period a costs for of in facility. the mentioned this initial highlight that time, this is for be manufacturing the to we're you, in release

picking We'll in view a short nature. splitting it that it profit don't out to facilitate noncore have take separately. and we'll expect to significant but do the up we to be because we as transaction. So that out and be you agreed to revenue business, their want impact, of we term some that We

it have feel our return get nice to overall, in, with So and very a we'll this we shareholders. more you. acquisition, for as we we expect And further good share about

Brian Holland

input I out to costs, left the if input that question, throughput complete helpful. with the input about specific gross color talk just And That's margin, in to thinking would the probably we that question then Tom, Tom. gross there, want just Thanks that fact good things on in XQ. the last But costs to there. separate we the broaden volume help closer should over about some that and first balance be cost. the that if I be would could was benefits very presume margin of point higher of year, because second just maybe expect from respect And primary in I margins sustain, and the year. the the driver to half you of flat, if volumes clarify to expansion

Thomas K. Pigott

Yes.

margin second have we as do the to expect the contribute look our to I cost at half, commodity we initiatives think won't why growth, further savings tailwind. we our

expect second So basis at the levels we be first our half, cost of greater XX to to as similar we as able look maybe to margins in XXX in grow at initiatives. it, half the the savings range get we point

of and And we'll the impacts manufacturing could be occur. an to all integration only they give goes. those But impact certainly, how headwind that the the facility, Atlanta the that ramp-up that is you as

Operator

from Scott [Operator Instructions] with Marks next Our Jefferies. is question

Unknown Analyst

of you been the going are that's wanted margin gross happened side. cycle X follow correct, on was over up QX some the my the that up else there to Just best obviously the guys the on numbers margin put in past through conversation inflation few years. everything it's years If gross in and cost that the

the case. you this spoke the how moving why about a that's detail to journey know sustain you've kind if been you you got level. you you've of it could of that of to give can bit maybe and and kind more think I how And the on forward. XX% wondering drivers, But little some

David Ciesinski

Yes.

a of maybe bit little start with context. So I'll

on of hundred particular, go years Scott, inflation math in a might had business, that pricing, of into it that row. part in sales itself you One dollar is compression of basis imagine, the up in COVID. COVID for dollar margin features our to as and XX%, points pass X% we of the and our but of our early we X i.e., several that And in costs our drove for is

you've other of seen of noise you've a a that. pricing business behind bit us and lot talked what Tom the the the -- is to is is able to about on period little And we've we've seen seen hold us. the been has But in thereafter, that's then in thing deflation as happened

of construction us. us. Horse facility The behind behind is is the implementation ERP Our Cave

we're team back really focused And good productivity, end-to-end that's getting the of we ordinary just and on and more a execution course. to have now

think pointed going outlook some out, big from as see you it we If get expect about tailwind don't we commodities. So can the expect great, to on Tom and of as to forward, reflected just margin. driving going back to we're roots that to view see the able that is our going trends in be you productivity. we of because our sequentially build

Manufacturing lines, and conversion productivity the supply transportation and of and at logistics back our and excuse the procurement and productivity. productivity front logistics -- chain me,

have a that big So see that I you'll team catalog the of very to initiatives we confidence is job. nice that continue running. every improve. They're a And doing have

don't think So to put continue to that expect fine high X the but a it Clearly, was on a point we a every we going to build just watermark, quarters it, of that, forward. was on one-off.

Unknown Analyst

can about next I top licensed obviously, products. you out Roadhouse you're line introducing brand products, the including the more you recently, owned if the called some some retail will. for know of Appreciate some improvement talk York of drivers that. of of Texas Marzetti Subway, Lancaster called me. of brands, question you you volume licensed if And items New strength, some the brands. why out the products the wondering of some in And

and spoke the of Marzetti So York the New products. brand some to dips you

Just drivers and the some of think speak those what if are. wondering to could new you you trends

David Ciesinski

in doing but to the well, hit we'll side continue our In also breadsticks X on launched garlic New we proposition think Well, crush is I of our the our marketplace. York the at Texas of that case a time. bread value Toast each

the So good York. plus core is providing performance tailwind on breadsticks New what's

incrementally our And as I item to gluten-free is then small, but that it's well. think providing

that, is you at are suite the would And doing I on on brand. well business. If rolls to that great look then holiday in which Sister our season, this that execution Schubert, add vital

performs look has year, And portfolio we Walmart, you last, and it, retailers Marzetti this key our been Carmel where product and us. had years performing the and Classics with out to to that it dressings the over part were get dips, Within Marzetti, X willing good particularly merchandise work perform others of customers, continued restated Kroger we've is can we our let's When in at that the And better. a near with our those If just season our apples, early has of simply, and a really season. call well. proposition well. the

got They us. out early, it well really and for it performed

sticks. good really, the of, the just kind good cases, just like a organization, in retail SKUs other fundamentals. on value right cases, of And solid execution it's by it's selling So the pack mix some in

Unknown Analyst

it. And me. X for Got then X last

One of obviously, landscape, I've of much kind don't us activity. promotional the food I button topic. speak hot heard think that's a the things about been across And is

your not applicable kind of and what's wondering retailers Just if maybe from you can the products? share your perspective what of on to maybe happening that's in hearing you're environment, promotional some why really

David Ciesinski

Yes.

spending in back last if we So level quarter. unpack our trade we of that the second X in is about took up of retail and and to intended the half we keep our you trade spending, of first modestly year up that the that things in talked to it you

level overall take spending to We were of the going loaded. sort rate and

marginally second first and a and in bit then third So it's going and lower the quarter. higher the to fourth little in quarter be quarter

modestly, But know, trade elasticities our retail maybe Scott, points something basis if rate through our don't is your of just was team. as all So in I our went focus attention spending to XXX with the recently is higher I Tom, promotions, it would what I period. on, pertains updated

we have And really the that spending what trade we're would isn't that driving is expected. heavy incrementality finding

like than end get cautious going on particularly forward, trade we work our we spending cap, are as things drive to us really going think to an it It's seems on display, If performance. about and can others. -- it somewhat be get So about household there helps certain penetration feature it. we're products better it license and sauces, where

to outside environment to think very of going lever activities. But specific we point this in want that we're don't lean that it's into a

Operator

comes next the from Our Andrew Wolf question line King. of with CL

Andrew Paul Wolf

now, Congratulations think that I'd still And it's Texas that it the intervals. is questions ask about -- good -- Walmart. on about quarter. featured right few looking a on I you've Roadhouse to you the being at there? can How like only talk really said

of and secondly, just shipping any you you their or about the phase. if special sort of way. that it, sales look it's Is aisle repeat do trial or promoted is kind outgoing not frozen data, And your have data movement still being in just yet of similar however their at customers sort from from view its in any in

David Ciesinski

Yes.

So we'll sequence, Andrew. hit in questions those

in codevelop we case to So that at X it's and this now single SKU idea. just Walmart right available first, were only, context, Walmart this as able is with work to

period afforded So capacity of the exclusivity them into it retail. launch a of rest we built we small to while

SKU at viral of it media shelf. fair aware support it's incremental pulling get that once retail And product getting a being not of display social X out that the way featured. was by did of I is became there. It's right But not the just amount off

incremental really marketing done So to of terms there's in nothing this. and being facilitate promotion

sales available see per launch I the we at down somewhere would $X mentioned to it keep those I full we retail, and other when can into stock, $X.X million think at pull numbers in expect million start between places. becomes as as it I to it week it's usually Walmart

a question. is Now question really really, repeat your last about important

is is repeat the like cycle XX seeing we're purchase of the in quite actually is this high. actually on The item somewhere what And days. range

this I've seen. So in category come in twice people month anything than a is that to faster back which cases, frozen item, seeing a buy we're many

it's Sister to in the we it's across maybe a you item this item when all been look Schubert holiday of frozen frozen items, If at just the item. and today, dinner performing everyday where is velocity it item item it available be the also. #X tends bread the Sunday a and measure heavy

So a great that see it's has of that just this, we the item the believe we long-term it's more I think -- legs. more think we tasting that

excited So we're to in bring that perform you share online we to how marketplace. the it continues with capacity, as

channel expand how of all platform more channels Texas full importantly, And potential. this the we and achieve help SKUs brand Roadhouse of more this and it and its into take in

Andrew Paul Wolf

Got it.

that period? imagine is just that the excludes, ACV quite secret. to would sounds I promising. So can the exclusivity outlook speak whenever Or you trade

David Ciesinski

once it like capacity, rest really also into be things And ship into performance, to begin then and incremental beginning the in X retail. begin we're channels and we'll predicated then we'll all MULO. April, it states fully on so be like ship evaluating August And in SKUs Beginning here. that. channels, secrets to of we'll it No club then in to will

Andrew Paul Wolf

Got it.

X housekeeping, if Just can. I quick

pension the On ongoing kind cost running plan there an savings the through retirements, P&L? is of was

Thomas K. Pigott

get in stop. savings terms modest losses and of that amortization And the from those exit. will a administrative We costs of fees will

So modest benefit P&L going forward.

Operator

call any Ciesinski Mr. back in I like the don't I the questions Instructions] [Operator for concluding further to turn would to see his comments. queue.

David Ciesinski

operator, thank for you, and everybody, today. Thanks, participating

in call, on the to out particularly industry up wanted of place of and all the focus I a wind about we discourse that's big taking Before about the food. make just America the Again emerging couple comments Healthy Make

state will and moments like this, really comply with tagline, important as better to ground first, all food facts food implies, our and And in ourselves and the on have federal always we believe we we company regulations. it's -- key

And matter, to assure of those the you attention anything are which under that ingredients, food our supply the chemical contain today any to ingredients business specialty receiving some today. manufacturers few competing scrutiny a focused retail else has historically concern or our for leading many of which degree in products are come then that want of I of niche in very categories, to and scrutiny. receiving restaurants that on As

big, as We we will to have restaurant in a relevant our our food culinary company meet R&D needs well which supply grow every team strong adapt continue the critical and confidence consumers that enable us consumer categories as in compete. industry-leading the and to to partners to

and keeping guys are So we the -- and that days, and are we want assure that we're these meet the relevant following just us strategy to of our needs times you serve that plotting I in a we're safe ensure the track all course, always interesting industry food to food stakeholders. this food of lot of of and

with have being in of the over you our where months you So a a few forward that guys our our today comments. and rest call results. to look We great hope QX go guys we ends day. We

Operator

for today's everyone, disconnect. you you Thank and participating in may now conference,

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