The Hain Celestial Group, Inc.

Greetings and welcome to the Haines Celestial Group fourth quarter fiscal year 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alexis Tessier, Investor Relations for Haines Celestial Group. Thank you. You may begin.

Good morning, and thank you for joining us on Hanes Celestial's fourth quarter fiscal year 2023 earnings conference call. On the call today are Wendy Davidson, President and Chief Executive Officer, and Chris Belairs, Executive Vice President and Chief Financial Officer. During the course of this call, we may make forward-looking statements within the meanings of federal securities laws. These include expectations and assumptions regarding the company's future operations and financial performance. These statements are based on our current expectations and involve risks and uncertainties that could cause actual results to differ materially from our expectations. Please refer to our annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed from time to time with the Securities and Exchange Commission, as well as the press release issued this morning for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statement made today. We have also prepared a presentation, inclusive of additional supplemental financial information, which is posted on our website at haine.com under the investor's heading. Please note that remarks today will focus on non-GAAP or adjusted financial measures. Reconciliations of GAAP results to non-GAAP financial measures are available in the earnings release and the slide presentation accompanying this call. This call is being webcast and an archive will be made available on the website. And now I'd like to turn the call over to Wendy.

Thank you, Alexis, and good morning, everyone. We appreciate you joining the call today. I'll start today's call by reviewing our fourth quarter results before discussing the steps we're taking to transform our business and the progress we're already seeing on the journey to return the company to sustainable, profitable growth. Then Chris will review our financial results in more detail, along with our outlook for fiscal 2024, before I offer some closing remarks. I'm pleased to report that we achieved fourth quarter results which were near the high end of our expectations. Adjusted net sales on a constant currency basis were down slightly, 1.5% year over year, consistent with our guidance. An adjusted EBITDA on a constant currency basis was 43.5 million at the high end of our guidance. As expected, the net sales decline in the fourth quarter was driven by the North American segment where a large customer promotion for snacks in the prior year period was not repeated and by some softness in personal care. There were several bright spots in our results stemming from strategic actions we began taking in the third quarter for both our North American and international businesses. In North America, we are seeing bright spots in key snack and beverage brands with Garden Veggie Snacks and Celestial Seasonings Bagged Tea both returning to growth after a challenging third quarter. Garden Veggie Snacks grew dollar sales by 4% in the 12 weeks ended July 16th on 14% growth in TDP, and Celestial Seasoning's Bagged Tea grew dollar sales by 2% on 7% growth in TDP. Additionally, Greek God's Yogurt continued its standout performance, growing dollar sales 12% on a 20% increase in velocity, and our Earth's Best Baby and Kids grew dollar sales 20%, excluding formula, on 19% TDP growth, in part due to Earth's Best Snacks innovation launched earlier this year. Formula continues to be a challenge driven by industry-wide supply shortages. In the international segment, we continued the momentum from the third quarter to achieve another quarter of adjusted net sales growth. The growth was driven by the UK, led by meal prep, formerly called pantry, particularly in private label where we have a meaningful presence, as well as by snacks. We were also encouraged to see sequential improvement in meat-free with our private label growing 9% in the quarter and gaining share as the category continues to show signs of stabilization. Strength in the UK was only partially offset by softness in the non-dairy beverage business in continental Europe. While non-dairy beverages were down year over year for the fourth quarter as a whole, we are encouraged by sequential improvement we've seen throughout the year, especially in our strong private label segment and by growth in both June and July. The recovery in non-dairy beverage is largely led by private label and appears to be gaining positive momentum. As a category leader in both branded and non-dairy private label, we believe our portfolio is well positioned to benefit from this development. During the quarter, we delivered improvements in gross margin across the business through both pricing and productivity initiatives, including the consolidation of our meat-free manufacturing footprint. As we expect continued moderation in the inflationary environment in fiscal 24, so still above normal levels, we see further opportunity to improve growth margin. We also made progress on our debt levels in the quarter, paying down $28 million in debt. Debt repayment coupled with reinvesting in strategic business capabilities remains a top priority for free cash flow. Overall, we are pleased with the stabilization of many of our core categories as we finish the year. As you know, we've been undertaking a significant review of our company strategy and reimagining our business in order to realize our full potential and return Hayne to consistent, profitable growth. We've begun taking meaningful steps to simplify our business and set the foundation for our transformation by focusing on enhancing our capabilities, optimizing our organization, strengthening our end-to-end supply chain, improving our productivity pipeline, optimizing our route to market, and fueling our brand-building initiatives. Early actions are bearing fruit, reinforcing our confidence in our strategy and future growth potential. Let me share a few examples. We spoke last quarter about our efforts to enhance our capabilities and expand into margin-accretive channels, such as immediate consumption and away from home. We believe there is a significant opportunity for our brands outside of traditional retail in on-the-go consumption occasions within C-stores, airports, offices, and universities, amongst others. These immediate consumption channels drive brand reach and visibility and are both price and margin accretive as shoppers are willing to pay more for convenience. Our portfolio is well positioned to take share in this channel, particularly our snacks and tea brands. Hot tea is one of the fastest growing beverages in food service, and we are seeing consumers adding to their morning and evening routines with snacking occasions away from home. Morning and evening snacking occasions are up 3% versus a year ago. We are enhancing our away-from-home capability and our go-to-market strategy as it requires a very unique sales process and a distinctive and focused sales model, different than that used for traditional retail channels. While a new focus for Haynes, this is a channel in which I have in-depth experience, and I'm pleased that we are already seeing progress against this effort. with C-Store sales growing double digits in the 12 weeks into July 16th. Additionally, we are building out our revenue growth management capability to drive effectiveness and efficiency in price realization, brand building, and in-market share growth. For example, we recently executed a successful SKU rationalization initiative within our international segment, which streamlined a brand's offering by nearly half. These efforts resulted in a highly productive core which is now seeing double-digit growth and increased velocity, a win for both Hain and our retail partners. Furthermore, e-commerce continues to be a focus with increased support and optimization on marketplaces and retailer.com with updated content, expanded assortment, improved media efficiency, and increased spend on key brands. Garden veggie snacks, earth's best, and celestial seasonings are all growing consumption with double-digit increases in traffic online. We continue to focus on refining our operating model so that it is future fit to drive effectiveness and efficiency, supported by global centers of excellence. Earlier this month, we announced our new global headquarters in Hoboken, New Jersey. The space and location were thoughtfully selected to meet the evolving needs of our business. At nearly half the size of our footprint in lake success, our new headquarter will serve as the anchor to our hub and spoke flexible working model where teams will come together to collaborate at significantly less cost than our prior location. This approach aligns to our purpose of inspiring healthier living and serves as a competitive advantage in attracting and retaining top talent, regardless of where they are located. The headquarter will also serve as the home of Haines Innovation Experience Center, where team members, customers, and consumers will be able to immerse themselves in our products, explore consumer insights, and create innovative opportunities for the future. Our centers of excellence are designed to leverage global scale where appropriate and nimbly execute locally for impact. Our first global center, which we announced earlier this year, was for supply chain. Through this COE, we have simplified our end-to-end planning and enhanced our productivity pipeline process, generating $34 million in productivity in the back half of fiscal 23. When coupled with pricing, This has allowed us to offset record levels of inflation while maintaining average on-shelf availability fill rates ahead of the industry over the course of the fiscal year. We are in the process of establishing additional global centers of excellence in areas such as innovation, brand building, talent management, and technology. Our baby and kids businesses in North America and international have begun collaborating to share consumer and category insights, brand strategy, innovation, and creative assets across the Ellis Kitchen and Earth's Best brands. This facilitated the launch of Earth's Best crunchy sticks in the U.S., which are similar to the best-selling Ellis Kitchen melty sticks in the U.K. This partnered innovation over-delivered expectations at launch, helping to deliver strong growth in Earth's Best snacks in the quarter, with expanded distribution and support in fiscal 24. Our strategic reinvestment in marketing and brand building is also beginning to yield positive results. As you may recall, the supply chain challenges we faced in fiscal 22 led to a temporary pullback in marketing efforts, which negatively impacted sales in fiscal 23. In quarter three, we began taking action and reinstated brand support and are encouraged by the positive momentum as a result. In the fourth quarter, we saw marked improvement in Celestial Seasonings Tea, due in part to the Magic in Your Mug campaign that we activated in fiscal quarter three. Celestial Bag Tea grew 2.3% in the latest 12 weeks, while the category posted a mild decline, resulting in Celestial gaining share. Tea also benefited from our work as a category captain with a large retail partner on the optimization of assortment and shelf set. Furthermore, we are seeing encouraging early results from Peppermint K-Cups and Sleepy Time with Melatonin Both new tea innovations supported by strong customer programming this summer. Also launching in the third quarter was our Earth's Best Good Food Made Fun campaign, which helped to drive Earth's Best Snacks growth of 8% on 18% growth in TDPs in the latest 12 weeks. We have programming in place with our key retail partners, focusing on 360 activation, including retail media, in-store events, digital coupons, and retailer website engagement. We will continue to deliver good food made fun across all consumer touch points in fiscal 24, including new packaging, website and public relations and social media. In the fourth quarter, we launched our Crazy Delicious Vegetables media campaign for TerraChips. The early results show campaign effectiveness, brand awareness and purchasing intent all surpassing industry benchmarks. The early success we are seeing across these areas of focus gives us confidence that we have the right comprehensive plan in place to build our brands and return the business to growth in fiscal 24. We view fiscal 24 as an inflection point, a year during which we will reset our foundation and pivot to growth. Consistent with what I shared on the last call, we plan to make brand building investments across key brands to drive growth while also optimizing the effectiveness of our marketing dollars to work harder. We will begin to make investments to enhance our away-from-home and e-commerce capabilities, two channels which we expect will provide meaningful growth in the future. Before I hand the call over to Chris to share the financial details, I want to thank the entire Hang team for their commitment to our purpose of inspiring healthier living through better-for-you purpose-driven brands. I recently completed my first seven months of visits to see all of our global sites, including manufacturing, distribution, and offices across the U.S., Europe, and Canada, which left me energized by our capabilities and our team's passion. I am encouraged by our potential to leverage our reach and scale to deliver sustainable and profitable growth as the leading Better For You branded enterprise. With that, I'll turn it over to Chris.