Lancaster Colony Corporation

Good morning. My name is Kathy, and I'll be your conference call facilitator today. At this time, I would like to welcome everyone in the Lancaster Colony Corporation Fiscal Year 2025 Third Quarter Conference Call. Conducting today's call will be Dave Sosinski, President and CEO, and Tom Pickett, CFO. All lines have been placed on mute to prevent any background noise. After the speakers have completed their prepared remarks, There will be a question and answer period. If you'd like to ask a question during this time, simply press star 11 on your telephone keypad. If you'd like to withdraw your question, press star 11 again. Thank you. And now to begin the conference call, here is Dale Gnabczyk, Vice President of Corporate Finance and Investor Relations for Lancaster Colony Corporation. Please go ahead.

Good morning, everyone, and thank you for joining us today for Lancaster County's fiscal year 2025 third quarter conference call. Our discussion this morning may include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, and the company undertakes no obligation to update these statements based upon subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. Also note that the auto-replay of this call will be archived and available at our company's website, LancasterColony.com, later this afternoon. For today's call, Dave Sposinski, our President and CEO, will begin with a business update and highlights for the quarter. Tom Piggott, our CFO, will then provide an overview of the financial results. Dave will then share some comments regarding our current strategy and outlook. At the conclusion of our prepared remarks, we'll be happy to respond to any of your questions. Once again, we appreciate your participation this morning. I'll now turn the call over to Lancaster Colony's President and CEO, Dave Szczesinski. Dave? Thanks, Dale, and good morning, everyone.

It's a pleasure to be here with you today as we review our third quarter results for fiscal year 2025. In our fiscal third quarter, which ended March 31st, consolidated net sales declined 2.9% to $458 million. Despite the lower sales, we are pleased to report third quarter records for both gross profit, which reached $106 million, and operating income, which grew to $50 million. In our retail segment, net sales decreased 2.6%. Excluding the perimeter of the store bakery lines we exited in March of 2024, retail sales decreased 0.7%. This decline also reflects the shift of some sales into our fiscal fourth quarter due to the later Easter holiday, along with the more challenging consumer environment that resulted in softer demand. Despite these headwinds, our retail segments licensing program remains a source of growth in the quarter, as we began shipping Chick-fil-A sauce into the Club Channel, and our Texas Roadhouse dinner rolls continue to perform very well. Net sales for our category-leading New York Bakery frozen garlic bread products also grew in the period. Socona scanner data for the quarter ending March 31st showed solid performance for several of our licensed items and our core brands. In the frozen dinner roll category, our own Sister Schubert's brand and our licensed Texas Roadhouse brand combined to grow 11.6%, resulting in a market share increase of 520 basis points to a category leading 60.9%. In the frozen garlic bread category, our New York bakery brand grew sales 6.8%, adding 180 basis points of market share for a category leading share of 43.9%. In the produce dressing category, sales of Chick-fil-A dressings grew 4%. When combined with our Marsetti brand dressings, our share totaled a category leading 27.2%. In the shelf-stable sauces and condiments category, sales of Chick-fil-A sauces grew 2.3%, while Buffalo Wild Wings sauces gained 1.2%. Both sauces picked up market share as sales for the entire category grew only 10 basis points. In the food service segment, net sales declined 3.2%, driven by weather and industry-wide declines in restaurant traffic and the impact of menu changes as some customers shifted to value offerings. Finally, we are pleased to report record third quarter gross profit of $106 million. When compared to last year's third quarter, gross profit margin improved 90 basis points to 23.1%. Our focus on supply chain productivity, value engineering, and revenue management all remain core elements to further improve our margins and financial performance. I'll now turn the call over to Tom Piggott, our CFO, for his commentary on our third quarter results. Tom?