Operator: Hello and welcome to the Campbell's Company Q4 Fiscal 26 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' remarks, there will be a Q2uestion and answer session. As a reminder, this conference is being recorded. I will now turn the call over to Joshua Levine, Chief Investor Relations Officer. Mr. Levine, you may begin.

Joshua Levine: Good morning, and welcome to The Campbell's Company's fourth Q2uarter Fiscal 26 Earnings Question and Answer Session. Earlier this morning, the company published its earnings press release and slide presentation as well as both a written and audio recording of management's prepared remarks. All of these materials can be found on the I section of our website. Shortly after the conclusion of today's live Q and A session, we will post a transcript and audio replay of this call. Joining me today are Mick J. Beekhuizen, president and chief executive officer, and Todd E. Cunfer, our chief financial officer. During today's discussion, management may make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates and are subject to risks and uncertainties. Please refer to Slide 3 of our presentation, or our SEC filings for a discussion of factors that could cause actual results to differ materially. Management may also use non GAAP financial measures, which we believe provide useful information for investors. Non GAAP financial measures are not intended to be considered in isolation from or as a substitute for the financial information presented in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in the appendix of our earnings presentation. Finally, please note that this is the first Q2uarter following our acQ2uisition of a 49% interest in La Regina. Whose results are fully consolidated into 51% interest we do not own is reflected as earnings from noncontrolling interest. Campbell's financial statements prepared in accordance with GAAP also include certain fair value adjustments associated with the acQ2uisition, including for the deferred payment of the second tranche due on 05/04/2027, and for the option to acQ2uire remaining interests at a future date. These fair value adjustments will be excluded from our adjusted earnings. We will now open the call for Q2uestions. Operator?

Operator: Thank you. Star 1 on your telephone keypad. If you would like to withdraw your Q2uestion, simply press 1 again. Your first Q2uestion comes from Tom Palmer with JPMorgan. Your line is open.

Thomas Palmer: Good morning, and thanks for the Q2uestion. There was some helpful commentary in the prepared remarks about expectations for the first Q2uarter. Think some of your sales initiatives and cost savings plans ramp as the year progresses. Could you perhaps discuss expectations for organic sales growth and EPS growth as we move through the fiscal year? For instance, does the outlook sort of embed any sort of growth to close out the year at this point?

Mick J. Beekhuizen: Yeah. Absolutely. Tom, So let me first start off with net sales and then Todd, I will hand it over to you for EBIT. So on net sales, if we focus on the midpoint of the range, of the organic net sales range down about 3% For MMB, we expect MMB to be down slightly, and that is just fairly consistent throughout the year. Then with regard to Snacks, we are expecting that Q1 to be the low point and then we are assuming a modest improvement throughout the year. And that is really driven by innovation, flowing in, as well as the brand support that is flowing in throughout the year and some improved execution throughout.

Todd E. Cunfer: From a cost perspective, let's kinda go through some of the buckets in timing. From an inflation standpoint, right now, we believe the inflation hit is gonna be fairly consistent throughout the year, about +5% to 6%. As we talked about, logistics is going to be around double digits. That will get a little bit better at the end of the year as we lap some of the inflation that we already have embedded in Q4 of this year. Negative price realization we will have in Q1. As I mentioned in the prepared remarks, we are spending significantly on from a meal particularly from a meal's perspective, on innovation, some slotting fees and activation in Q1 which, you know, we are very excited about that innovation. And then we have some terrific holiday programming that will have some trade associated with it as well in Q1. But that is you know, we think that is gonna be fantastic. But that will put pressure on margins in the first Q2uarter. So we will have negative price realization in Q1, And then as the pricing action that we took at the end of the fiscal year starts to come aboard in and throughout the rest of the year, we will have some very positive Price realization again beginning in Q2. From a productivity and enterprise cost savings perspective, we got some great programming there. And lots of good things are gonna happen from a supply chain perspective, but they will build seQ2uentially as the year goes on. They will be more second half weighted. But we feel very confident that we are gonna be able to bring those cost savings to fruition. So from a gross margin perspective, it will be down significantly in Q1. Again, there is no pricing effect there is negative pricing in Q1 with all the inflation. that is already embedded in our plan. And then that gross margin will get much better in Q2, and then we anticipate we will actually be positive in the second half. Gross margin for the total year, probably down 50 to 100 basis points. But we will get seQ2uentially better as the year goes on. And from an EPS perspective, obviously, a fairly sharp decline in Q1. We will get to seQ2uentially better, and we think we will be positive EPS by the fourth Q2uarter.

Thomas Palmer: Great. Thank you for all that detail. I did want to follow-up on the planned price increases, that you would noted had been communicated to retailers already How did these discussions go? And what are your expectations around any distribution changes surrounding these adjustments? Thank you.

Mick J. Beekhuizen: Let me put it this way. Ongoing dialogue and the conversation is you know, appropriately constructive. With the retailer with where we are at.

Todd E. Cunfer: Yeah. And let me just give you a little bit of color on there. So we took a fairly modest price increase on about 60% of our portfolio. So on average, 4-5% price increase We think we have taken a prudent approach to what the elasticities are 1.5x. So that will have the way that math works, it will have a negative impact on net sales because of the volume impact. But obviously, nice impact on the bottom line. So again, as Mick pointed out, we have had very productive conversations with retailers I think we are very confident beginning in Q2 we will start to see some nice price realization come through the P and L.

Thomas Palmer: Thanks, guys.

Operator: Your next Q2uestion comes from Andrew Lazar with Barclays. Your line is open.

Andrew Lazar: Was hoping you could dive into the plan, $500 million in cost savings with a bit more detail on sort of what was already in play and where specifically the incremental actions are coming from and some of the timing around it?

Todd E. Cunfer: Sure. So $500 million program over the next 4 years, beginning this year, so fiscal year 2027 to fiscal year 2020. If you remember, we had a peak program of $375 million We were able to that was going through actually fiscal year 28. So through this fiscal year that we just ended we $225 million of that $3.75. So a $150 million of that peak savings that those plans are already in place, that will roll over into the new $500 million program. So $350 million of incremental savings that we have identified through fiscal year 2030. Some of it is the headcount reductions that we just announced this last Q2uarter. that is a piece of it The big new item that we are really excited about, there is we have a major procurement savings initiative for both direct and indirect spending, literally every line on the P and L will have a large action around to try to reduce cost. And then there will be some additional supply chain network optimizations that, Q2uite frankly, will take a little bit longer for it to come to fruition. But we will get between the headcount reductions and the procurement savings, we think, in the next this year and the next year, we will get significant savings.

Andrew Lazar: Okay. Thanks for that. And then you mentioned a bit of some pricing actions both incremental pricing and some price investments. Can you talk a little bit about just where some of the targeted pricing actions are and where some of the price investments are likely to come through. Thanks so much.

Todd E. Cunfer: So the pricing investments in Q1 are largely in the Meals business. Again, have some really exciting new innovation on the soup and sauces side that is just hitting the market right now. So there is, you know, unfortunately, the typical slotting fees that we have to pay to get that innovation in plus just the programming off-shelf programming that we are getting in Q1 The second piece that is hitting the pricing negative pricing piece in Q1 is some holiday programming for, again, for the meals business. We are going to have some terrific off shelf display. We think it is gonna really drive a lot of consumption and volume. So that is the consumption that is the Q1 price investment that we are making. And then from a pricing for the rest of the year, it is fairly broad-based. They are both around snacks and meals. Again, 60% of the portfolio we are touching. We are trying you know, we did a lot of great RGM work around where we thought we had the ability to take pricing with as little elasticity impact and profit impact as we possibly could make. So we feel good about where we are. But, again, it was around 60% of the portfolio on both pieces.

Mick J. Beekhuizen: And then maybe to add a little bit to that back, Todd, to your point around RGM and also trait with the buildup of the RGM capability, we have On the 1 hand, you hear us talk, Andrew, about the list pricing component, but on the other hand, also, as Todd also highlighted, the trade component. And within that, we have been very diligent about like what are the dollars that we are spending and are these dollars working hard for the consumer. So it is really coming back to making sure that we have the right price points at the right point in time And particularly on the snack side, we have done a lot of work over the past 6 months going through that. And although from a net perspective, it does not have per se it does not lead to a reduction in trade, but it is more about a reallocation of trade which I personally think is doing exactly the right thing. In order to make sure that we provide appropriate value in the marketplace.

Andrew Lazar: So much for that.

Operator: Thanks, Andrew. You are next. Question comes from Peter Galbo with Bank of America. Your line is open.

Peter Galbo: Taking the Q2uestion. Mick, maybe just to switch gears a little bit back to the Q2uarter itself. Pretty strong performance in Cooking Soups. I think you added a new metric to 1 of the slides, something like up 6% or 7% in terms of consumption. And obviously, that is being driven by broth. But maybe you can talk a little bit just more about the initiatives for fiscal 2027 as you think about the focus on cooking soups versus RTS and how we all might think about that over the next 12 months? Months?

Mick J. Beekhuizen: Yeah. Yep. So you are absolutely right. If you look at our overall soup portfolio, you are seeing that the cooking side of the portfolio is working really well and we still got some work to do on the eating side. Although, we are all over that. And you will see already some of the actions coming to fruition. From and you know, maybe to shortly touch on that within eating, it is in within the eating soups, it is some of the innovation that we have recently launched with Campbell's Nourish or the protein soups that are out there, I believe they are exactly connecting with what a lot consumers are looking for at a great value. And that is a good example of the great work that our teams are doing to really get closer to the consumer and translating that into relevant innovation and doing that fast. That being said, we got more work to do. On the eating soups. Premium is working. You saw that probably in my pre prepared remarks. It is Pacific continuing to grow double digits. We are going to obviously continue to lean into that. But I will call it, the mainstream RTS portfolio, in addition to the innovation that I just described. We have got more work to do and particularly in around a brand like Chunky. The team is working through that, so more to come in and around that part of the portfolio. Now back to the piece that is working really well and has been working well for a while, which is really cooking. And it is about half of our soup portfolio. it is on the 1 hand broth, as you are describing, but on the other hand, it is also condensed cooking. And condensed cooking has worked really well for a while. Now, we are going to continue to lean into that not only within the soup site. And you saw 1 of the slides that we included in there. If you really look at the Meals and Beverage portfolio, and you look at retail piece of that portfolio, little over 50% of our meals and beverages retail sales. Is exposed to cooking. And that has grown pretty consistently over past 4 years, call it at a CAGR of about 5%. When we are talking about that, we are really focused on semi-scratch. Which represents about 50% of all at home cooking occasions. And that is where that consistent growth is coming from. it is a behavior that the consumer is focused on. The consumer is seeking convenience and affordability, by cooking smarter. And this is an area where we have a right to win and something that we are leaning into with our portfolio. That is, on the 1 hand, soup as you just highlighted, with broth, condensed cooking, but then also brands like Rao's. Which is obviously, you know, a shining star of the meals and beverage portfolio and of the broader Campbell's portfolio. So what are we doing about it in order to make sure that we continue to expand the opportunity here. It is making sure that our marketing efforts are not only focused on the holiday period, but really starting to dabble more into everyday cooking, and that is back to that semi scratch piece that I just described. And by the way, semi-scratch means shorter prep, less than 30 minutes and less than 5 ingredients. Think about it. 5 ingredients or less. Think about it that way. Innovation is obviously the other space. So brand support innovation. With the innovation, a good example is condensed sauces. And then of course, we are going to continue to focus on supporting Rao's and continuing to grow the brand. So that gives you, hopefully, a little bit of additional context around our focus on empowering everyday cooking.

Peter Galbo: Great. Thanks for that, Mick. Helpful. And, Todd, maybe if I could switch to your commentary just around refinancing and capital allocation. Obviously, the dividend reset today Last Q2uarter, we had spoken about potential hybrid issuance that may come potentially at some point here. Again, today, you are talking about refinancing. So just want to understand in the context of the interest expense guidance being higher, your commentary today, how we might think about kind of the capital structure going forward? Thanks very much.

Todd E. Cunfer: Yes. Sure. So interest expense, we are projecting will be approximately $25 million higher year over year. it is really 2 components to that. Part of it is the La Regina acQ2uisition. They have their own debt their own interest, expense, which now we are starting to pick up, plus what we made first cash payment of about $140 million or so Obviously, we financed that with that And so there is an interest expense that will wrap around for a full year. Of FY 2027. The other piece is the anticipation We have a $500 million bond maturing in March. We are looking at options for refinancing that. As I talked about on the last call, we are strongly considering a hybrid. there is potential we would do that. That would come along with a higher coupon, obviously, but we would get 50% eQ2uity credit So more to come on that, but a hybrid is 1 of the considerations we have for a refinancing.

Peter Galbo: Thanks very much.

Operator: Your next Q2uestion comes from Peter Grom of UBS. Your line is open.

Peter Grom: So I just wanted to start on snacks. First, just as we think about the organic sales outlook, what is kind of embedded from a snack standpoint? You mentioned in response Tom's Q2uestion that Q1 is the low point. So just any guardrails, think about terms of where we start versus where you would expect to exit. What assumptions underpin the outlook. And I guess just bigger picture, you talked about taking the right steps to turn around performance. So if we were to fast forward 12 months from now, what does that look like?

Mick J. Beekhuizen: Yep. Okay. Let me get first big picture around the Snacks turnaround, and then Todd, I will hand it over to you to give a little bit more context around some of the numbers You know? underlying the guidance. So with regard to the Snacks turnaround, so first of all, I would say it all starts with the team. And we I am very excited about the leadership team that we have in place within Snacks. We have made various changes and put that team together over the past 6 to 9 months. The team is focused, and they are you know, great operators and have a lot of confidence in what they are focused on in order to make sure that we can deliver. Now the Q2uestion, what are they focused on? it is really back to 3 priorities. First of all, focusing on return to the core fundamentals. What does that mean? That is a good example of that is focus on the core consumer. And you have seen that work within Goldfish. Within Goldfish, we are focused on households with kids, and as you have seen in our Q4 results, we are seeing some encouraging trends within Goldfish. that is a good example of that focus on the core fundamentals The other piece within that I would add is brand support, making sure that we support our brands, that we support our brands in the marketplace, back to the campaign the national campaign for Goldfish, the snack that smiles back, as well as a national campaign for Pepperidge Farm that we are rolling out this year. And then on top of it, focused innovation. And just like what I talked about when I talked about meals and beverages, it is making sure that we are focused on bigger, better innovation. And a good example of that staying with Goldfish, is Goldfish better for you? And that is 1 of the innovations that is coming out. We have obviously announced it with Goldfish Gluten-Free. And we are very excited about that innovation coming in later this Q2uarter, early Q2. So that is 1, return to the core fundamentals. And second priority is really creating fuel to support our brands, which is coming back to 2 pieces. First of all, the costs Todd talked about that earlier, as well as making sure that we really utilize the RGM or revenue growth management capabilities that we are building out throughout the organization. And we gave some examples of that earlier. And then third of all, it is coming to everyday great execution. What I mean by that it is critical to make sure that the product is available on the shelf and the consumer wants to buy it. And there is a lot of focus on that throughout the organization, It obviously comes back to making sure that we produce the right product, so there is a very clear alignment between demand manufacturing but then, obviously, also making sure that we have appropriate DSD execution in order to get the product in the store and on the shelf. And that is obviously on our everyday products, but it is also with regards to, for instance, promotional activity And a good example of the progress that we are making there is Fresh Bakery if you look at the seQ2uential improvement that we have had in Q4 versus Q3. Now still more work to do on it, And as a result, we are highlighting that as a third focus area. So overall, I feel very good about the team. I feel very good about the actions that we are taking. And we are making progress. Goldfish is a good example, but there is obviously much more work to do And that is what we are working through this fiscal year. So with that, Todd, I will hand it over to you.

Todd E. Cunfer: Yeah. Give you a little more color. So look. To be very direct, Q1 is gonna be a very challenging Q2uarter for snacks. You are seeing the consumption trends They are not where they need to be right now. And then we have a couple of we have 2 points of headwind from a shipment perspective. 1 point is we ship ahead of consumption last Q2uarter for some holiday programming. That we have to lap. And then we have some trade investment that we have this year and we did not have last year. So it is, you know, high single digit down for Snacks in the first Q2uarter. Obviously, that ends up being a not very pretty p and l. So you have the sales decline. You have a pretty large fixed cost deleverage. Have a lot of inflation and logistics costs. In the first Q2uarter. So again, just be very direct, Q1 for Snacks is going to be very, very challenging. It will start to build back as we get to, in, you know, in the back Q2uarters. The top line will start to strengthen. It will still be down, but the volume declines will soften. The pricing will start to take hold in Q2 and for the remaining part of the year. And then there is a lot of cost savings that will start to kick in the sec primarily in the second half of the year. The key is, as kind of Mick has been pointing out, look, innovation is gonna be very key to recovery for the year. We have some terrific innovation on Goldfish and later in the year on Snyder's, which we are really excited about. And then from a brand activation standpoint, we will have some significant media campaigns on both Goldfish and Pepperidge, which we think are terrific. So, look, we have to get the margin structure back Mick mentioned RGM and the pricing. that is a huge part of it. Look. The 2 most profitable brands that we have in the portfolio, the snacks portfolio, are Goldfish and Snyder's. If we get those 2 starting to stabilize and eventually grow, there is a massive impact on the profitability of this business. I talked about the procurement savings, which will have a positive impact. Starting in the second half. Both the snacks and the meals portfolios. And then look, we have to get the plants. We are putting some capital in there. We have got to get the plants working. More efficiently. And we feel good that will take place over time. Quite frankly, the network optimization is going to take a little bit longer. Yes, we closed 2 chip plants here. Recently, so that is a positive impact on fixed cost. Absorption, but there is a lot more work to do there, and it is going to take time. Thanks.

Peter Grom: that is really helpful. And then, Todd, you know, just maybe a follow-up on zooming out. Right? it is a pretty dynamic external environment. You are you are implementing a lot of change across the organization. So how would you characterize the level of flexibility or cushion you have embedded in the guidance?

Todd E. Cunfer: Yeah. I would say, look, there is there is between the high end and the low end of the guide dollars 1.65 to 1.8 and also, Q2uite frankly, the top line, there is really 2 big variables. What is inflation in the second half We to give context, we are about 80% covered in the first half of our fiscal year. We are about 50% covered in the second half. So, again, we have assumed the inflation is fairly consistent in that +5% to 6% range across the Q2uarters. But if it gets better or worse, that obviously is gonna have an impact where we kind of fall within that EPS range. And the other 1 is the timing and the speed of the SNAC recovery. If that volume starts to come back a little bit better, obviously, that is gonna have a very, very positive impact on our top and bottom line. If it takes a little bit longer for it to recover, obviously, that gets you to the lower end. But those are the 2 big variables.

Peter Grom: Great. Thank you so much. I will pass it on.

Operator: Your next Q2uestion comes from David Palmer of Evercore ISI. Your line is open.

David Palmer: Thanks. Just a Q2uick follow-up and thanks for that commentary on Snacks. After the first Q2uarter, you talked about improvement partially based on pricing. Do you see consumption possibly getting to flat or better or maybe some growth? By the end of the year in the Snacks segment?

Mick J. Beekhuizen: We are not anticipating, David, we will get to positive around consumption. That being said, we are expecting that we are gonna make continued modest progress throughout the year. Great.

David Palmer: And 1 of the things you talked about in the prepared remarks is talking about sort of getting closer to consumer. And it looks like you are doing some things that are particularly with Goldfish that make a lot of sense. playing into your core, making sure the pricing is right, protein, whole grain, gluten free offerings. I am wondering, and it seems like that part of Snacks is more of a near in than maybe a more of a confident area that you feel like this is going to turn. Could you maybe share what some of the other insights are and other areas that you also see some improvement coming within Snacks beyond Goldfish? And I will pass it on.

Mick J. Beekhuizen: Yep. Yep. So you are right. And you see it in the numbers with regard to Goldfish I mentioned earlier the Q4 numbers. Are very encouraging. And I believe the team is doing the right thing Obviously, you know, as you are pointing out, still work to do. But we are on the right path. And given the right actions in place. We are replicating that across the broader snacks portfolio, and that is a little bit back to where I mentioned earlier, focus on those core fundamentals. Is really critical across the portfolio. A good example, for instance, on pretzels, is where you have seen the focus on the unflavored part of the portfolio has actually been bearing fruit. And you saw in this past Q2uarter that was partially driven by the America 250 implementation or activation in the marketplace that we actually saw encouraging trends within the unflavored pretzels. Now we still have work to do around the flavored part of that portfolio. Really focusing on what is the consumer looking for, what is the consumer want, and making sure that we are very clear about where do we have a right to win. Another good example of that is, for instance, within Snack Factory. Snack Factory, we were operating both in the deli aisle as well as in the salty aisle. Of the grocery store. And we are very focused on where is our core right to win, it is the deli aisle. So really bringing it back to that. Another good example of that is cookies. Cookies has been a little bit more volatile throughout the different Q2uarters. But if you step back and you look at the full year, you are actually seeing that overall cookies for the year were flat And that is really driven by an innovation playbook that the team has focused on and is executing on. And as a result, we have had great innovation with Milano white chocolate, We have had some great innovation with Chessmen. And we are going to continue to work through that. Also, because if you think about that cookie portfolio is still a relatively small business. So again, it is a good example of how we are going to be able to continue to win in each of these different areas. The 1 area that I would say is probably gonna take us a little bit more time, back to your point around kind of 'by when, what'-- is with regard to chips. I think chips, the team is doing some really good work in order to make sure that we are improving our competitive position. They are taking proactive actions. However, these actions are going to take a little bit of time to implement them in the marketplace. So when I step back we are making great progress. On Goldfish. We are all over Pepperidge Farm and turning that around, whether it is on the execution side on bakery or whether it is some of the exciting innovation in bakery as well as in cookies, and then on the salty side, it is gonna take a little bit longer particularly with regard to the chips. Trajectory that I just described. Hopefully, that gives you some additional context.

David Palmer: that is great. Thank you.

Operator: Thanks, David. Again, to ask a Q2uestion, it is star 1. We will ask that you please limit yourself to Q1uestion. Thank you. Your next Q2uestion comes from Steve Powers of Deutsche Bank. Your line is open.

Analyst: Great. Thanks. Can you hear me okay?

Mick J. Beekhuizen: Yeah. Hey, Steve.

Todd E. Cunfer: Hey, Steve.

Steve Powers: Perfect. Morning. Perfect. Sorry. some static on my line. I guess you know, let me if I only have 1 question, let me think about it this way. You talked about a lot of investments in consumer capabilities, revenue growth management, better forecasting, kind of stepping away from the immediate 27 needs. there is a lot of investments in forward looking capabilities that you are trying to build. And I guess if you had those 3 years ago, what decisions do you think you might have made differently, or what might you know, how might the outcomes that we are looking at today be different if you had the capabilities you are now trying to build looking backwards? Thanks.

Mick J. Beekhuizen: Yeah. Yep. 1, I think we would have been in a better place. And I personally believe we would have also been faster. So for me, the overall environment and the consumer has been evolving pretty Q2uickly. And it is important for us as an organization that we Q2uickly adjust accordingly. it is really 1 of the pieces we talk a lot about internally is rapidly turning these consumer insights into relevant food and brands. The better we are at that, the better we are at that individual brand level, the more relevant we are going to be in the marketplace, and the better we are going to be to perform because we are we are gonna make sure that we fulfill those consumer needs. And I think the team is doing a fantastic job at leaning into it and as you see with some of the examples, whether it was you know, the RTS example in Campbell's that I talked about earlier, the team very Q2uickly developed or whether it is condensed sauces, within Campbell's, there is some other great, highly relevant innovation or whether it is Goldfish better for you with the gluten free launch. So I feel those are great examples of already of us already being able to deliver based on the capabilities that we are building? Because I also do not wanna give you the sense that all of this is on the come. Right? If you look at the growth office, we started the growth office a year ago. We implemented that in order to make sure that we step up commercial capabilities at scale across the organization. We implemented that and we are starting to see the fruit of that labor coming through. RGM is a capability within the growth office that we have been investing in now for the past 6 to 9 months and we are already utilizing those capabilities in some of the things that we talked about earlier in the call. So long story short, I think we are on the right path. I think we are increasing the focus on the consumer throughout the organization, which I think is really important. As the consumer is evolving. But at the same time, we are also becoming better and better operators across the company.

Todd E. Cunfer: Yeah. I would just give just a little bit more on RGM and trade. Look. I think look. We are the bad news is we have been behind the curve in both you know, our capabilities, our tools, The good news is there is a lot of low hanging fruit that we can extract over the next couple of years. As we have mentioned before, we have we have just put a brand new team in They are going to be terrific. They have already done some great work. On not only helping, you know, list price increases, but starting to rework the trade budgets and spend them in a much more efficient way. So I am really excited and confident over the next couple of years we are gonna see some great returns from there. And, yeah, Mick mentioned speed. Look. We got this team together And when we said we gotta do some pricing actions, you know, within 6 weeks, we did the analysis and, you know, communicated to retailers historically we could have never done that within that short of a period of time. And so, there is we are still in early innings on this, but I am super, super excited about the capabilities that we are building. it is gonna create a lot of value for us.

Steve Powers: Great. Thanks to you both. I will pass it on.

Operator: Your next Q2uestion comes from Christopher Carey of Wells Fargo Securities. Your line is open.

Mick J. Beekhuizen: Hi, Christopher.

Todd E. Cunfer: Good morning. Hey, Christopher.

Christopher Carey: 1 clarification. And then I want to jump into a bigger Q2uestion. But just the improvement in the margin rate relative to fiscal Q1 as you get into fiscal Q2 and the rest of the year Will that be driven primarily by Snacks given the low starting point for Q1? And then margins get better from the Q1 starting point? Or will that happen in both divisions? So that is a kind of a clarification of the phasing Q2uestion, I suppose, at the beginning of the call and yes. The broader yeah. Sorry. Go ahead. Go ahead with that, and I will and then I will Yeah.

Todd E. Cunfer: Let me let me tackle that 1 first. So the Snacks margin recovery really will not happen until the second half. So as it starts to improve in Q2, it will be mostly on the meal side. But then both will kick in and benefit in the second half of the year.

Christopher Carey: Okay. Okay. The broader Q2uestion may lack a bit of distinctness, if that is a word. But you know, I am struck by there is this dynamic and your peer some of your peers are doing the same thing that there is been so much focus on improving volumes and in improving competitiveness and now in your outlook, perhaps reasonably so, you know, you have acknowledged that you just cannot, you know, do it anymore. And that you are gonna turn to positive pricing now, and it is actually gonna drive even worsening volumes. And, obviously, the macro backdrop has shifted a lot. So you know, I do not begrudge that decision. But, yeah, in a way, you know, what you are trying to accomplish now in the medium term if I look at the commentary, it is maybe you are you are planning a smaller snacking portfolio focused more on dollars and perhaps acknowledging that overly being overly focused on volume was perhaps not the right strategy given the margin degradation of the business. Just can you give us a sense of what the strategic shift now is that you are acknowledging that you have to start protecting the bottom line, and you are gonna be accepting that volumes will be yet worse again going into this year and the implications for what you are trying to accomplish over the next several years? Sorry. it is a big Q2uestion, but I am just struck by the strategy shift that you and your peers are underway, and I would I would be curious your thoughts Yeah.

Mick J. Beekhuizen: Yep. And maybe I will kick it off with a bigger picture, and then Todd will hand it to you around kind of the pricing and around kind of the dynamics within the p and l. I would say the key thing that, as I mentioned earlier, we were really focused on is making sure that we set ourselves as an organization up for success in the medium term because where we have been, those numbers are obviously not where we should be, and that is unacceptable. So for us, we believe that getting back to growth, it is actually really important to focus, as I mentioned earlier, on the consumer. You know, act with speed, then also execute really well. So those are 3 things that we are focused on across the organization. That being said, with our brands, we need to make sure that our brands are relevant. How do we do that? It is back to making sure that we support them in the marketplace, and every brand plays a role. Right, within our broader portfolio. With our big brands, we need to make sure that we support them and we grow them with rather you know, campaigns, like, for instance, Goldfish, where we are supporting Goldfish with a national campaign, but also brands like Rails, where we still, from an overall, call it, like awareness perspective, the awareness is still relatively low compared to take another brand in our portfolio, Prego. So and we have a big opportunity there to continue to grow rails. Whether it is within the sauce aisle or outside of the sauce aisle and you see the brand and the products that we have resonate with the consumer. We just need to continue to make sure that we support the brand. So hence, you will see that national campaign come through this coming year. Combined with a continued focus on innovation, and I talked already you know, about that before, but you see us really picking our spots throughout our portfolio on how are we going to continue to make sure that we deliver what the consumer is looking for or what we believe is the consumer need. So that is really the dialogue in the organization. that is what we are focused on. And we believe that over time will support growth for the broader organization. And you will see me highlight whether it is on the meals and beverage side certain areas, or certain other areas within snacks. That we obviously believe we are going to have a little bit disproportionate growth. So anyway, that is really kind of the approach that we are taking. Pricing I would see much more as called, like, short term action with regards to the broader p and l. Also, in service to what I just described, in order to be able to make sure that we continue to have healthy margins and that we can support our brands, that we can continue to invest in our brands, whether it is through marketing or continued innovation launches. So that is a little bit kind of how I describe the medium term versus call it, like some of the short term actions that we are taking in fiscal 27.

Todd E. Cunfer: Todd, do you have any other thoughts? Couple more thoughts, and, obviously, it is a really important Q2uestion you asked. Look. Pricing is not black and white. Pricing, there is no strategy where there is 1 size fits all. So we talked about what we are doing in the first Q2uarter specifically on the meals part of the business, where we are actually investing in price I. E, promotional activity, to and the result is we are getting great off shelf display during a really important holiday period. And again, using the RGM framework, that math that activity says you are gonna get terrific returns by actually, you know, lowering the price for an important period of time. But that does not work all the that does not work in every aspect on every time and on every brand and lowering TPRs and price on the shelf is often not effective. And we have seen look. We have seen from ourselves and our peers who have lowered price over the last year or 2 that the results have been kind of underwhelming. And so there are periods of time where, if the math works, we will invest in price because we get terrific volume and activity around it. But given the inflationary environment that we are seeing right now, we need to protect those margins. We need to take some, unfortunately, some pricing activities to make the math work on our p and l. So, again, there is not 1 size fits all, and we are gonna look at it from case to case.

Mick J. Beekhuizen: Yeah. And I think, Todd, maybe the final point is, like, as we have talked about, is offsetting that inflationary pressure price is only 1 of the measures that we are taking. I mean, Todd talked a lot about the cost savings the productivity initiatives. I think, you know, across the organization, the team is doing a phenomenal job. In order to make sure that we turn over, you know, every dollar that we spent in order to help offset some of those raw material price increases. Absolutely.

Christopher Carey: Thanks, guys. it is it is a big Q2uestion. I appreciate you taking the time. Thanks so much.

Operator: Your last Q2uestion will come from Robert Moskow with TD Cowen. Your line is open.

Robert Moskow: Thanks for the last Q2uestion. I wanted to know Todd and Mick, can you talk a little bit about how the Board's view on the dividend has evolved over the last 3 months? I mean, I think at that time, 3 months ago, it sounded like there was a commitment to it. But did something change in the last 3 months to make them reevaluate? And then lastly, I wanted to dig in a little bit on the elasticity assumption more to what Christopher was asking. it is like the new normal now in food is to have elasticity that goes beyond negative 1.0. Your volume is gonna be down mid single digit. And I want to know if big picture, is that a function of how you think consumers are going to react to the pricing Or are you also acknowledging that maybe Snacks, in particular, you are going to have some less shelf space a narrower product line some conscious volume contraction before you can grow. Thanks.

Mick J. Beekhuizen: Let me first start off with the dividend, then Todd can talk about the price. Let's start with the But the so as I mentioned also in my prepared remarks, I mean, reducing the dividend is obviously a difficult decision, but it is unfortunately a necessary decision. That we needed to take And I would say, you know, from my vantage point, very constructive dialogue with the board and the dialogue obviously is continuing to center around, hey, we need to do make sure that we do the right thing in order to create long term value for the shareholders.

Todd E. Cunfer: Yeah. Let's talk about the price. So last elasticity for a second here. You know, look. I agree with you. Typically, I have in my former life, I have seen more kind of 1-to-1 elasticity. You are starting to see higher elasticities. Could it be some of the pressure on the consumer? I am sure. Look. We have we have tried we have tried to be prudent in how we have built the elasticity assumptions We have largely assumed that there is no that we are, you know, people other competitors do not follow us. In lot of our categories, there is not necessarily a direct comparison, so it is a little bit tricky in some of our brands and categories. But we have largely assumed that, you know, not everybody across that category follows. So, look, if other people eventually take some price our elasticities could be a little bit better than we model, but we, you know, we wanna make sure that the price actions that we took and the assumptions that we build in the P and L give us a little bit of flex and we feel good about that assumption.

Robert Moskow: Thank you.

Operator: Thanks, Robert. Thank you. Thanks. Thank you. This concludes today's conference call. Thank you for joining. You may now disconnect.