Good morning, everyone, and welcome to The Hershey Company's First Quarter – my apologies, Second Quarter 2018 Results Conference Call. My name is Erica and I will be your conference operator today. At this time, all participants have been placed in listen-only mode. After the speakers' remarks, there will be a question-and-answer session. This is call is scheduled to end at about 9:30 AM. Please note this call may be recorded. Thank you. It is my pleasure to turn the conference over to Ms. Melissa Poole. You may begin your conference.

Thank you, Erica. Good morning everyone. We appreciate you joining us for The Hershey Company's second quarter 2018 earnings conference call and webcast. Michele Buck, President and CEO; and Patricia Little, Senior Vice President and CFO, will provide you with an overview of our results followed by a Q&A session. Before we begin, please remember that during the course of this call, we may make forward-looking statements within the meaning of the federal securities laws. These statements are based on our current expectations and involve risks and uncertainties that could differ materially from actual events and those described in these forward-looking statements contained in our 2017 10-K filed with the SEC and today's press release. Finally, please note that on today's call, we will refer to certain non-GAAP financial measures that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of the non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP. With that, I would like to turn the call over to Michele.

Thank you, Melissa. Good morning, everyone, and thank you for joining us. Our second quarter sales and EPS were in line with our expectations and we remain on track to achieve the annual financial guidance we shared in April. In March 2017, I shared with you a vision for transforming our business and our focus, as a company, remains on delivering that multi-year strategic plan and driving long-term value creation. We participate in on-trend growing categories with a portfolio of great brands that resonate with our consumers. As consumers, their shopping and the retail environment evolve, we will continue to build capabilities and evolve our business as we have done previously when the marketplace transforms. In the second quarter, we continued to invest in our brands and capabilities for growth, while taking measured steps to enhance long-term profitability. We developed new advertising campaigns on our two largest brands, rolled out enhanced selling tools for our retail sales force and made solid progress on our capacity expansion initiatives. Amplify's marketplace performance remains strong with high single-digit growth, resulting in share gains and the integration is proceeding well. The ongoing transformation of our international business is ahead of schedule. We delivered solid organic growth for the quarter, completed the successful divestitures of Tyrrells and Golden Monkey and drove year-to-date profit to $34 million, just shy of our largest ever full-year profit in this segment. Constant currency net sales increased 5.3% in the second quarter, including a 590-basis-point benefit from the Amplify acquisition. Adjusted earnings per share diluted of $1.14 increased 5.6% compared to the second quarter last year. This morning, we also announced the 10% dividend increase and a new stock repurchase authorization, a testament to our solid balance sheet and strong cash flow generation. Last week, we announced to our retail…

Thank you, Michele, and good morning, everyone. Second quarter net sales of $1.75 billion increased 5.3% versus the same period last year, including a 5.9-point benefit from the Amplify acquisition. Volume increased 1 point, which was offset by negative net price realization of 1.6 points. Foreign currency translation impact was negligible. Adjusted earnings per share diluted came in at $1.14, an increase of 5.6% versus the same period last year. Income from a more favorable tax rate, acquisitions and volume were partially offset by gross margin declines consistent with our April outlook. As Michele stated, there is no change to our full-year organic sales or adjusted EPS guidance. We expect organic net sales to be towards the low-end of the slightly up to 2% range and adjusted earnings per share diluted in the $5.33 to $5.43 range. As we said in our press release, we updated our reported net sales outlook to reflect the strategic divestitures of Tyrrells and Golden Monkey. By segment, North America net sales increased 5.6% versus the same period last year. The Amplify acquisition added 6.6 points and foreign exchange currency rates were 0.2-point benefit. Volume was a 1 point contribution to sales growth. Net price realization was a 220-basis-point headwind due to the impact of increased levels of trade promotional spending we planned in support of 2018 programming. As a reminder, second quarter net sales were impacted by current year promotional shifts and the lapping of elevated inventory levels during the prior-year period. Organic net sales were relatively flat in the first half of 2018, in line with our expectations. North America advertising and related consumer marketing spend increased on our scale confection brands in the second quarter. This was more than offset by optimization and shifts out of emerging brands as we emphasize more…

Thank you, Patricia. Our brands are loved by consumers. And next year, we will celebrate our 125th anniversary. Each of us at Hershey are extremely proud that we can share a little goodness into the lives of our consumers. It's one of the things that makes Hershey so special. With our success comes opportunity and responsibility that we take to heart. Our consumers and customers can feel good knowing that as we focus on winning in the marketplace, we are doing so in a way that positively impacts our people and our planet. Our investors can feel good knowing that this makes us a stronger business over the long term. We are focused on delivering the back half of the year, but our top priority remains on long-term value creation. We are making meaningful progress in transforming our domestic and international businesses and our multi-year strategic plan will continue to guide our investment decisions. The rapidly changing retail environment is driven by the consumer and we will continue to drive our business forward by focusing on core brand growth and portfolio expansion, retaining and attracting the best talent to build the capabilities needed to delight our consumers, winning across the total commerce landscape and operating our businesses efficiently and effectively. Patricia, Melissa and I are now available to take any of your questions.

Thank you. We'll take our first question from Ken Goldman from JPMorgan. Please go ahead.

Hi. Thank you. Patricia, your accounts receivable were up fairly meaningfully, I think, around 20% year-on-year. And I realize last year's receivables level was unusually low. But beyond the comparison, was there any reason for the sizable increase in 2Q 2018? I guess really the larger question is whether you feel your shipments and consumption timing were more or less in line with each other this quarter, if there'll be any reversals next quarter or so forth? Just trying to get a sense of that whole environment, so to speak.

Go ahead, Patricia.

Yes. So, the biggest reason for the changes in receivables was clearly the Amplify acquisition as we acquired their receivables. So, that drove that increase. As we look overall to inventories at retail levels, it's always a changing environment. We have some customers where our inventories are up. We have some customers where our inventories are down. Those that are up are focused really on service levels. I think, especially in this tight freight environment, the focus is making sure that they have enough safety stock to get products on shelf in this environment. And there was some inventory out where there was consolidation. And besides that, what we saw was sort of the normal patterns of inventory shifting that you'd expect from seasons and promotions similar to what we had last year.

Okay. Thanks very much.

Thank you. We'll go next to the line of Alexia Howard from Bernstein. Please go ahead. Your line is open. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Thank you very much. Good morning, everyone.

Good morning, Alexia. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: So, can I ask about the gross margin trends going forward? Obviously, you've been under a lot of pressure for the last year. It looks as though we're getting back to flattish, I guess, in the back half, given the guidance for the full year. What's enabling that sequential improvement as we move through into the second half? Thank you and I'll pass it on.

Patricia, do you want to take that one?

Yeah. So, some of it, Alexia, is just frankly lapping the fact that we saw the inflation really start to bite last year at this time especially and I think this was well covered in our call as well as frankly other people around some of the freight inflationary pressures that we had as well as some of the things that we highlighted in our call around the cost of complexity, some of the logistical costs that that drives. So, as we're lapping those, that's a big reason that we see those sequential improvements year-over-year. But beyond that and I think more foundationally, we're really tackling the root causes of a lot of the impacts of what was driving that inflation. So, really working hard on freight optimization, making sure that we're trying to avoid buying in the spot market, we contract our freight in advance and then really pushing hard on complexity, both from what we've talked about before with our SKU rationalization, but getting at some of the even deeper root causes of planning better, which is something we mentioned on this call, using some of our analytics tool. If we can plan it on a more granular level, it avoids some of those costs. So, those are things we're working on. And then, the third benefit that we really see driving that year-over-year improvement in the very back of the year is a strong improvement in international, which continues, as Michele, I think, really highlighted in her remarks, to drive to a profitable growth (33:18) margin. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Great. Thank you very much. I'll pass it on.

Thank you. We'll go next to the line of Andrew Lazar from Barclays. Please go ahead.

Morning, everybody.

Hi, Andrew.

Hi. I think you mentioned that volume in North America was up 1% and that's a bit better than, I think, what we've seen in some of the scanner. And then, I also thought last quarter that the SKU rationalization you talked about to start to limit some of the complexity, maybe would be a bit more of a drag to North America organic growth in this quarter as well. So, I'm trying to get a sense of whether those things, those programs were the drag that you expected or I guess maybe it's just all the untracked channels at the end of the day, but maybe that differential between what we saw in North America volume with the other aspects I mentioned would be helpful.

Yeah. Andrew, so I will start with, as you know, we said that we expected the first half to be our softer half and second half to be stronger. Certainly, as we look at Q2, we did see retail takeaway a little softer and that was partially offset by strength above what we anticipated in non-measured channels as the consumer continues to be fluid relative to where they're purchasing products. And that's very important for us to focus on. I would say that the real impact from SKU rationalization is really going to go much more forward versus Q2. So, we really just kicked the program off in the middle – first part of the year. And so, we're going to see more of that impact come later. I guess, as you think about takeaway for the year, what I would say is, as we look to the back half, the key levers that really are going to accelerate growth are, first of all, seasons, which you know is about a third of our business. We have strong visibility into seasonal orders, as you know, because customers commit way in advance and we produce in advance and we have very strong commitments on the season, both Halloween and Holiday. Secondly, we have also visibility to customer resets in the fall. And we know, through our partnership with retailers, we have a real a focus on making the shelf as productive as possible and that will lead to some distribution gains for us in the back half of the year. We also have the launch of Reese's Outrageous! which really just began in June, but it really accelerates and we gain full distribution in the second half of the year. So, our instant consumable innovation lap, it's much stronger what we have in place this year than prior year. And I'd say those are some of the biggest factors.

The only thing I wanted to add on the SKU rationalization is, as you'd expect, the first things that we take out are frankly SKUs with very small volume. So, they're not the ones that you see a big impact of and we also focused a lot on merch units, which, again, you don't see coming through in the scanner data.

Right. Thanks very much.

Thank you.

Thank you. We'll go next to the line of David Driscoll from Citi. Please go ahead.

Hi, David.

Great. Hi. Good morning. I wanted to ask some questions just around pricing, but I wanted to start with inflation. Could you guys just quantify your expectations for inflation in 2018? And then, one piece of complexity that's a little unusual, but I think we need to know is, is how much of the inflation is system-wide or industry-wide versus Hershey specific? And I'm really thinking about the stand-up packaging, because I know that that's been a big issue. So, there's a question there on inflation and then, I have a follow-up on pricing.

Okay. Patricia, do you want to handle the inflation question?

Yeah. I guess if I take it in some buckets, we're seeing a standard inflation that we always see going through on wages and benefits that again, what I think, is industry-wide throughout the country. Second, the freight inflation is hitting us and we do see that impact as well. Again, I think, that's industry-wide. In fact, I think, our guys have done a really good job of managing that, frankly better than probably the industry. In terms of commodities inflation, I think it's a constantly changing landscape out there. It's not a huge driver for us this year. We have seen some volatility in some of our input costs, like cocoa, but, frankly, we think our hedging program really does a great job of smoothing some of the very short-term swings that we see there. So, those are things that I would say everybody in the industry is seeing, wage, freight, whatever their commodities piece is. And then, you're right, we do have some impacts that are specific to us. I think the ones that I would call out are some of the inflations that we see as just being driven from some of this complexity that we've talked about, which drives some internal logistics costs as well as the packaging, which we have talked a lot about over the last several quarters. And we think that that investment that we've made in more expensive packaging though will really deliver, especially going forward, a better value proposition and impression on shelf to our consumer.

And then, on pricing, can you guys quantify the magnitude and timing of the pricing? And then, one question specifically, I think pricing in the quarter is down. So, Michele, if you could just kind of put this together for me, we're taking a price increase, but yet in the second quarter, pricing was down and it's not even immaterial. I think it's at 1.6%. So, kind of why is pricing so weak in the second quarter, yet there is pricing announcements coming? It's just a little bit of a – it kind of seems a little bit off in terms of kind of second quarter results and what they suggest versus what it is that you need, but maybe you could pick it up and take it from there.

Yeah. Absolutely. So, let me start with the first part of your question relative to the price increase. If you look at our total price increase, the weighted average increase of the total of all the actions we took is about 2.5% across our total business. If you really break that out, as I mentioned in my comments, we've utilized a couple different pricing levers and so, the entire portfolio is impacted by terms. There are select pieces of the portfolio impacted by price-pack optimization. And then, about a third of the portfolio experienced just a straight price increase. So, that's kind of how you can think about it relative to across the portfolio. We announced it this past week as is the case with what we've done historically. We do need to price protect for promotions that are already committed to customers. So, really the prime benefit of that comes closer to next year. As you know, there's a little bit of a conversion on the way to realizing the price. And obviously, we have seasons in the back half of the year that are about a third of our back half where we have prices protected as well. As you look at the second quarter and price realization there, Patricia, do you want to talk a little bit about that?

Yeah. So, as we shared before, we have been shifting some dollars into trade this year to support some incremental in-store activity. And then, I think, it's also important to say that there are a number of things going on in our trade line. Some of it did show through on the scanner to the consumer, but it was actually fairly small amount. There's other pieces, which really supported more just in-store activity and then, actually a fair amount of it also was frankly some costs that just shifted from below the gross sales – the net sales line into net sales for some accounting reasons as well as some prior-year true-ups. So, it was a mix of different things. And I think that, as we go forward, we just always are looking at our trade, making sure that we evaluate the effectiveness of it versus advertising and working with our retailers and making sure that we're really driving the best value possible from those dollars.

Yeah. Remember, I guess, I would say, in our category, as you know, one of the most important things to generate from our trade is merchandising. So, we continuously balance how much goes into price. And as Patricia mentioned, there was a relatively smaller amount that really showed up as a retail price decline.

Thank you so much.

Thank you. We'll go next to the line of Jonathan Feeney from Consumer Edge. Please go ahead.

Good morning. Thanks very much.

Hi, Jonathan.

How are you?

Very good. How are you?

I'm doing great. So, I wanted to – you gave us the top line impact, but a real simple question, trying to understand any color you can give us around what Amplify did both, in total, in North America to margin trend year-over-year and the operating profit trend year-over-year? So, it seems to be there'll be somewhat of a positive impact. Any quantification you can give us or – directionally would be very helpful?

Yeah. I mean we feel good about what – the profit that we're delivering on the business and it is actually ahead of our expectations. So, we are feeling good that we're over delivering on our acquisition model on the top and bottom line. And so, it's having an impact in line with what we had shared with you earlier relative to, if you look at EPS accretion, we are in line with the range that we had provided and are seeing strong profitability. In fact, the team has been focused on really very strong discipline about leveraging the value of that brand and actually spent some time this year eliminating non-productive promotions to further focus on profitable growth. But really if you look overall, the gross margin impact of that business on our total North America business, just given the size of it, is pretty minimal.

Okay. Thank you very much.

Thank you. And we'll go next to the line of Bryan Spillane from Bank of America. Please go ahead.

Hey. Good morning, everyone.

Good morning.

Got a follow-up question just on price increase. I think in the past, when the pricing in the category has been more episodic, retailers, my recollection of it, has pretty much applied it across the board to everyone. Where here, it's a little bit more dynamic, I guess, right? Your – part of it is list price, some of it is price pack. So, I guess I'm trying to get a sense from your expectations. Will retailers sort of look at what Hershey is doing in isolation or will they try to sort of apply it across the whole category?

I really could only speculate on that. So, at this point in time, I really don't know. I'm not sure what their plans will be there. That really rests in their hands.

I guess as you have factored in elasticities (44:28), have you, I guess, thought about that differently maybe than you had in the past?

Well, we always look at where our pricing is. And in some parts of the portfolio, there's a lot of similarity in our portfolio and competitive portfolios. In some parts of our portfolio, there's not. So, we've continued to do a very detailed analytic price elasticity models and evaluate all the learnings across, but we can't really share the specifics behind that.

Okay. All right. Thank you.

Thank you. We'll go next to the line of Rob Dickerson from Deutsche Bank. Please go ahead.

Great. Thank you. I just had a bit of a bigger picture question on international. You've divested the two businesses. So, congratulations on doing that. But just in terms of overall profitability expectations, as we think forward into 2019, but say three years forward, how should we – or how would you like them the market to be thinking about the operating margin potential on that segment? And I just asked, because I think a lot of us can remember dating back, let's call it, five years when there was an expectation for low-double-digit operating margin on the business. A lot kind of happened in the interim. That kind of went away to an extent. And then, in Q2, you're putting up almost 9% in op margin and that's I'm assuming before some hopefully positive effect that would be coming from the divestments. Thanks.

Sure. So, we feel very good about the profitable growth that we are deriving and how we've reset the markets. And we also see continued opportunity going forward. So, I think without getting into tremendous specificity, I think it would be fair to say that we believe low-double-digit margins will be possible – could be possible going forward. And I think that's a good way to think about it.

Thank you.

Thank you. And we'll go next to the line of Steve Strycula from UBS. Please go ahead.

Hi. Good morning. Quick clarification, just wanted to see whether – when you talked about the industry price increases and your price increases, across the portfolio, is this in line with some of the peers are doing? Lindt had commented that Ferrero and some others who are out there in the marketplace also taking price. So, first question, I just want to say, is that pretty much at parity with what you're seeing across the landscape?

I'm not sure that I'm in a position to really comment on others' pricing actions in the marketplace. I think I'd prefer to stay away from that and I'm not sure honestly that I have full knowledge of what others have done, given the actions have been relatively recent.

Okay. Great.

I know there are some of them out there.

And then, how should we think strategically about M&A going forward? It seems like, a few times on the call today, you called out the lower leverage of the balance sheet and the appetite to looking at different types of assets in the marketplace. Are you seeing anything out there in terms of the landscape that's more appealing today versus what it was 6, 12 months ago, whether it's asset prices or anything you can kind of speak to?

Yeah. We remain committed, as we laid out in our strategy in March of 2017, that M&A is a critical pillar of growth. We see that as an opportunity to capture more snacking occasions, given our strengths and core capabilities in the area of snacking. And so, I would say, we continue to be committed and you can look at our activity and see that we're taking action probably at an increasing rate versus perhaps where we were in the past, at least relative to size and scale of assets. I would say that probably the biggest thing influencing our actions is, I think that we have learned a lot and are applying a lot of lessons from past acquisitions. And so, we have perhaps even tighter screening criteria that allow us, I believe, to move more dynamically to capture opportunity.

Great. Thank you.

Thank you. We'll go next to the line of Pablo Zuanic from SIG. Please go ahead.

Hi. Good morning. This is actually Aatish Shah on for Pablo. On a more of a structural level for the quarter specifically, just want to know if there's a change in attitude by retailers regarding the chocolate category, specifically if you could touch on this by channel, space allocation, promotional environment, et cetera, that will be helpful. Thank you.

Yeah. I would say that the chocolate category and the confection category overall continue to be a category that's very important to pretty much all of our retail base, because it is a category with pretty high profitability and it has produced well for retailers over time. So, certainly, in terms of the level of priority and shelf space, that does vary a bit by different classes of trade and different retailers, depending on their strategies. But overall, I would tell you that we have continued to work with key retailers, some of whom are looking to expand space in the category as they look at other categories in their box and say how do they best master the space allocation. And if you just look at category growth across all categories in store, you know that confection continues to grow faster than many. So, there certainly are many that are looking at that. And then, as we know, there are a couple who have strategies that head in a different direction, and so they probably aren't prioritizing it, but I would say, overall, we continue to feel good about the role of this category and how retailers are viewing it as very important.

Great. Thank you.

Thank you. We'll go next to Jason English from Goldman Sachs. Please go ahead. Jason English - Goldman Sachs & Co. LLC: Hey. Good morning, folks. Thank you for allowing me to ask a question. I appreciate it. A few housekeeping details, I guess, first, the disposal of Tyrrells and Golden Monkey, what's the anticipated revenue drag on both the tail-end of this year and on a 12-month basis?

Patricia, you want to – yeah.

Yeah. So, you can see that that's really the delta between the 5 points that we talked about from acquisition down to the 3.5 [points]. Jason English - Goldman Sachs & Co. LLC: Okay. That math sort of implies if we annualize it that those businesses are about a third smaller than they were when you bought them. Is that right?

I don't think you can do it that way, because for Amplify, Tyrrells is a piece of their business, but for Golden Monkey, it's been changing dramatically as we go. Jason English - Goldman Sachs & Co. LLC: And a quick back of the math envelope, we get about a 15, 20 basis point gross margin tailwind from exiting those businesses, reasonable?

I'd have to look quickly. There's a small gross margin improvement, but it's very small. Jason English - Goldman Sachs & Co. LLC: And then, last question, I'll pass it on. You mentioned – a two-parter question. On the pricing components, can you specify what that third of the portfolio is where you took a straight price increase? I am assuming it's sort of single serve. And can you give us the magnitude? And you mentioned investment in packaging. Can you contextualize that for us? Give us a sense of what exactly you're referring to.

So, I can tell you that some of the specific price increases were primarily in the Take Home Packs. And I think that's about as much detail as I want to go into on that. And then, relative to investments in packaging, that's really about the refresh to create strong impactful packaging graphics and structure at retail to capture shelf impact. And that's one of the areas where we look at the total value proposition to the consumer and really try and optimize that value proposition. And that's part of what you see in our broad pricing action. Jason English - Goldman Sachs & Co. LLC: What's that mean? Is that like more retail-ready packaging? Is that more stand-up pouches? I'm not sure what your comments refer to.

Yeah. So, it's across the board. There are multiple components. A piece of that is retail-ready packaging. A piece of that is a change in the structure of our laydown bags to be standing up and to have more of an impact from that perspective. So, it makes them easier for consumers to use, allows for much greater shelf impact. And as always, when we look at adding value to consumers, we always look at making sure that we're aligning the price value and getting price realization as we invest more in some of our packaging. Jason English - Goldman Sachs & Co. LLC: Thanks a lot. I really appreciate it.

Thank you. And we'll go next to the line of Robert Moskow from Credit Suisse. Please go ahead. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi. A couple of follow-up questions, regarding the e-commerce strategy, it's encouraging to see the sales up 30%, but I'm having trouble figuring out how to think about the mix impact it might have away from higher margin single serve and maybe more towards Take Home. Have you done any math to determine if this dynamic would shift – would also be a drag on mix? And then, also I think you've said in the past that you can shift spending from one bucket to another to fund all of this e commerce investment that needs to take place, but my concern is that you kind of have to invest in both brick-and-mortar and e-commerce at the same time. Can you elaborate a little bit on those things?

Yeah. So, as you look at e-commerce as a channel, we won a bigger business in e-commerce and on the other hand, we're somewhat fortunate that food and especially condition distribution has been a little bit slower than some other categories. So, we've been able to capture some of the learning that those categories have experienced in terms of really thinking about the packs that we want to sell the price points and what the portfolio looks like in that channel. And I think that is helpful to us as we look at continuing to drive margins. And as we look at the investment in e-commerce, we have really had programs underway to look at how we want to reallocate our resources strategically across the portfolio. So, if you look at the increase in profitability that we have in international, that was a choice to improve profitability to be able to fund some of our other critical strategic initiatives. So, that freed up money. We had a major initiative to reorganize internally to drive even greater commercial value. We took dollars out of SG&A on our corporate functions. And that's another source of funds that we could reallocate. So, what we've tried to do is prioritize all commercial value, which is really bricks-and-mortar and e-commerce as users of funds and then, some of those other areas that I spoke to as sources of funds. Robert Moskow - Credit Suisse Securities (USA) LLC: Got it. Thank you.

Erica, we have time for one more question.

Thank you. And for the final question, we'll go to John Baumgartner with Wells Fargo. Please go ahead.

Thanks. Good morning. Thanks for fitting me in. Michele, just on the international side, the profit recovery has been pretty good, but I'd like to hear more about your vision for the topline. And that, I guess, Brazil and Mexico, India, they're strong, but they're pretty small relative to the U.S. So, do you see Hershey being more of an America-centric business going forward, you lean more on the export business going forward? Is there an opportunity for version 2.0 in China? How do you think about the resource allocation going forward?

So, as we think about the international business, our goal is on driving profitable growth. And as we've talked a little bit about our strategy in the past, we have an algorithm that basically says we want to get about 0.5 point of profitable growth from the international business and I think there is a possibility that could go up a bit over time. Canada and Mexico, our scale markets, where we have scale positions, strong businesses that kind of fit one role in the portfolio. And then, as we mentioned, export is highly profitable business. So, we'll continue to run that to leverage our brands in key markets. And then, we're placing some bets when you look at China and India in particular on the huge growth that's going to incur in the future and is occurring in those markets and really focused on building sustainable business models. And pending the outcome of that, we'll determine how much more investment we put there, but I think it's clear that we feel good that those businesses have gotten to a point where their profitability is very good. And we'll continue to make choices as we see the success on individual bets in those markets.

Just given the experience to Golden Monkey and then, I guess, there's another example of the Bauducco JV elsewhere in the world. I mean what's your appetite for taking on more M&A in emerging markets? I mean do you go with a partner or do you do more JVs? How do you think about that?

I'd say right now that is not our focus for M&A activity. Our focus is in the U.S. market. So, I feel very good about – we have enough scale in Canada and Mexico. And I think that we're making really good progress on our own in China and India, not ruling out any potential strategic partnership going forward, but feeling good about our focus on The Hershey brand, on a higher margin portfolio and local talent, doing all the right things to accelerate our business. And I think we've got good success or good proof points that in the past when we've stuck with that, it has worked for us pretty well.

Thanks for your time.

Thank you all for joining us this morning. I look forward to connecting with you all later today to answer any additional questions you may have.

Thank you.

We'd like to thank everybody for their participation on today's conference call. Please feel free to disconnect your line at any time.