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spk06: Welcome to the Post Holdings Fourth Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2 so others can hear your questions clearly We ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Daniel O'Rourke, investor relations for Post. Please go ahead.
spk09: Good morning. Thank you for joining us today for Post's fourth quarter fiscal 2024 earnings call. I'm joined this morning by Rob Vitale, our president and CEO. Jeff Zadix, our COO, and Matt Maynor, our CFO and treasurer. Rob, Jeff, and Matt will make prepared remarks, and afterwards, we'll answer your questions. The press release that supports these remarks is posted on both the investors and the SEC filings portions of our website, and it's also available on the SEC's website. As a reminder, this call is being recorded, and an audio replay will be available on our website at postholdings.com. Before we continue, I would like to remind you that this call will contain forward-looking statements, which are subject to risks and uncertainties that should be carefully considered by investors, as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. This call will discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Rob.
spk07: Thank you, Daniel. Good morning, everyone. We finished fiscal 24 with a strong fourth quarter and are proud of the results for the full year. The last two years have seen a step change in adjusted EBITDA, growing by 45%. Roughly half of this resulted from organic growth and half from the pet acquisition's contribution. In addition, we converted this growth into strong free cash flow, generating approximately $1 billion over the past two years. In FY24, pricing caught up to input costs. We made continued improvement in our manufacturing supply chains and sustained a remarkable start for our pet business at over 2x our acquisition case. Meanwhile, our diversified portfolio price points and value-added product offerings continue to provide volume offsets to a challenging consumer backdrop. We are now in an attractive position to return to algorithmic growth with a high degree of optionality provided by our capital structure. Between the profit growth and cash flow generation I highlighted, we have reduced net leverage by more than a full turn over the last two years. In FY25, we expect a more normalized operating environment. Inflation has leveled but has not receded. Consumers, and therefore volumes, remain under pressure. We believe the degree of category declines we experience in FY24 will ebb, with the recent serial category performance as a good reference point. From a capital allocation standpoint, we continue to evaluate M&A opportunities. And while I have lately described our pipeline as very deep, we remain extremely disciplined with respect to valuation. If the right opportunity, fairly priced, presents itself, we're well positioned to react. Meanwhile, competitive uses of capital are always available. Sometimes overlooked is the option value created by the refinancings we executed in FY24. They added significant runway to our maturity ladder and increased liquidity, providing for more opportunities for aggressive capital allocation. Finally, I would like to thank all our employees for a very successful 2024. The strength of our operating model, our diverse product offering, and our exceptional management team continue to give me a great deal of confidence in our 2025 plan. And lastly, before turning over to Jeff, I want to congratulate Matt on his promotion that we announced in yesterday's press release. Jeff.
spk04: Thanks, Rob, and good morning. PCB closed out an exceptional year with a very strong Q4 as both grocery and pet grew their relative profit contributions versus prior year. Major drivers were annualized pricing, strong sustained performance in cost and manufacturing, and growth from our value product offerings, more than offsetting lower serial category volumes and higher advertising spend. Within cereal, we saw the rate of category decline slow to 2.6%, which is in line with the pre-COVID historical trend. Our branded portfolio outperformed the category, and private label continued to grow, which, given our private label share, accrued to our benefit. Pet consumption volumes were down roughly 2% versus a flat category, driven by reduced distribution points for Nutrish and some price elasticity in gravy trains. Our overall share remained relatively flat, with our premium brands continuing to show sequential stabilization, which was a key priority coming out of the acquisition. As we move into fiscal 2025, we shift our attention from stabilizing to strengthening our premium brands, led by our new Trish relaunch that kicks off at the beginning of the calendar year. We completed the closure of our Lancaster cereal plant on time and on budget. While this improves our capacity utilization within serial, we will continue to evaluate our network for further optimization. At the start of November, we exited the Smucker's TSA and moved the pet business onto our own systems. While too soon to declare victory, the cutover thus far has been without significant disruption. Moving to food service, we delivered a very strong quarter, overcoming challenges from our HPAI-driven supply constraints, a pullback in restaurant foot traffic, and continued challenges in our shake co-manufacturing startup. Overall volumes were up 3.6%, led by distribution gains in both eggs and potatoes. Our highest margin precooked egg products led the way, up 7.5%. While, as expected, Q4 adjusted EBITDA trailed prior year given the significant HPAI pricing benefit in fiscal 2023, it did outperform the expectations we set on our last call. The drivers of this outperformance were twofold. First was stronger than expected mix. Second was our ability to utilize our egg inventory to better match the cost impacts of our HPAI supply imbalance with our pricing adders. As expected, our refrigerator retail business had sequential improvement in Q4 as we course-corrected the trade issues experienced in Q3. We saw year-over-year volume growth of 6% within our side dishes, despite less support from our recalibrated trade spend. Strong manufacturing, supply chain, and cost control continued to support this business. Lastly, at Weetabix, UK cereal category volumes pulled back to down 2% for the quarter, with our branded biscuits down 3%. as we lapped heavier promotion last year, and we focused on inventory build for our Q1 ERP conversion this year. We are now live on our new ERP, and the early read indicates it is progressing as planned. From a macro environment standpoint, we are seeing some green shoots in the U.K. as inflation levels off and consumer confidence improves. While this is encouraging, our path to margin recovery continues to be the multi-year execution of cost-out opportunities identified during fiscal year 2024. With that, I'll turn the call over to Matt.
spk00: Thanks, Jeff, and good morning, everyone. Fourth quarter consolidated net sales were $2 billion and adjusted EBITDA was $349 million. Net sales increased 3% driven by acquisitions. Excluding acquisitions, sales were flat as lower overall volumes in our retail businesses were offset by volume growth and favorable mix shift in food service. SG&A increased in the quarter primarily due to targeted marketing investments in our retail businesses. Excluding the benefit of perfection pet food acquisition, post-consumer brands net sales decreased 3% and volumes decreased 6%. Average net pricing increased 3% and volumes declined mainly due to Smucker's Q1 repatriation of pet food we manufactured for them. Segment-adjusted EBITDA increased 2% versus prior years. We benefited from the contribution of Perfection Pet, improved branded cereal performance, and strong manufacturing and supply chain cost performance for both grocery and pet. Food service net sales increased 5% and volumes increased 4%. Revenue reflects favorable volumes and mixed shift to higher value-added products. Volumes reflect distribution gains in both egg and potato products. Adjusted EBITDA decreased 8% as we saw elevated egg costs ahead of pricing in the current year and lapped AB influenza price benefits in the prior year. These headwinds were partially offset by favorable mixed shift to higher margin precooked eggs. Refrigerated retail net sales decreased 3% while volumes increased 1%. Favorable side dish and sausage volumes were offset by distribution losses in egg and cheese products. Segment-adjusted EBITDA increased 3%, driven primarily by manufacturing cost control. Weedabix net sales increased 4% year-over-year. Sales benefited from the D-side acquisition and a foreign currency tailwind of 270 basis points from a stronger British pound. On a currency and acquisition neutral basis, net sales decreased 4% and volumes decreased 7%, driven by the decline in non-biscuit products. Segment adjusted EBITDA increased 30% versus prior year, led by lower advertising and trade spend in the current year. Turning to cash flow, we had another strong quarter, generating $235 million from operations and approximately $100 million in free cash flow net of CapEx spend. For the fiscal year, we generated approximately $500 million in free cash flow net of elevated CapEx behind key investments in serial network optimization, pet food safety, capacity, and R&D, plus food service investments for the expansion of precooked and cage-free capacity. In addition, we repurchased 400,000 shares in Q4 at an average price of $107.48 per share, bringing our fiscal year total to approximately 3 million shares at an average price of approximately $102. From a debt management standpoint, we acted on what turned out to be a temporary pullback in interest rates and issued $1.8 billion in debt. This added cash to our balance sheet and pushed out our 2028 bond maturity to 2034 while maintaining our net leverage at 4.3 times. Before we get to Q&A, I have a few comments on our fiscal 2025 guidance. As stated in our earnings release last night, we expect FY25 adjusted EBITDA to be in the range of $1.41 billion to $1.46 billion. On a consolidated basis, we expect our quarterly adjusted EBITDA cadence to be balanced across the year, with offsetting variations between our segments. Finally, our CapEx guidance of $380 to $420 million remains elevated as we continue to spend on the same key investments within PCB and food service that we started in FY24. Most of these investments will complete in FY25. However, there will be some tail into 26. Thank you for joining us today, and I will now turn the call back over to the operator.
spk06: Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question will come from Andrew Lazar with Barclays. Please go ahead.
spk01: Great. Good morning. Thanks for the question. Rob, obviously, I know Post's focus is more on EBITDA and capital allocation and not top-line growth for top-line growth's sake. But I know that other than in food service this past quarter, the top-line declined in all the other segments. And I realize there are different reasons in each case, some of which are the TSA shift over or maybe declines in some lower-margin businesses. I guess my question is, at what point do maybe some of the declines start to be, you know, more of a concern in that ultimately, right, the top line enables continued EBITDA growth once, you know, much of the margin opportunity is sort of leveraged?
spk07: Sure. I don't think there's any argument we can't shrink our business to prosperity. But what we do aggressively do is manage out lower margin business and not worry about that volume reduction. Meanwhile, and I'm really focused primarily on cereal in this response because food service volumes have some volatility but have a pretty good, strong upward momentum. On cereal, we have a more flexible footprint having purchased most of our plants, and as a result, we have miles to go with respect to optimizing the network. We believe at the same time that the trends will start to come back to closer to flattish over time. But the point by which it becomes an issue is when the plants become deleveraged and we no longer have the ability to shrink capacity. We're quite a ways from that because of the way we compiled the portfolio of businesses.
spk01: Great. That's really helpful. I guess second, the large private label player earlier this week saw private label volume in their categories decline in the mass channel in the third quarter and I'm just wondering if you've seen something like this in private label in your categories. And, you know, so I guess it's the age old question, you know, what's your latest thoughts on sort of where where the volume is going at this stage? Because I'm sort of running out of options around or excuses, you know, on where on where it's going. And it's still a bit of a puzzle to me. Thanks so much.
spk07: We have not seen any erosion in our categories in terms of private label penetration. So it's as I think it was Jeff who mentioned that we've seen some growth in private label and serial, and the same is true of 8th Avenue. So I think it's very much a category-by-category question. In terms of volume, I think that with the thing settling down post-election with the inflation settling down a bit, that we will start to see a reversion to norm, and then we will be able to stop guessing.
spk01: Great. Thanks so much.
spk07: Thank you.
spk06: Thank you. Our next question will come from Ken Goldman with J.P. Morgan. Please go ahead.
spk10: Hi. Good morning, and thank you. Hi. Just wanted to start by asking on eggs. Obviously, the you know, the market price has been volatile. I know that doesn't really tell your story, but just in an HPAI type world, you know, what are your latest thoughts on your need to take some price, your ability to take some price? I know you've talked in the past about how you've taken price and, you know, the underlying egg went down. And so I just wanted to kind of get the, you know, your latest thoughts there on that situation, just given some of the volatility we're seeing, again, just in market prices.
spk07: Well, in general, we're less susceptible to the volatility than our Sheldag compatriots because of our value-added offering. But we obviously do face some cost pressures, and when they occur, we are generally in a position of either taking pricing or allocating to customers, and we leave that to their discretion. While we are not immune from the effect of avian influenza, we are mitigated in terms of our value-added pricing model, both on a pass-through basis and on a market basis.
spk10: Okay, and just shifting topics, as we think about the EBITDA range, just the upper and lower end, you know, besides the obvious factors of, you know, demand for your products and operational efficiency and so forth, just how do you think about the key factors that might bring your year toward that upper end, toward that lower end? Are there any kind of unique, you know, X factors, for lack of a better phrase, that you're thinking about in this year in particular?
spk07: We got ERP conversions occurring in a couple of locations. That adds a little bit of uncertainty. There's been some pressure on Bob Evans' side dishes that we need to pay attention to and bring growth back to. There are any number of areas where there's opportunities to build upon that guidance and threats to see the lower end. But one of the other, I think, aspects of our guidance is we ended the year quite strong. So if you look at the high end of our range, we're very comfortable with the algorithm on the low end. It's a little soft, but that's as much a function of where we ended rather than where we start.
spk10: Great. Thanks very much.
spk06: Thank you. Thank you. Our next question will come from Matt Smith with Stiefel. Please go ahead.
spk02: Hi. Good morning. Thank you for the question. I wanted to follow up on the fiscal 25 EBITDA question, and more specifically on the food service side. Last quarter, you talked about the run rate being around $105 million. Can you talk about the levers for growth on EBITDA for food service, specifically for the upcoming year? Again, you face a pretty tough comparison, so just understanding where you're starting from and your expectations for the business next year.
spk07: Well, the key drivers are foot traffic volume and QSRs, and secondly, mixed migration to greater value-added products. So between the two of those trends, we feel comfortable meeting our growth targets within food service. Now, on the other side of the ledger, AI is just an uncertainty. And as we just talked about, AI is a pricing reaction rather than something we plan for.
spk02: Thanks, Rob. And maybe a follow-up. We haven't talked about the progress you're making on the aseptic shake manufacturing footprint there. How is the business running today? Is there still room for continued improvement in the output there?
spk07: There's a lot of room for continued improvement in the output. We are running. We are running at lower than our expected run rate. We expect to get to the run rate closer to the second half of FY25, which is a year later than we expected. We've had some challenges with equipment. We've had some challenges with lead times and receiving replacement parts, critical parts, in fact. And then, finally, we've had some labor issues that have all led to about a year delay in getting to the run rate we need to deliver.
spk02: Thanks, Rob. Appreciate the time. I'll pass it on.
spk06: Thank you. Our next question will come from Michael Lavery with Piper Sandler. Please go ahead.
spk03: Thank you. Good morning. You touched on how PET is exceeding, you know, more than kind of double your planned EBITDA. But with the perfection deal, I think you're also able to rearrange your geographical approach a little bit. Can you just give us a sense of what some of the savings or efficiencies there might look like and what the timing could be and how we should think about that coming through?
spk07: Well, I think ultimately we are still looking at the network that we've both acquired in the two acquisitions and that had been built by Smucker and trying to determine if we have the right geography. So there's network optimization work that will continue to be done. The perfection acquisition was in part an opportunity to gain some access to Western manufacturing and distribution, so it was a network opportunity. It was also an entry into Coman. We will likely shrink some of that Coman business and ultimately move some of our business out west as we determine what the optimal footprint is for delivering to our customers. So, we've embedded that in the FY25 guidance. I think additional benefit from that won't come until 26 when we complete that network optimization work.
spk03: Okay, that's really helpful. And just looking at Weedabix, those margins had some pretty significant pressure, you know, two years ago. You've clawed some of that back. What should we think in terms of kind of the runway for, you know, can you get back to the margins you had and how long might that take?
spk00: Yeah, so we're looking at that as a multi-year journey, and we've talked a little bit about work we've done to identify costs out and some opportunities to simplify the portfolio. That's a multi-journey or multi-year path. I'd say in the current year, we talked a little bit about ERP conversion, and when you think about sequential margin, certainly going to put a little pressure on what we saw in Q4 and Q1 and Q2, just given some of the disruption around how big of a conversion that is. But we'd expect in the back half of the year to kind of regain our momentum along that cost out. And again, we see that as probably a couple three-year path to get back towards our 30% level.
spk03: OK, great. Thanks so much.
spk06: Thank you. Our next question will come from David Palmer with Evercore ISI. Please go ahead.
spk10: Thanks. Just good morning. Just looking at the consumption data, if you were to look at cereal, pet, refrigerated, all were doing low single digit type consumption down in the last 12 weeks. So maybe consistent starting points. If you had to guess, Looking at your plans, your growth plans going through fiscal 25, what's the likelihood for each of those areas in terms of return to organic growth, and how do you plan that maybe playing out sequentially from here? Thanks.
spk07: Well, we tend to think of serial as in long-term sequential, very low single-digit decline, so between 0% and 1%. We've been a bit more bearish in our assumptions for 25, but longer term we think it gets to that range. And with some of our other categories, we expect it to be 0% to 2% growth.
spk10: And that's how you're thinking about it for fiscal 25 as well? Yeah. The other thing I wanted to ask you about was in food service, I was really bracing for impact to some degree on the top line because of what we've seen in Starbucks and Dunkin'. And it was really a rough quarter for those players. It's getting better with Dunkin'. It hasn't been getting better yet with Starbucks. I know those are big value-add type customers. I'm wondering how big of a variable is that in the year if we do see, for example, Starbucks get much better from here, and if QSR animal spirits pick up demand as a lot of people are anticipating, how much could that really help the margins and the run rate in that 105 per quarter type EBITDA?
spk07: Well, the benefit of that particular growth in the accounts that you named is that they tend to be more value-added products. So there's the benefit of volume, the benefit of absorption, and the benefit of mix. So to the extent there is, to use your term, animal spirits that show some vibrancy coming out of that, that benefits us meaningfully. You know, we do not plan on major changes in trends in the short term, so we tend to keep the trend intact and assume that that kind of opportunity is longer term. Great. Thank you. Thank you.
spk06: Thank you. Our next question will come from John Baumgartner with Mizuho. Please go ahead. Good morning. Thanks for the question.
spk05: Good morning. Rob, I wanted to come back to PET, and you're thinking in terms of future development as you assess the landscape, whether it's by price tier or across brands. You have some rebranding efforts now, I think, in your branded business. How much reinvestment are you willing to deploy to sort of drive growth or accelerate that business? And alternatively, how do you think about the value just sort of inherent in the manufacturing assets, being a best-in-class producer for private label or smaller brands, just Just your thoughts on relative returns on capital, the risks entailed, and sort of the relative rewards in pursuing each of those paths.
spk07: Well, in the short term, I think our greatest opportunity is to drive the existing portfolio that we have, make sure that we do a good job relaunching our premium brands. Those had suffered some neglect for a period of time, and they need some investment behind them. A meaningful amount of investment is already baked in the FY25 guidance. When you step back and go longer term, I think the, first of all, the answer to your question is that we certainly do look from an asset utilization perspective at other channels, whether there are opportunities in private label or contract manufacturing, whatever the case may be, and we're willing to use the assets appropriately. But we also may look at shrinking the assets if there are opportunities to be more, to have greater productivity and fewer plants. So I wouldn't presume one direction or another just yet. We look at growth in that area as both an opportunity to show some organic growth in the way we've talked about and then some inorganic growth because the category remains rich with opportunities. You saw one yesterday. There are others that are probably in a price point that make more sense for us, and we continue to evaluate those. So we certainly look at it as an opportunity for growth, both that we can drive ourselves and that we can acquire.
spk05: Okay. Okay. And then food service, you're sustaining some really good momentum still in value-added eggs. You referenced the distribution growth in potatoes. Can you discuss the fundamentals of potatoes a bit more? Just given the dislocations we're seeing within the frozen segment, the excess capacity, the deep value promotions at retail and the QSRs, how do you see some of these whipsaws in the industry, I guess, either accelerating or challenging marginal growth for the refrigerated segment? Are you seeing conversations sort of changing with operators? Is there newfound interest? How do you think that's the potato side of the business?
spk07: Well, I think it's a different category than the frozen business. So we tend to succeed by converting from fresh users to value-added users. And we see no pressure on that trend. So we continue to believe that both from a margin and a volume perspective, food service refrigerated potatoes are a growth segment. Where we are seeing some pressure is on the retail side, where all of the volume trends and some of the competitive dynamics are making it a bit more challenging. But on the food service side, we feel very comfortable with that trend.
spk10: Thanks, Rob. Mm-hmm.
spk06: Thank you. Our next question will come from Rob Dickerson with Jefferies. Please go ahead.
spk08: Great. Thanks so much. Good morning. Just first quick question, kind of simple. It's just, you know, I think you made the comment next year, you know, within the EBITDA guide for the year, you know, we should expect, you know, fairly kind of balanced EBITDA per quarter. But then you also made the comment that, you know, kind of hopefully, you know, you know, as we get through the year, kind of the volume pressure, right, kind of ebbs, right? Maybe the consumer gets a little bit better. You know, we kind of start to find a bottom, at least in some of these categories. So just simplistically, like kind of within the guide is the expectation that kind of hopefully maybe revenue growth gets a little bit better as we get through the year, but maybe EBITDA just kind of stays in a similar fashion. Is that fair? Yeah.
spk00: I think that's fair. I mean, again, I think Rob mentioned we're not really forecasting significant changes in current volume trajectories in our plan. So it's got some level of status quo in terms of that. But we do think as we get into the back half of the year into next year, again, some of this is transitory. And like we're seeing in cereal as an example, have seen that category come from being down 4% to 5% to normalize more like down 2% or so as of late. But we really don't have any significant lifts in terms of category changes in our guidance right now.
spk08: Okay, good. Fair enough. And then just secondly, on cereal, you made the comment earlier just now, it's just kind of around starting, I guess, to get less bad, right? The rate of decline is improving. Maybe just kind of unpack that a little bit, just maybe if you could just speak to kind of what you're seeing in With respect to competitive activity, are promotional levels stepping up or not really, just given maybe it is kind of more of a slight secular declining category? And I'm just also trying to understand, you know, kind of the profit opportunity, you know, in cereal, which is a big category for you that's also scaled, an attractive margin, you know, as we get through next year. Let's just say if it were to go back, right, even though you're not projecting it, let's say if it were to go back, you know, kind of to normalize, let's say flat to down one volume category. Like, is that, you know, a fairly attractive profit opportunity? Thank you.
spk00: Sure. Yes to the second point. If the category were to get to flat or have some level of slight growth, that would be meaningful to our business for sure. In terms of what we're seeing currently in the category, you know, competitors remain rational from a promotional standpoint. Obviously, as you can expect, we're hearing more from retailers around that. But I think as we think about that, if we, you know, for the end, any of that, it would be more, you know, get something in return in terms of shelf space or additional distribution. But right now, I'd say it's a pretty rational environment.
spk08: All right, super. I'll pass it on.
spk06: Thank you. Our next question will come from Mark Trinte with Wells Fargo. Please go ahead.
spk11: Hey, good morning. Thank you for the questions. First, Looking at your recent presentations, it appears you rebalanced some of the underlying drivers here at 3% to 4% EBITDA growth algorithm. Maybe could you help frame some of those changes there in the context of the longer-term outlook? And then with that, bridging to the 25 EBITDA guide, segments where you would expect to be above, below those long-term targets on the base, and then layering on any other puts or takes to call out.
spk00: Sure. So I think the updates we made in our prior presentation a year ago, I think we had more significant growth around PCB just given what we saw coming in PET. Obviously, we accelerated a lot of that growth and more than over-delivered what we expected. So we've recalibrated that at more like a 2% growth rate over time, driven by a category in PET that we see growth in and a serial category that we see flattening. and then cost out continue to be a driver when you think about network optimization in both. The food service, we updated to 5% in terms of the growth rate, and that's really in line with historical CAGR. And obviously, we are still working through our challenges on the Shake Coman startup, but Confident will get that in order, and that will provide some growth over the over the five-year horizon as well. Weedabix, I think we just updated a little loftier growth, but that's off a much lower base, as we've talked about, given the pullback and margin. And again, that's driven by cost out and simplification in the portfolio, and we have identified projects for that. The refrigerated is really the same. Again, driven by half that portfolio is sides. We've seen that in the past be high single digits. We think we'll get back to that. And the other half of the portfolio is more commodity exposed and flat combined gets you to the 5%. In terms of this fiscal year, I would say, you know, with the exception of Weetabix, like I said, that we think the ERP conversion is going to cause a drag year over year. So don't see them generating growth in relation to the algo. The other three, I think, definitely more in line with algo with some conservatism around, you know, nutritious reset within pet. We expect to cause, you know, potentially some disruption in the second half of the year as you think about changing over the shelf. And then we also have, obviously, the conversion from smugglers that we're live on right now. But, again, I think Rob talked about the higher side of our guidance is that combined algo, and then, you know, we've been a little more conservative given some of the ERP and nutrition reset in terms of the midpoint.
spk11: Okay, thank you. That's very helpful. And then on refrigerated retail, you called out some distribution losses and some lower margin products. Any more color on the impact there? How long will this cycle through? And will you look to backfill some of this or just continue to shift focus to more profitable areas of the business?
spk00: Sure. So that was in eggs and cheese. On the cheese side of things, we would lap that in Q2 of this fiscal year. Again, that's a business we continue to evaluate in terms of alternatives there. I think on the eggs side of things, we will lap that distribution loss in Q1. We've improved supply. I think the challenge there is avian influenza and egg prices in general are extremely elevated these days, which puts some pressure on that business. We've got supply in a better spot, so I think opportunities if we can get some, I'd say, more normal environment in terms of egg pricing.
spk06: Okay, I think I'll pass along. Thank you. At this time, we have reached the end of our Q&A session. This will also conclude today's post-holdings fourth quarter 2024 earnings conference call and webcast. Please disconnect your line at this time and have a wonderful day.
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