Greetings, welcome to The Hain Celestial Third Quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alexis Tessier, Head of Investor Relations. Thank you. You may begin. Good morning, thank you for joining us on Hain Celestial's third quarter fiscal year 2023 earnings conference call. On the call today are Wendy Davidson, President and Chief Executive Officer, and Chris Bellairs, Executive Vice President and Chief Financial Officer. During the course of the call, management may make forward-looking statements within the meaning of the federal securities laws. These include expectations and assumptions regarding the company's future operations and financial performance. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual events to differ materially from those described in these forward-looking statements. Please refer to Hain Celestial's Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed from time to time with the Securities and Exchange Commission, as well as its press release issued this morning for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The company has also prepared a presentation inclusive of additional supplemental financial information, which is posted on Hain Celestial's website under the Investor Relations heading. Please note management's remarks today will focus on non-GAAP or adjusted financial measures. Reconciliations of GAAP results to non-GAAP financial measures are available in the earnings release and the slide presentation accompanying this call. This call is being webcast and an archive will be made available on the website. Now I'd like to turn it over to Wendy. Thank you, Alexis, and welcome. We're excited to have you on board as our new Head of Investor Relations for Hain Celestial. Good morning, everyone, thank you for joining the call today. This is my first full quarter with Hain Celestial. In the past four months, I've had the opportunity to visit many of our locations across North America and the U.K. to explore our operations and connect with our local teams. I've learned about the market potential of our brands and the growth potential in our categories. I've conducted a robust review of our current performance and outlook with the teams. While the third quarter and end-of-year results will fall below our initial expectations, we understand the key drivers and are taking the necessary actions to address them. Importantly, despite these results, I remain confident that we have a strong portfolio, and as I look ahead, I expect to see continued growth opportunities within our key categories and stabilization in some of our more challenged categories. Looking back at our Q3 performance, top line came in weaker than expected, down nearly 6% year-on-year on an adjusted basis. However, we did see several category and brand bright spots across both North America and international. In North America, two of our largest brands, Greek Gods and Earth's Best, both grew with double digits. Unfortunately, these highlights were eclipsed by softness in the snacks, tea, and personal care categories. Within snacks, the primary driver of our weaker-than-expected top-line results in the quarter was Sensible Portions. The Sensible Portions brand has been trending up double digits fiscal year to date, but trends slowed within the quarter due to competitive spending in brand building and promotion. As you will recall, in 2022, we pulled back on brand building given supply chain impacts on service levels. With the supply chain challenges largely behind us, we are now just beginning to reinvest in brand building and innovation and in-store promotions and are confident in the long-term growth outlook for this brand. The recovery in service levels supported a strong quarter for the Terra Chips brand, growing dollar consumption 17% and gaining share. The ParmCrisps brand performance was down year-over-year as expected, as it was impacted by a significant loss of distribution, resulting in an impairment, which Chris will discuss in detail later. Recent dollar consumption data indicates we have seen an inflection point and return to growth in many of our categories. In particular, in tea, Celestial Seasonings is growing dollar consumption 8% and gaining share. Greek Gods yogurt continues to perform very well. In the latest 12 weeks, the brand's dollar consumption grew 21%, gaining share, reflecting double-digit growth in velocities. Earth's Best dollar consumption grew 4% despite cycling the year-ago formula surge and industry-wide supply issues. Excluding formula, the brand grew dollar consumption 13% with velocities up double digits. Earth's Best snacks dollar consumption was up nearly 50%, driven by growth in total distribution and strong velocity. Overall, Hain snacks dollar consumption grew 2.5% in the quarter, driven by Terra Chips and Sensible Portions. Total distribution for the overall snacks portfolio was up 8%, reflecting continued distribution gains in new margin-accretive channels such as convenience and drugstores. This is an important part of our future growth strategy. Our personal care brand portfolio has been challenged, and we have taken significant steps to stabilize and return the business to profitable growth. In the most recent quarter, we brought in new leadership to turn around the strategy for the business and look forward to sharing more on this in the future. More recent data shows Alba Botanica dollar consumption is improving, and we have a strong sun season planned with robust merchandising, advertising, and earned media to support the promotion of the Alba Mineral line. While North America performance was challenged, international continues to stabilize and improve, primarily in the better-for-you snacking business in the UK, led by Hartley's, and in the non-dairy business in Europe. In the U.K., our dollar consumption growth accelerated, and we gained share in several categories with fresh soup consumption, dollar consumption, up 18%, gaining 2 share points in the quarter and 4 points in the latest 4 weeks. Our better-for-you ingredients, such as jams and marmalades, delivering double-digit dollar consumption growth in the quarter. I'd like to spend a few minutes talking about our fiscal 23 year-over-year projections as it sets the stage for the more strategic conversation as to where our longer-term growth will come from. I'll start with North America. Our overall snacks portfolio for fiscal year 23 is projected to grow high single digits year-over-year, with the exception of ParmCrisps and Thinsters. While we have seen a slowdown in the second half, it has been driven by the pullback in marketing and brand-building spend in the prior year, as well as customer programs that were not repeated this year. We are addressing this with reinvestment support within the quarter, as mentioned on the last call, and we anticipate seeing the benefits begin to materialize in the back half of this calendar year. I'm pleased to report that we have programs in place for a significant increase in distribution on some of our key brands with some of our major customers for the next year. The Earth's Best business, despite lapping the demand surge last year and ongoing supply challenges in formula, is projected to be up high single digits. We are very excited about our Earth's Best business, which continues to resonate with consumers and is demonstrating strong growth in total distribution and velocity. The recently launched Good Food Made Fun brand campaign is delivering above expectations and driving brand awareness and preference. Our Greek Gods brand is projected to finish with mid-teens year-over-year growth, and we are excited going forward because of the service level recovery from a year ago and the strong unit growth in response to the reinvestment in media and promotions. Our tea business is projected to finish down high single digits due in part to the pullback in marketing and brand-building support and the overall category weakness as it lapped a pandemic-related demand surge in the prior year. As a leading brand in the category, Celestial Seasonings was impacted as well. To counter this impact and return the brand to growth, we activated media with our Magic in Your Mug campaign in quarter three and continue to engage with our retail partners on optimizing the assortment and shelf sets. We are beginning to see recovery in the brand returning to growth in the most recent weeks, and the outlook includes new innovation launches and improved distribution at some of our largest customers as we head into fiscal 2024. Turning now to International. The International segment performed broadly in line with our expectations while also improving sequentially across all key metrics. Our business continues to strengthen due to the stabilizing macro environment, our participation in both branded and private label as consumers seek out value, execution of our planned pricing, distribution gains, and improving service. We're encouraged by the stabilization and improvement in the better-for-you snacking business in the U.K., led by pricing and velocities and in the non-dairy beverage business in Europe. The meat-free category is beginning to reset from the accelerated category growth in the past two years and the entrance of new players. We're beginning to see stabilization with private label and meat-free returning to growth. We continue to see improvements in the efficiency initiatives underway across our business. Despite significant inflationary headwinds, the combination of price actions, operational cost management, and robust productivity programs prevented significant margin erosion while protecting core distribution. I will now turn the call over to Chris to share greater detail around the quarter and to discuss our full year guidance. After which, I will share some of the actions we are already taking to drive towards successful outcomes, and as promised, I'll share some of our thinking about our future direction and our focus. Thanks, Wendy, and good morning, everyone. Third quarter consolidated net sales decreased 9.5% versus the prior year period to $455.2 million, inclusive of a $17 million impact from foreign exchange. On an adjusted basis, consolidated net sales decreased 5.8% in the quarter. Adjusted gross margin was 21.4% in the third quarter, a decrease of approximately 160 basis points versus the prior year period, driven by greater pricing and productivity, more than offset by inflation, increased plant deleverage resulting from lower volume as well as negative mix. Adjusted EBITDA on a constant currency basis was $39.3 million, versus $58.7 million in the prior year period. This came up short of our guidance, largely due to the top-line softness in the quarter, accompanied by negative mix and increased trade spend. Including the impact of foreign exchange, Q3 adjusted EBITDA was $37.3 million. Total SG&A came in at 16.5% of net sales for the quarter. Net income for the quarter was a loss of $115.7 million or -$1.29 per diluted share, compared to $24.5 million or $0.27 per diluted share in the prior year period. The loss was primarily related to a non-cash impairment of ParmCrisps and Thinsters' intangible assets. Due to the underperformance of the brands, we conducted a quantitative analysis which resulted in an impairment totaling $156 million, resulting in impact of $117 million after tax. Adjusted EPS was $0.08 versus $0.33 in the prior year period. Increased interest expense accounted for approximately $0.10 of the year-over-year decline, as rising rates as well as a higher outstanding debt balance translated into an incremental $10.2 million in interest expense compared to the prior year quarter. Now turning to our individual reporting segments. In North America, reported net sales decreased 12% to $286.6 million in the third quarter. Adjusted net sales decreased by 10.8% versus the prior year period. The year-on-year decline was a function of previously discussed lost customer promotional programs, baby formula declines as we lapped a prior year demand surge for the category, as well as softer-than-expected results, mainly in snacks and tea. As Wendy mentioned, the slowdown in the growth for snacks was largely a function of a pullback in marketing and brand building support and continued challenges with ParmCrisps, while the tea category continued to show softness and we underperformed versus the category. Q3 adjusted gross margin in North America was 21.9%, a 180 basis point decrease versus the prior year period. Our margin performance reflects inflation, unfavorable volume and mix, and increased trade, partially offset by pricing and productivity. While our supply chain performance has greatly improved versus prior year, the lower volumes additionally drove plant deleverage. Adjusted EBITDA at constant currency in North America was $27.4 million, a $9.9 million or 26.5% decrease versus the prior year period. North America's adjusted EBITDA margin was 9.5% on a constant currency basis, a 200 basis point decrease from the prior year period. In our international business, reported net sales declined 4.9% to $168.6 million in the third quarter. When adjusted for the impact of foreign exchange of $15 million, net sales increased 3.5% compared to the prior year period, representing a 670 basis point sequential improvement from the last quarter. Our year-over-year increase for international adjusted net sales reflects an 8.6% increase in the UK, offset by an 8.4% decline in Continental Europe. The UK increase was driven by strong jams, marmalades, and soup performance, and a continued benefit from the ongoing shift toward private label due to our diverse offerings. The year-over-year rate of decline for Continental Europe moderated once again on the back of further improvement in the non-dairy beverage category performance, new customer acquisition, and private label mix shift within the category, where we have a meaningful presence. International adjusted gross margin was 20.6%, up approximately 160 basis points sequentially on recent pricing actions, productivity, and positive mix. On a year-over-year basis, adjusted gross margin compression continues to moderate meaningfully, with the rate of decline less than half of what we experienced in Q2. Inflation remains elevated. We are seeing signs of stabilization and recent energy subsidies are providing relief as well. International adjusted EBITDA at constant currency was $23.1 million, a 12.6% decrease from the prior year period. As a percentage of net sales on a constant currency basis, adjusted EBITDA was 12.6%, down 230 basis points versus the prior year period, yet up 140 basis points compared to the second quarter, demonstrating continued improvement. Shifting to cash flow and the balance sheet. Third quarter operating cash flow was $29 million versus $31.2 million a year ago. The lower operating cash resulted from a reduction in net income and use of cash for net working capital. As we anticipate generating incremental positive cash flow in the balance of our fiscal year, we would expect resulting cash to be used to pay down debt. CapEx was $7.4 million in the quarter, approximately $1.4 million higher than Q3 2022. We ended the quarter with cash on hand of $44 million and net debt of $813 million, translating into a leverage ratio of 4.6 times as calculated under our amended credit agreement. Consistent with our stated priority for cash, we have reduced net debt by $40 million since the end of the first quarter of fiscal 2023. In light of our Q3 results and updated expectations for the fourth quarter, we are revising our full year outlook for both adjusted net sales and adjusted EBITDA on a constant currency basis as follows. Adjusted net sales decline to be -4% to -3%. Adjusted EBITDA decline to be -15% to -13%. For the fourth quarter, we now expect on a consolidated basis, adjusted net sales to be down low single digits versus the prior year period. Adjusted gross margins to be up year-over-year and sequentially as we continue to benefit from our pricing actions and recognize a ramp in savings from our productivity agenda and supply chain improvements. Adjusted EBITDA at constant currency expected to be approximately $40 million-$44 million. Driven by lower sales volume and increased brand building and organizational capability investments in the quarter, abating supply chain disruptions, plateauing inflationary pressure, and greater benefits realized from planned pricing actions as well as increased productivity. Turning to our segment outlooks. For North America in the fourth quarter, we expect adjusted net sales to decline versus the prior year period, but at a lower rate than Q3, as we realize continued top-line softness in ParmCrisps and personal care, while the ramp-up in our brand-building investments takes hold. We do expect to see Sensible Portions return to growth in the high single digits, though ParmCrisps continues to decline versus prior year, creating a material drag on North American top-line results. North America adjusted gross margins are expected to show improvement when compared to the prior year period. Lastly, constant currency adjusted EBITDA will decline versus the third quarter and when compared to the prior year period as we continue to accelerate brand-building investments, which will support our future growth while limiting EBITDA growth in the near term. For international, we expect the following for the fourth quarter: Adjusted net sales to deliver growth versus the prior year, but at a slower pace versus the third quarter due to new pricing actions net of elasticities as consumers shift between brand and private label. Our diversified portfolio as a significant supplier in both the brand and private label space provides sustained opportunities for growth. Continuous improvements in adjusted gross margins, both versus the third quarter and the prior year period, as we benefit from increased pricing and productivity, offset by challenges due to stranded overhead and mix impacts. Continued improvements in adjusted gross margin, both versus the third quarter and the prior year period, as we benefit from increased pricing and productivity offset by challenges due to stranded overhead and mix impacts. Lastly, adjusted EBITDA on a constant currency basis to grow both versus the third quarter and the prior year period, with margins improving over 500 basis points versus the fourth quarter of 2022. With that, allow me to turn it back to Wendy. Thank you, Chris. While the rest of the year is not where we would like, our detailed review of the business has me optimistic about the future, and I'm focused on setting the company up for future success. We have already started to invest behind our brands and are in the active stages of our strategy assessment and development. I continue to have confidence in the future potential of our brands and our portfolio and our ability to return to profitable growth. Although our starting point is lower than previously believed, and we have work to do to transform the business, we have already made progress building capabilities to drive operating improvements and efficiencies. I'll share a few examples. We're working to simplify and globalize our organizational structure to drive both efficiency and effectiveness. In February, we implemented our new global leadership structure and will be driving alignment and synergies across the organization. We've enhanced our international commercial resources to improve distribution and in-market performance. We've simplified our end-to-end supply chain under a global center of excellence. We have a number of productivity projects underway with a focus on cash flow and balance sheet improvements through improved forecasting and inventory reduction. We're optimizing our office footprint and leveraging a more robust hub-and-spoke model to better enable our hybrid working model. As a result, we exited our headquarter lease in Lake Success and are in the process of finalizing a smaller workspace more closely aligned to our needs and future vision. We are focused on culture and talent, as you can see by the changes we've made to our leadership team. As I mentioned in the last earnings call, we have begun a strategic review of the Hain 3.0 strategy. The process to confirm our where to play choices and clearly define the how to win building blocks is well underway and progressing as expected. While the company simplified its portfolio of brands over the last few years to categories with tremendous potential, we have yet to leverage our scale and our reach to enable the investment in capabilities and brand building necessary to generate sustained performance. We are committed to building a clear path to predictable, achievable, and sustainable top and bottom line growth. We see an opportunity for Hain to blend aspects of traditional CPG growth models with those of smaller, disruptive brands to enable the growth of our better for you portfolio while harnessing the power of our operational scale. You've heard me refer to this as out-smalling the big and out-bigging the small. We have several core assets to leverage to achieve our potential, including a strong portfolio of brands, 2/3 of which are number one or number two in their categories. We're in attractive categories and geographies with better-for-you tailwinds and a committed organization that is aligned to our purpose to inspire healthier living. The key to unlocking more value for our shareholders is based on a few core tenets: taking a consumer-centric approach to driving growth, executing with commercial and operational excellence, expanding our reach to be where the consumer is shopping, generating the fuel needed within the organization to invest for growth, and building a high-performance growth-mindset culture. Importantly, we will work to balance the pacing and sequencing of investments needed in capabilities, categories, and brands with the growth and margin to deliver performance. As we work to pivot the company from shaping the portfolio to accelerated growth, our efforts will center on clarifying our focus with a balance between short-term urgency and long-term capability. As we live our company purpose to inspire healthier living, we are committed to grow our people, grow our brands, grow our business, and grow our impact. These tenets will underpin our strategy and our long-term growth framework, which we look forward to sharing early fall at our Investor Day. I'd like to turn it back to the operator to open the line for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that you limit your questions to one and a follow-up so that others may have an opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Andrew Lazar with Barclays. Please proceed with your question. Great, thanks. Good morning, everybody. Good morning. Good morning. Hi. Wendy, you mentioned just before, balancing the pacing and sequencing of sort of reinvestment spend. I guess I'm just trying to get a sense of whether you think that the lower 23 base could allow Hain to grow profitability at a maybe a more normal cadence in fiscal 2024. Do you think profitability, you know, should our expectation be profitability is still likely somewhat more muted in 2024 given, you know, some of the reinvestment you need to do and the timeframe sometimes, around, you know, the business responding to reinvestment takes a bit more time. I guess what I'm getting at is 2024 potentially also a likely, somewhat of a transition year? Yeah. I appreciate the question, and I know there were some questions in the last conference call about what I meant by reinvestment in the brand. Let me frame it for 23 and then provide a little outlook on what I think that means for longer term. In 23, you know, we mentioned that we pulled back spending in 22. In 23, we actually didn't spend much marketing or promotional dollars in Q1 or Q2, so we backloaded. Our actual year-on-year spending in marketing in 23 is about equivalent. It's actually slightly below what the entire spend was in fiscal 22, but it's backloaded into fiscal 23. On a year-on-year basis, you'll see it relatively flat. We expect to start seeing, in fact, we have in recent weeks some response in market to some of the new campaign activity and some of the distribution gains. Our intent in this pacing and sequencing is that we're able to invest as we go, rather than investing with the hopes that it will start to bear fruit 6 months later. That's what we mean by this pacing and prioritization. My intent is that we aren't taking a giant step back in margin, but that we're actually able to fund it going forward. We feel good about what we have in the productivity pipeline. In this year, we actually delivered more in the productivity pipeline than we planned. Unfortunately, it went to offset deleverage in the plants from the volume that came out, and so we'll sort of balance that as we go into the next year. I hope that helps clarify. Yep. Thanks so much. Appreciate it. You bet. Our next question comes from Ken Goldman with J.P. Morgan. Please proceed with your question. Hi. Thank you. Wendy, I realize you went around for the acquisition of ParmCrisps and Thinsters, but today Hain wrote down over half the purchase price. It wasn't that long ago. Just taking a step back, you know, hindsight's always 20/20, of course, but as you see it, you know, what do you think the error was made, if there was one, from Hain? Was it just a case of bad timing, you know, private label taking share in this category as prices rose? I'm just trying to get a sense of, you know, what do you see in Hain's internal processes for future M&A so that the next deal, whenever it does take place, and I imagine it's a little farther down the road, you know, is a little more successful than the last one we just saw. Yeah. Good morning, Ken. You know, it's always tough to Monday morning quarterback and look back on decisions that were made, but we have spent a fair amount of time scrutinizing the assumptions that went into the acquisition and what has happened and transpired since. Here's what I will tell you that we believe we got right. We believe in the better for you snacking category, absolutely. This was a play in better for you snacking, certainly in high protein. All of the consumer trends from that standpoint were correct. Where we potentially got it wrong, and were probably in two ways. One is the reliance on keto as a diet relative to ParmCrisps and the subsequent decline in the keto category. That gave some consumer headwinds that probably weren't as acutely anticipated at the time of the acquisition. The other is customer and channel concentration, which I believe was actually. I know internally it was outlined. I think the thought was that the pacing of channel expansion would happen faster than the potential risk of channel concentration. Those two things were actually opposite. What you're seeing right now is a factor of sort of recognizing where the brand sits today. I would also say. We're resetting the base for ParmCrisps. Our outlook and actually our growth outside of that customer concentration has been good. We feel good about the brand going forward. We're just resetting a new starting point rather than anticipating, you know, recovery of that large customer concentration from before. Hope that helps. No, that's very helpful. Thank you. I wanted to ask a quick follow-up. You mentioned that you're starting to see some brands react nicely to some reinvestments, which is great to hear. How do we think about what to look for in terms of the data that we get in terms of, you know, syndicated information? What I'm asking for is should we really expect to see some kind of uptick or acceleration in consumption or at least visible consumption? Or is it, you know, a case where, hey, maybe that doesn't measure quite enough of Hain's U.S. business to be meaningful? I would say a couple of things that you'd be able to see in the syndicated data. If you look at the drags in quarter three in North America in particular, you'd see a year-on-year drag in some of the categories or some of the brands inside personal care. You'd see a drag year-on-year in the, That's How We Roll. You can see those data points. You'd also see the growth in TERRA, you'd see the growth in Sensible across the measured channels. I would look at the total distribution points because where we're actually seeing some improvement in the brands responding to the reinvestment is picking up distribution and assortment in market. You can look at the velocities, and you'll start to see where the consumer, the shopper is responding to the investments in that in aisle activation. I actually from a food drug mass, a little bit inconvenience, you'll be able to see where you'll see some of that recovery. Thank you. Our next question comes from Michael Lavery with Piper Sandler. Please proceed with your question. Thank you. Good morning. Good morning. I just wanted to come back to the spending color a little bit. I know you just touched on this, but you mentioned in the release that you've begun reinvesting. I guess just mindful of the timing within the year and normal budgeting cycles, can you help us understand? It sounds like maybe there's some ad hoc adjustments, and you've added some spending, perhaps. Is it right to think that with the fiscal 2024 budget, or you know, year starting July 1, that it could be a different picture? I guess I wanna understand a little bit of the invest as we go versus laying out a roadmap that covers the spending you think probably is needed for next year. Yeah. Thanks for the question. I would say we have sufficient fuel inside the P&L today to be able to invest behind the categories and the brands of focus. What you see as the driver in fiscal 23 is a move from almost no spending in the front half of the year to all of the spending in the back half of the year. It isn't just in absolute dollars, it's also the quality of the investment. We've taken a hard look at in marketing, for instance, our working marketing spend versus our non-working, and those ratios were a bit upside down in the past. We're leaning more into working marketing and working media. On the trade side, we're also doing the same thing on our shopper programs and on our trade activation, working trade rather than non-working trade. Using it to drive distribution, using it to drive velocity of the core brands and categories. As we, and I think we talked about this actually in our investor conversation a few months ago, this channel expansion. As we lean into channels of growth, those are margin accretive channels. Those points of distribution actually generate more fuel than other maybe more traditional Hain channels of focus. The combination of how we use the dollars we have today, as well as where we drive growth to generate fuel going forward, the pacing of that should enable us to invest around our growth. Okay. That's helpful. Thank you. Just a follow-up on ParmCrisps. The difference between what we see in the scanner data and the shipment number certainly seems to be partly related or very much related maybe to the distribution loss. Can you just give us a sense of timing? Basically, is there three more quarters of this that we should be modeling in when we think about the North America top line? That's exactly the way to think about it, Michael. As we got into this year, we had an okay first quarter on ParmCrisps, and then things turned more challenging. As you say, we're a couple of quarters into that as we sit here today and a couple more quarters to go. Okay, great. Thanks so much. You bet. Our next question comes from Matt Smith with Stifel. Please proceed with your question. Hi. Good morning. Good morning. I wanted to ask a question about the increased level of investment in the second half of the year. I realize some of that is phasing relative to the prior year. When we look at the gross margin performance in the quarter, pricing and productivity was not enough to offset inflation, again, just here in the third quarter. When we think about margin going forward with this increased level of investment, do you expect pricing and productivity to the contribution there to increase, and you get to a place where you're offsetting inflation and therefore margins are expanding? Perhaps your inflation is starting to taper, and there's less inflation as we move forward? Just a little color there would be helpful. I'll start and then have Chris add a little bit of color. When we look at quarter three versus prior year, the pricing actions that we took across the business were fairly sufficient to cover what we saw in inflation. The challenge we had was while the elasticities were below one, there still were some volume impacts, and that came out of our plans, and as Chris mentioned in his remarks, led to some deleverage. That deleverage drove some incremental costs that had to be absorbed, and that's really where our productivity ended up being used instead of being able to be used as fuel to support the growth of the business, which was sort of the original intent. As we look forward, while raw material inflation may subside and a bit on the energy side, we still see labor rates, and I think you've probably heard that from others as well, that's still elevated. We'll have those two things as offsets. We think that where we're seeing the volumes come back around, we'll see less of a price elasticity impact, and it'll allow the productivity pipeline to be able to be used for growth. Matt, a couple of data points. First, recall we did see the good gross margin progression in the first half of the year, so second quarter better than first quarter. I, you know, I'd characterize the third quarter gross margin as being a little bit of an anomaly. There were some non-working trade things that hit in the third quarter. We had negative mix that we didn't anticipate, as the tea business was a little softer than was our original guidance. The gross margin you saw in the third quarter, a bit lower than we would have expected, of course. We do see a pretty nice recovery in gross margin in the fourth quarter. Yeah, I mean, I think at the end of the day, the gross margin progression will step back up again and you'll see that as a very healthy opportunity for us to offset the investment increases that we're gonna make. Okay. Very helpful detail there. I'll pass it on. Thanks. Our next question comes from Jon Andersen with William Blair. Please proceed with your question. Good morning. Thanks for the question. Wendy, you mentioned you kind of pivoting or working through the strategy to pivot from simplification of the portfolio to kind of a re-acceleration, profitable growth. I'm wondering, though, if you're also, you know, looking at the portfolio, taking a step back and looking at the portfolio on aggregate, and are there, you know, bigger picture decisions around, you know, core, perhaps non-core businesses and more work potentially in the future in terms of restructuring, you know, either larger or smaller parts of the business on a category by category basis or brand by brand basis that are also in play? Thank you. You bet. We're approaching the strategy work like everybody probably does, where you begin with where we play and specifically where we have a right to win and what it will take to bring that to life. I like the categories that we're in, and I like the geographies that we're in. Both offer opportunities for upside without the need for incremental acquisitions to be able to fuel the growth. That said, we're not set up to fully realize the potential of what we could do in those categories. That's the work that we're undertaking, is looking at how do we leverage our reach and scale to be able to get our fair share in the higher growth parts of the better for you categories. How have we invested behind the things that customers and channels would expect us to have around insights and consumer focus? How robust is our innovation pipeline? Are we able to leverage innovation across our markets so that we're not doing those in isolation? I think in the past, Hain was structured largely by brand, by category, and didn't allow you to leverage synergies or scale and reach. That's where we're really looking, is less about overall company portfolio shaping and much more around operating model and organizational shaping that I believe can unlock efficiencies we can then invest behind growth. That's helpful. You mentioned a number of changes that you've already made from the, I guess, the new global leadership structure to some commercial resource enhancements in the international business and I hear a global COE for supply chain. You know, just in aggregate, what are your expectations regarding, you know, productivity, say, on an annual basis? It seems like that's gonna be a key part of, to your point, providing the fuel for the reinvestment that you're planning to do in demand generation activities. I think historically, Hain has talked about maybe $50 million a year in productivity. Are you willing or able at this point to kinda give us some context around that? Thanks so much. Yeah, absolutely. I would say that $50 million number is about right for what you would expect in ongoing run rate productivity that can offset inflation, offset cost impacts, those things. What we're actually looking at over the next couple of years that we'll roll out in Investor Day this fall is probably much more of a large scale end-to-end restructure that will help us unlock some bigger buckets inside the P&L that will enable us to get to a margin structure that can sustain continuous investment behind the brands. What we've found, if you look back over the last couple of years, is some of our brands had no investment and some had very little, or it was episodic. We need, in some of our categories, to have more of an always-on sustained support, but to do that, we need to make sure that we are sweating the middle of the P&L, so to speak, so that we're able to free up that kind of fuel, both to pay down debt, but also to be able to reinvest back in the foundations of the company. Makes sense. Thank you. You bet. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Alexia Howard with Bernstein. Please proceed with your question. Good morning, everyone. Good morning. Can I ask about the plans for bringing down the leverage? Given the downgrade of guidance this time, it looks as though it's gonna be well above 4 times, probably, in the higher end of that sort of 4-5 range. How quickly do you think you can start to turn the corner on that as we get into fiscal 2024? I assume that repaying debt is the main priority for uses of cash at the moment. Indeed it is. As we've said on this call and the last call, Alexia, it remains our priority. You saw in my prepared remarks the progress that we have made since earlier this year. The plan is twofold. We're going to continue to focus on EBITDA growth, and that helps a part of the calculation, and then we're gonna continue to focus on net debt reductions, both through free cash flow and through continuing to improve our working capital position. We've identified opportunities within working capital. We've got work plans in place today to take significant amounts of inventory out of the system, and that, of course, will go directly to reducing net debt. As I've said before, my forecast has always been that leverage was gonna peak in the third quarter of this year, and then as we get into more favorable overlap on the EBITDA side of the calculation and continue to reduce net debt, we will begin to see leverage come down over the next several quarters. Let me add a little bit of color around that. As we looked at some of the investments that we've made around our operating model, I think we mentioned in the last call that we've made some investments around end-to-end forecast and forecast management. Last year, we had significant supply chain issues and service level problems. We went into this year with a focus on fixed service level first, fixed inventory later. That's part of what you're seeing in that working capital number is we're sitting on more inventory than we're comfortable, but we wanted to make sure that we were assuring supply in the marketplace, so we could recover from the service levels of a year ago. Actually in the recent data that we've seen from IRI, we actually have top-tier service levels across our categories and our channels of focus. We're delivering on our customers' expectations. That allows us to now focus on demand forecast models and reducing both raw and packed, but also finished goods inventories, so we can get that working capital down. As Chris said, we've got active work teams focused against that now. Great. Thank you. Maybe as a follow-on question to that. One theory is that because you have smaller brands and you're more sort of focused in the higher end, that the supply chain and service level disruptions hit you guys harder than companies with the more mainstream CPG with bigger brands, et cetera. Are you through a lot of that service level and supply chain disruption? What sort of innings are we in in terms of getting back to normal? Is that all pretty much now behind us at this point? Yeah. It's pretty well stabilized. We still have a couple of hot pockets that we're working on, I guess is the way I would say. We've talked about this before, I think, industry-wide around formula. The baby category continues to be a challenge for everyone in this space. There's a few areas where we wanna make sure that we've got redundant suppliers of packaging materials and redundant contingency production locations to assure supply without some dependency on a few. Some of that work is still in play, but it's not affecting our service levels other than really on the formula side. Great. Thank you very much. I'll pass it on. You bet. Our next question comes from Anthony Vendetti with Maxim Group. Please proceed with your question. Thanks. Yeah, I was just wondering, Wendy, if you could talk a little bit about pricing, you know, with the lower sales, do you think some of the pricing in this environment finally started to catch up? On the gross margin side, was that just increased input costs, supply chain costs, or was it just a result of lower sales trying to cover the same fixed cost? Yeah. I'll start and talk through pricing and let Chris cover the margin question in a bit more detail because some of that has to do with mix. Relative to pricing, we feel like we've actually taken the right amount of pricing to cover for what I would say is more permanent inflation rather than transitory. What we wouldn't want is to take so much price that we then have to trade back or we have to pull ourselves back. We actually feel very good with where we're at. I think you've probably heard us mention in the past, prior to my joining, what's great for Hain is we tend to be in categories where the consumer is shopping, but we also tend to be in the premium part of those categories, but at the entry point price point of that. A little less price-sensitive consumer, and we tend to be the entry price point for somebody who wants a better for you option to traditional categories. It's actually a really great place for us to be, and I think the team's been really smart and thoughtful about pricing to take as much as was needed, but not to take too much that it would cause future challenges to be able to sustain. Anthony, on the gross margin question, the shape of the curve is actually consistent with our original plan. We did expect that the third quarter would step down a little bit from the second quarter in our original plan for the year. It stepped down a little bit more than what we had anticipated and largely due to three reasons. I think you named two of them. There was lower volume, which led to some plant deleverage across the system. There was negative mix, as I mentioned earlier. Then the third one, and I think I mentioned this earlier to an earlier question as well, there were some non-working trade items that hit in the third quarter that we don't expect to repeat going forward. All of those things conspired to drive gross margin in the third quarter a little lower than what we expected. Consequently, we do see it recovering pretty nicely in the fourth quarter. Okay, thank you very much. Appreciate it. You bet. It appears there are no further questions at this time. I would now like to turn the floor back over to Wendy Davidson for concluding comments. I wanna thank you all again for joining us today to review our third quarter performance and updated fiscal year outlook. In these first few months, I've seen firsthand the capabilities of our supply chain and the attention to quality, service, and safety. The strength and potential of our brands, the passion of our people, and the opportunity for scale in our business is impressive and exciting. I'd like to thank the entire Hain team for their energy and their engagement. I look forward to seeing and speaking with many of you in the coming weeks and the Investor Day in the fall. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.