The Marzetti Company

Good morning. My name is Lauren, 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 2024 First Quarter Conference Call. Conducting today's call will be Dave Sosinski, President and CEO, and Tom Piggott, 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 would like to ask a question during this time, Simply press star 1-1 on your telephone keypad and questions will be taken in the order that they are received. If you'd like to withdraw your question, press star 1-1 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.

Good morning everyone and thank you for joining us today for Lancaster colonies fiscal year 2024 first 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 audio replay of this call will be archived and available at our company's website, LancasterColony.com, later this afternoon. For today's call, Dave Szczesinski, our President and CEO, will begin with the business update and highlights for the quarter. Tom Figgott, 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 Sosinski. Dave?

Thanks, Dale, and good morning, everyone. It's a pleasure to be here with you today as we review our first quarter results for fiscal year 2024. In our fiscal first quarter, which ended September 30th, Consolidated net sales increased 8.5% to a first quarter record $462 million, while gross profit increased 9.8% to $108.7 million. As a reminder, last year's first quarter sales were unfavorably impacted by an estimated $25 million in net sales that had shifted into the quarter end of June 30, 2022, in advance of our ERP go-live. the lower sales reduced last year's Q1 gross profit by an estimated $5 million. In our retail segment, net sales growth of 8.5% was led by continued strong performance of our successful program for licensed sauces and dressings, and another solid quarter for our New York Bakery frozen garlic bread products. Excluding the impact of the sales shift that reduced retail sales in the prior quarter, Retail segment sales volume measured in pound shift increased 1.4%. Sir Connor retail scanner data showed our licensed sauce products continue to perform very well during the quarter as Chick-fil-A sauces were up 17.6% to 41.4 million. Olive Garden dressings were up 9.6% to 39 million and Buffalo Wild Wing sauces were up 25.9% to 20.8 million. Our category-leading New York Bakery and Sister Schubert brands also increased their market share during the quarter. New York Bakery's leading share of the frozen garlic bread category grew 400 basis points to 44.3%, while Sister Schubert's share of the frozen dinner roll category increased 80 basis points to 54.1%. I'm also happy to report that Chick-fil-A refrigerated salad dressings, which we launched nationally last May, are also performing well with 10 million in retailer sales during the quarter. When combined with our Marsetti brand, our refrigerated dressing sales have grown to represent a category-leading share of 28.3%. In the food service segment, net sales grew 8.4% on increased demand from many of our national chain accounts, in addition to solid sales growth for our branded food service products. Excluding the impact of the sales shift that reduced food service sales in the prior year quarter, food service segment sales volumes advanced 1.4%. We are pleased to report our Q1 gross profit increased 9.7 million or 9.8%. Our Q1 gross profit margin of 23.6% reflects a sequential improvement of 310 basis points over the prior quarter. as we move past some of the temporary costs associated with strategic investments in increased capacity at our facility in Horse Cave, Kentucky, and our new ERP network. Our focus on supply chain productivity, value engineering, and revenue management remain core to further improving our financial performance. I'll now turn the call over to Tom Piggott, our CFO, for his commentary on our first quarter results.