Greetings. Welcome to Hain Celestial’s Fiscal Fourth Quarter 2024 Earnings Conference Call. At this time, all participants will be in listen-only mode. Question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. At this time, I’ll turn the conference over to Alexis Tessier, Investor Relations. Alexis, you may now begin.

Good morning, and thank you for joining us for a review of our fourth quarter results. I’m joined this morning by Wendy Davidson, our President and Chief Executive Officer; and Lee Boyce, our Chief Financial Officer. Slide 2 shows our forward-looking statements disclaimer. As you are aware, during the course of this call, we may make forward-looking statements within the meaning 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 SEC, as well as the press release issued this morning for a detailed discussion of the risks. We have also prepared a presentation inclusive of additional supplemental financial information, which is posted on our website at hain.com under the Investors heading. As we discuss our results today, unless noted as reported, our remarks will focus on non-GAAP or adjusted financial measures. Reconciliations of non-GAAP financial measures to GAAP results are available in the earnings release and the slide presentation accompanying the 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. I'll start by reviewing today's key messages, the progress we've made on our Hain Reimagined strategy and reasons to believe in our pivot to growth in fiscal 2025. I'll then turn the call over to Lee, who will provide additional detail on our fourth quarter and full year results and our outlook for the coming year. We'll close out the call with time for Q&A. Let me start by saying that I'm pleased that we delivered on our updated guidance with organic net sales growth ahead of our guidance and adjusted EBITDA at the upper end of our guidance and continued progress in adjusted gross margin expansion. And importantly, we exceeded our free cash flow expectations based on strong delivery from our fuel initiatives, especially in working capital, revenue growth management and operational efficiency. This enabled us to further pay down debt and improve our leverage position. Approximately 85% of our business grew in fiscal year ‘24 with organic net sales growth of plus 3% and we have initiatives in place to stabilize the remaining 15%. I believe we are well positioned as we head into fiscal year 2025 to pivot to growth. Building upon this solid foundation and momentum, we are pivoting our focus to stronger commercial execution to deliver top and bottom line growth in fiscal '25. We remain committed to the Hain Reimagined algorithm we outlined last year, though we are now using fiscal ‘24 as the base for our organic net sales growth. We are confident in the strength of our diversified portfolio and geographic footprint, the benefits of scale in our operating model, and our ability to deliver sustainable growth. Let me now discuss the progress we've made on the four pillars of our Hain Reimagined strategy starting…

Thank you, Wendy, and good morning, everyone. As Wendy discussed, strong progress in the focus on fuel pillars of Hain Reimagined enabled us to deliver upon our updated guidance for the year. In fact, top line results were ahead of our guidance, and adjusted EBITDA results were at the high end. Approximately 85% of the business grew in fiscal 2024, and we have made progress towards and are continuing to focus on stabilizing the balance. Our free cash flow generation drove gross margin expansion, net debt reduction and improvement in leverage, all while enabling us to invest in developing competencies to pivot to growth. We are excited to build upon this strong foundation in fiscal 2025. Let's look at the results in more detail. For the fourth quarter, we saw a negative organic net sales growth of 4% year-over-year. The decrease was driven by lower sales in both North America and International segments. For the full year, organic net sales growth was ahead of our updated guidance at down 2%, driven by 4% growth in International more than offset by 6% decline in North America. Net sales growth also reflects a 1 percentage point benefit from foreign exchange. We delivered fourth quarter adjusted EBITDA of $40 million compared to $44 million a year ago. Adjusted EBITDA margin was 9.4%, representing a 30 basis point decrease versus the prior year. For the full year, adjusted EBITDA was at the high end of our updated guidance at $155 million compared to $167 million in the prior year. Adjusted gross margin was 23.4% in the fourth quarter increasing approximately 70 basis points year-over-year. The increase was driven by productivity and pricing on the success of fuel and revenue growth initiatives, partly offset by deleverage on lower sales volume and cost inflation. For the…

Thank you, Lee. We are one year into Hain Reimagined and we're making strong progress in the four pillars of the strategy. Our progress in driving focus, resetting our global operating model, kicking-off our fuel program, and investing in key capabilities to enable growth position Hain stronger than we were a year ago. And while our pivot to growth in some areas has taken longer and resulted in a reset of our starting point, we are now positioned to deliver on our promise and remain committed to our Hain Reimagined algorithm. Our work in the fuel pillar has exceeded expectations. Momentum is building across the business as evidenced by the 85% of the business that is in growth and we are hyper focused on the commercial execution to deliver top and bottom line growth in fiscal 2025 and beyond. Our strong free cash flow generation has enabled accelerated reduction in net debt, improvement in our leverage ratio, gross margin expansion and investment in our brands and in key commercial capabilities, all giving us confidence in our ability to deliver on our Hain Reimagined outlook. We are a markedly different company today than we were just one year ago, as we began to capitalize on our diversified portfolio, our market reach and global scale, and we will be even stronger a year from now. I am excited for the year ahead as we pivot to growth and begin to realize our full potential as One Hain. Before we open it up for questions, I want to thank all of our team members for their passion and commitment, which are critical drivers to all that we have accomplished together in this first year and will accelerate our delivery of Hain Reimagined. Operator, please open the line for questions.

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] And our first question will be coming from the line of Jim Salera with Stephens. Please proceed with your questions.

Hi. Good morning, everybody. Thanks for taking our question.

Good morning, Jim.

Yeah. I appreciate the color on kind of the shape of 2025. If we think about what would be an incremental driver from the flat guidance to the better than flat, can you maybe just walk through, would incremental outperformance come from sales in Snacks in the back half from formula in the back half? If you could maybe just touch on each category and if we were to expect it to be in the better part of the guidance, where that incremental outperformance would come from?

Yeah. So it’s a good question. So I'll start and maybe Wendy can kind of weigh in. But just to kind of give some more color to the second half to the first half. So we've got three drivers in there. The one you just mentioned is formula and then what we're lapping, we do then anticipate seeing formula build up as we go through the year. The second piece of it, and we mentioned it actually, as we went through before is the promotional shift. And it's in Garden Veggie Snacks, we've got an event shifting from Q1 to Q3. I'd say the other item is Greek Gods, where we have broader geographic distribution expansion that takes place during the year. So that's kind of what is weighing in the first quarter. So we moved to flat in the second, and then we're seeing significant growth as we go through into the balance of the year.

Yeah. And I'll just add to that. There's the known headwinds that we have in the front half, which is, as we said, promotional activity that's just timing shift. It's also, as we build up our inventories around all formulations and sizes in infant formula. There's the unknown opportunities that I think to your point become potential over drivers. We're actually back in inventory in most of our formulations, not all sizes, but most of our formulations. So our team is leaning very heavily into regaining our distribution in infant formula. Happy to say that where we do have distribution, our velocities are back to where they were two years ago. So we know that parents want the brand, and we feel really good that, that could be a potential over driver. We also have some incremental distribution that the team have landed in our snacks portfolio in C-store alone, we have another 48 or I think we have a total store count now of 48,000, that's an incremental 13,000 stores that were picked up in the last quarter. So as we begin to have those distribution points realize their velocity, those become additional overdrives as we go into the year.

Great. And Wendy, I’m glad you finished on C-stores because I actually have a follow-up question there. Are you able to see, I know still maybe early days with some of the new stores, but are you able to see incremental purchases in traditional mass channels that are in the areas where you're getting distribution in C-store. And maybe another way to ask that is, for the consumers that shop at C-store, are those new households that are then buying your portfolio in other channels or are you just driving incremental purchases with existing households?

Well, that's a great question. We -- one of the reasons why we believe in away-from-home is an opportunity for us in brand building is, as our team calls it first to find and first to mind. Having our brands available in more places where the shopper is on their journey raises brand awareness beyond what you're spending and pay to advertising. So we know that that's an opportunity. Absolutely, having our brands in multiple points of distribution, we know generates awareness that then drives trial in the other places where they're shopping. And I would say -- I’d hesitate to not point out that in the last quarter, actually Garden Veggie and Terra were the fastest moving better-for-you snack products in the C-store channel in the industry. So we feel really good that as we grow distribution, we have brands that the consumer wants. We’re putting them into places where the consumer wants to find them.

Great. Thanks for the color, guys. I’ll hop back in queue.

Our next question is from the line of Ken Goldman with JPMorgan. Please proceed with your question.

Hi. Thank you. I wanted to poke around a little bit on the path to 2027. I appreciate that you're kind of reiterating that basic path today, maybe moving -- we're definitely moving the base year ahead to '24. When we look back at the Investor Day from a year ago, though, there were some elements underneath. You talked about a 3% top line CAGR. There was 10% EBITDA growth. You talked about a gross margin increasing up to maybe 500 basis points. I was just curious, do you think there's a point maybe this year, we'll hear about those underlying drivers and whether they're being reiterated as well because the slide that sort of talked about that path didn't really have a lot of math behind it. So I just kind of wanted to get a sense of what we're looking at under the cover, so to speak?

Yeah. So maybe I'll kick off and then Wendy can kind of add any more context. But Ken, to your point, I mean, I'd say the underlying algorithm in the shape of the P&L, we are committed to. So we committed to your point to 400 basis points to 500 basis points of gross margin expansion. We obviously saw some good traction on that. I think in Q4, we said 70 basis points, so we see a pathway there. EBITDA margin of 12% plus. So committing -- continuing to commit to that. The other piece of it was on the net working capital was $165 million, really good traction on that. We delivered over a third of that in this first year. And then the final piece is a 3% CAGR on organic sales. So we continue to look to deliver that, but it's off of the organic base of 2024 as the starting point. And I would just say that, as we look some of the areas were less development kind of initially anticipated and for the very things we talked about through formula and then Personal Care. So we made some strategic decisions on Personal Care on the winning portfolio. But again, using '24 as the base year still committed to the 3% plus algorithm.

Yeah. And I would just add to that, that the -- and to your point, Ken, the sub elements of Hain Reimagined, we've made great progress against those. Where we talk about rebate is really taken into account the business exits that we did in fiscal '24. So our organic revenue starting point is different than what we had a year ago because of the portfolio simplification, because of some of the divestitures, so it's just us committing to the three plus. It's just off of a new revenue base.

Okay. And then as we -- just to follow up on that, as we think about kind of how to get to those '27 numbers, is the idea then that '23 is kind of just a wash year in the sense that there were some unusual headwinds that really don't repeat as we get to kind of, I guess, the back half of '24 into '25 and that, therefore, it's okay to kind of rebase it to '24 because we really shouldn't think of those headwinds as ongoing? Because I guess the number one question I'm getting this morning is, how does Hain really see such a massive acceleration in top line growth in gross margin growth in '26 and '27, which is a compressed time line now versus what you had previously. So not to beat a dead horse here. I just do want to get a little bit of a better sense of where that acceleration really comes from into the next couple of years?

Yeah. I think it's exactly to your point. There are some unique elements around our focus pillar, really the portfolio simplification in fiscal '24 that we fundamentally exited whole categories. Take, for example, what we said in the last quarter that we were reducing over 60% of the SKUs in the Personal Care portfolio that related to about 30% of the overall revenues. The fact of doing that actually rebases your overall revenue. We also had some divestitures with Queen Helene and Thinsters. So we've pulled that out as well. Just to get to an equal starting point, but we've not reset each one of the categories. We’re essentially taking into account at the total, where we’ve exited whole categories.

Perfect. Thank you.

Our next question is from the line of Matt Smith with Stifel. Please proceed with your question.

Hi. Good morning. Thank you for taking my question. I wanted to follow up on the impact of SKU rationalization and business exits. There's a portion of that, that's flowing through sales that's not treated as organic sales when you're completely exiting a business. Can you help me understand with the flat organic sales outlook in the upcoming year. Is there -- does that include a headwind of just normal SKU rationalization, not necessarily where you're exiting businesses, but just trimming the SKU count within your current portfolio or is all of that really flowing outside of organic sales?

No. I'll start, and I'll let Lee fill in a little bit of the color around that, but you're exactly right. There's a portion of our portfolio simplification that actually comes out because those are whole category exits. So take, for example, we mentioned in the last quarter, we had Personal Care brands that were in categories we really -- we didn't need to be in. So exiting toothpaste, and existing deodorants, for example, those are category exits. But there is some regular portfolio maintenance that comes out that doesn't get organic treatment. We do still have some of that, that plays out in this year. And so some of that we're actually acknowledging in the front half of this year, which is why we've given fairly tempered guidance in the front half. And that history is lapped as we go into the back half, so that becomes less of a headwind.

Yeah. So I think you got it. I mean, we're obviously coming out in '24, we had Thinsters and Queen Helene, and then to Wendy's point, I mean, what's being treated is really transformational winning portfolio, part of our transformational winning portfolio strategy. So whole categories that we shouldn't be in. And that's why we actually gave the 2024 number. We want to kind of really make sure we provide clarity. So as you saw on one of the slides, we actually gave that adjusted baseline 2024 number.

Thank you for that, Lee. And as a follow-up, that the fiscal '24 organic sales base number that you gave suggests like a reported sales decline of around 3%, if we hold that organic sales flat year-over-year. Is it -- is that the evidence or is that directionally the impact of the business exits that flows through the divestiture line?

Let us get back to you on that because I want to make sure that we give you an accurate number on that. But there are elements of business exit and divestiture that play into that. But I want to make sure that we give you the exact number.

Yeah, because there are -- I mean, obviously, kind of a number of pieces with what -- I said what came out from an organic perspective, Thinsters, Queen Helene and then the PC category exits. So yeah, we’ll come back to you.

Thank you, Lee. I’ll leave it there.

Thanks, Matt.

Our next question is from the line of Alexia Howard with Bernstein. Please proceed with your question.

Good morning, everyone.

Good morning.

Hi, there. So am I right in thinking that as we rotate into fiscal '25, you're going to start breaking out price and volume independently. And if that's still a case, is there any color you can give on how the organic sales growth breakdown for 2025 is going to shape up? I'm assuming pricing will be fairly flat and then volume will improve through the course of the year as you described with the organic sales growth, is that a reasonable way to think about it?

So you are correct. We will be breaking out. I know that's kind of long promised, but we have put the systems in place. So as we get into Q1, we will break out the price volume mix and you're also right. I mean, there is a piece of pricing, but it is primarily driven by volume mix as we go into 2025.

Perfect. Thank you very much.

There's a little bit of wrap around pricing from fiscal '24, but not substantial incremental pricing. And then obviously, with the sales of formula and a few other categories, we will see the mix improve as we go into the year as well.

Got it. Okay. That's very clear. Thank you. Could you talk a little bit about the sourcing of the organic lactose that has been dragging on for some time? Are you moving to a dual sourcing strategy? How are you creating resilience in that area because I know it's been something that's been with us for a little while here? Thank you and I’ll pass it on.

Yeah absolutely. Infant formula, as you know, has been a pain point, certainly since I joined the company. I feel very good about where we are in supply. We do across our formula, we have multiple supply options and toddler formula and we've got some location redundancy in our infant formula. We're also, which you would see play out in a little bit of our days of inventory. We're actually holding a little bit more inventory of our core SKUs in infant formula as they become available so that we give ourselves a little bit of cushion as we go forward as well. We know that as we rebuild our infant formula business with our retail partners, that assuring them that we can have supply on shelf consistently is paramount. And we also need to make sure that we are investing behind the brand to create awareness with parents. So both of those are things that we're taking very seriously as we go into the front half of this year, you'll see some incremental marketing in the back half, but you’ll also see us have a step up a little bit of inventory to make sure that we’re holding enough to sustain in the event that there’s a hiccup.

Perfect. Thank you very much. I’ll pass it on.

Our next question is from the line of Andrew Wolf with CL King. Please proceed with your question.

Thank you. I wanted to start with kind of a follow-up on the outlook and the cadence for the year consolidated. Just ask if you can give any commentary by the two segments. I mean my takeaway just kind of thinking about it analytically, as it probably seems like between the things you're calling out, which are more in the North American market and just how the year went -- most of its -- the swing and the cadence is driven by the North America segment, but I would like to get your sort of commentary on that as well?

Yeah. There is obviously some very large buckets that impact North America in the front half, and there are tailwinds as we go into the back half. International actually has a little bit of that as well. So you will see a little bit suppressed, especially in the Hartley's snack business, as we build up in the front half of the year and then some contracts in own label, both in the U.K. in spreads and drizzles, and in the European market in non-dairy beverage, those begin to play out as we go through the back half of the year. Hartley’s, for example, is a leading brand in snacking, single-serve snacking, but it is a high impulse purchase. And we've changed our promotional strategy to really support feature and display, which is critical for that brand and we've also converted to a more recyclable packaging, which retail partners really want. The combination of those two things and a high-low pricing strategy, we feel really good about. And I think we even mentioned, then we've got about 800 shippers in Hartley's that goes out in the front half of this year, getting incremental feature display, and we have another plug of features that comes in the back half of the year as well with additional shippers. So we feel good that both regions have reasons that are driving some of the softness in the front half, which we've appropriately called into our guidance. But we have lots of bright spots as we go into the back half that are actually already known. It's simply a timing.

And the front-end softness in International, is that more the meat-free declines or is it more some of this private label stuff?

No. It's largely in meat-free. So you still see the meat-free softness in the category. I think we also mentioned that we exited the refrigerated segment in meat-free and focused on frozen. So you'll have a little bit of that portfolio simplification that impacts in the front half as well as we really rightsized to the fighting core of what we want to have in the meat-free category.

Got it. Thank you. And just wanted to follow up with a strategic focused question on the salty snacks portfolio in North America. Can you just sort of give us a sense of your feeling about how much scale that business has as you address the mass market with three brands, two of them pretty -- all the niche and different brand equities and brand power? But is that enough to get slotted in the way to optimize your slots or when you -- I've seen evidence that you gained some shelf space, at least some regionals, but just wanted to get a sense of that's a pretty concentrated category on a national basis. How you think about its positioning as a portfolio?

Yeah. We actually feel very good about our snacks portfolio and especially around the three primary brands that we're leaning into. All three have a very unique position in the space, but they're really leading in better-for-you. And for instance, in Garden Veggie, we know that where we have the right shelf assortment, our velocity is actually turn better than brands that have a higher ACV. Our teams actually successfully use those data points with our retail partners, and you will see some fairly large incremental ACV with some very large retail partners that begins to ship in September, where we go from, I think, on Garden Veggie, Terra and Garden of Eatin from an ACV at a particular retailer somewhere in the mid-20s to somewhere in the mid-70s picking up about 6,600 new stores in the marketplace. So what we’re finding is – the data tells us that the brands do resonate with consumers. They’re looking for them to be available more often, so the brands are loved. We just make it kind of hard for you to find it. So we are driving incremental distribution. We’re very focused on our promotional spending, supporting velocity because we know that’s critical. And then this year, you’ll see – I think we launched it about three weeks ago is the first ever master brand campaign on Garden Veggie. That’s the first time we’ve actually promoted the entire portfolio of Garden Veggie. So you’ll see us really lean into brand support around the snack portfolio. Q – Andrew Wolf: Got it. Thank you. That’s it from me. A – Wendy Davidson: You bet. Thanks.

[Operator Instructions] Our next question is from the line of David Palmer with Evercore ISI. Please proceed with your question.

Thank you and thanks for that commentary about some of that timing for the fiscal year, which certainly plays into some of the data that we're seeing right now on sensible portion of Garden Veggie. I'm wondering, just -- as we're looking at MULO plus data, do you see that more or less approximating what sort of North America organic sales we're going to see from you? It was pretty close on the most recent quarter. I'm wondering, if you think that's going to be the case going forward, if there's -- maybe some non-visible portions, obviously, Canada is one, but other non-measured channels that you think might be causing a gap versus the data that we'll see?

Yeah. It's a great question. And there's I know a lot of movement around the data sets that are available. So let me sort of break down the visibility of our business. So if you think of overall Hain, call it, 40% of our business is International, 60% is North America. So you can't see the International business in North America, approximately 10% of the business is in Canada, which you also can't see -- of the remaining piece, there's about 85% in the new Circana MULO+C that would be visible. So in total Hain terms, you can see about 45% of the total business is in the Circana data. We will have some noise in the Circana data over the next couple of months for a couple of reasons. If you look at total Hain and it includes Personal Care and Food and Bev, the Personal Care because of portfolio exits will be a material drag in the end market data because those are just categories and SKUs that we've walked away from. If you look in just Food and Bev to Lee's earlier point, we've got some promotion -- very large promotional activity that took place last year in quarter one, that is taking place in this year, but it's moving to quarter three. So it won't affect us on the full year basis, but it will be a visible view in quarter one, but as I said, we've also picked up incremental ACV with some very large retail partners, and we've picked up C-store, which we'll now be able to see in some of the Circana data that should start to give the year-on-year comps improving on a weekly basis as we get farther into quarter one and certainly into quarter two.

Thank you for all that. That's very helpful. A question on baby formula. Right now, that is about only 2% of your sales or so. When capacity is where you want it to be and maybe you can let us know when that will be. where do you think that mix can go? How much higher do you think that business, how much bigger can that business get when it's unconstrained?

Yeah. So we feel very good about the capacity and capability that we have, it's been running very strong since early June, where we started with a limited number of formulations and limited sizes just to get full run rate. We are beginning to add the full formulation mix, so gentle, sensitive, dairy, etc., and we're beginning to add the full sizes. We will be in all sizes and all formulations that we need as we get into, call it, late quarter two. So the back half, we feel good about. As we look at the size of that business, Earth's Best was the number one infant formula in better for you up until two years ago. And we now are number five or six. Our goal is to get back to that number one position. We have ample supply to do so. We're investing behind the brands. We were sort of the original where we are the original organic baby formula, the OG in the space, and we intend to recapture our leadership position in that way and so we'll be leaning into that. So how big that can be? The category has actually grown in the last couple of years. So it should be bigger than it was for us a couple of years ago, but we're going to be leaning very heavily into that.

Got it. We'll take a look at that. Thank you.

Thank you. The next question is from the line of John Baumgartner with Mizuho Securities. Please proceed with your question.

Good morning. Thanks for the question.

Good morning.

Wendy -- good morning. Maybe first-off, Wendy, you sound much more positive on snacks distribution for the coming fiscal year after the phasing, I think, disappointed a bit last year. How do you think about the risks and the visibility that the phasing could sort of underperform again? I mean, is there a larger promotion from larger brands that could be an issue? Could there be some volatility in the shelf resets from new outlets that you're entering? Just maybe when you think about the ramp, what are the potential pressure points that would cause a deviation from plan?

Yeah. I think, first, you have to look at sort of why our snacks portfolio under delivered to our expectations. And I would tell you that it was 100% our own execution. It wasn't that we didn't have brands that could compete. It isn't that we didn't have the right products or the right sizes available. We didn't have distribution of the core assortment in all the places it needed to be. We had things all over the place, which doesn't allow you to promote as effectively or to create marketing campaigns that really help it punch above its weight. We are focused very much on right products in the right place in the right sizes because we know when we do that, the velocities are very strong. We're very focused on promoting at a level that we need to. We are promoting at the same, so our sales on promo is about where it's been. It is below industry average. So we're not having to overpromote, but what we also know is promoting our brands isn't about a price discount because that's not why people buy the products. It's about driving feature and display. So we are 100% focused on using our promotional activity to help our retail partners and putting our products within arm's reach of the consumer so that they see it, there is – it’s aware and it's available. It's that whole first of mind, first to find. And then we know that there is a need for us to continue to promote the portfolio. This summer is the first time we've ever done a multi-brand program. We did Savor Your Summer, which is our all three of our brands in better-for-you. During the core snacking season, we know that a better-for-you consumer wants to buy things -- they want the options. And so we were helping our retail partners and having it available. Our sales of those shippers, I think we had 13,000 shippers that went out and the sales during the Savor Your Summer exceeded our expectations. So we feel very good that right products in the right place at the right price point that we invest and promote behind, but not over promote and that we partner with our retailers to create awareness, we've got the right brands to compete there. But our biggest issue was ourselves. It wasn't necessarily that competitors were creating challenges for us.

Okay. And then on the tea business, that's been an area of material innovation for you. And looking at the Nielsen data, at least, the baseline volumes have been softer there, both in Q4 and in Q1 through mid-August. I know it's sort of off season, but have there been any other factors in marketing or merchandising having an impact? Just curious, if you can elaborate on the retail takeaway there and any kind of merchandising for FY '25, we should be thinking about?

Yeah. We feel very good about Celestial Seasonings, but I would tell you there's a couple of things playing into it. we converted all of our packaging to remove the overwrap on the boxes. And so as we've been phasing in the non-overwrap packaging on shelf, it's caused some challenges in shelf assortment, but also some availability as we're driving that core assortment of all the non-overwrap. We also pulled back promotion spend and marketing spend in quarter four in anticipation of two things. We have a first master -- big master brand campaign around Celestial Seasonings that will launch in early October. We also had new innovation that's coming, and we wanted to spend those dollars going into hot tea season rather than over promoting or marketing off season. So we think these are short term in nature. We feel good about the assortments that we have coming. We've got two new innovation coming. So we have a beauty wellness tea with Biotin and we've got a lemon tea as well. And both of those are new innovations as we go into fiscal '25. But Masterbrand campaign clear shelf assortment going into hot tea season, we feel good as we go into the back half of the year.

Thanks, Wendy.

You bet.

Thank you. At this time, we've reached the end of the question-and-answer session. Now I'll turn the call over to Wendy Davidson for closing remarks.

Yeah. I want to reiterate what I said earlier and really thank our teams. I especially want to thank the group that we have in finance and supply chain for the incredible work that they did in delivering fuel in this first year, that has really positioned us to make the investments we want around the business, but also to be able to pay down debt. I want to really thank everybody as we’re going through this first year and especially, for the time this morning and look forward to further conversations.

This will conclude today's conference. Thank you for your participation. You may disconnect your lines at this time.