Good morning, and welcome to the Hormel Foods First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question during this time, simply press star then one on your telephone keypad. If you would like to withdraw your question, please press the star then two. Thank you. Please note this event is being recorded. I would now like to turn the conference over to David Dahlstrom, Director of Investor Relations. Please go ahead, sir. Good morning. Welcome to the Hormel Foods conference call for the first quarter of fiscal 2023. We released our results this morning before the market opened, around 6:30 A.M. Eastern Time. If you did not receive a copy of the release, you can find it on our website at hormelfoods.com under the Investor section. On our call today is Jim Snee, Chairman of the Board, President, and Chief Executive Officer, Jacinth Smiley, Executive Vice President and Chief Financial Officer, Deanna Brady, Executive Vice President of the Retail segment. Jim will review the company's first quarter results and give a perspective on the rest of fiscal 2023. Jacinth will provide detailed financial results and further commentary on our outlook. Deanna will join for the Q&A portion of the call. The line will be open for questions following Jacinth's remarks. As a courtesy to the other analysts, please limit yourself to one question with one follow-up. If you have additional questions, you are welcome to get back into the queue. At the conclusion of this morning's call, a webcast replay will be posted to our investor website and archived for one year. Earlier this week, we filed a Form 8-K with the U.S. Securities and Exchange Commission that included supplemental segment financial information for fiscal years 2021 and 2022 related to the Go Forward initiative. We have posted a copy of the Form 8-K to our investor website, investor.hormelfoods.com. Before we get started, I need to reference the Safe Harbor statement. Some of the comments made today will be forward-looking and actual results may differ materially from those expressed in or implied by the statements we will be making. Please refer to our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, which can be accessed at hormelfoods.com under the Investor section. I will now turn the call over to Jim Snee. Thank you, David. Good morning, everyone. With the release of our recast financial information earlier this week, our transition from a structural and reporting perspective is now complete for the Go Forward initiative. I want to take time to acknowledge the immense amount of work the entire team has put in to transition the business to our new strategic operating model. We have spent time discussing the strategic rationale and how our actions over the past decade have positioned us for Go Forward, but there has been a lot of blocking and tackling that had to take place first to get us to where we are today. Over the past six months, we stood up three new business segments and consolidated the Jennie-O Turkey Store segment. This included organizing the retail segment into six distinct verticals and combining the foodservice businesses across the enterprise. We invested in new centers of excellence, including Brand Fuel and a dedicated FP&A team. We made changes to the administrative side of the business to recast the financial statements, align and structure our entities and duties, maintain controls across the business, and of course, operate our business without interruption. We have learned a lot about our people, processes, and technology going through this transition. While we have work to do in all of these areas, I am encouraged by the conversations that are taking place across the organization. The operating environment remains challenging, and while many areas of the business performed ahead of last year during the first quarter, our results were disappointing and below our expectations. From a top-line perspective, demand from consumers and operators generally remained elevated in key categories, and we delivered balanced growth between volume and price across many parts of our portfolio. We continued to see elevated demand for many of our center store, refrigerated, Mexican, and premium items at retail, including Black Label Bacon, Columbus charcuterie, Hormel Chili, Hormel Pepperoni, Applegate breaded chicken, HERDEZ products, SQUARE TABLE entrees, and MARY KITCHEN hash. Likewise, solutions-based items in our foodservice segment had another strong quarter, with volume growth in sliced meats and from brands such as CAFÉ H, Fire Braised, Bacon 1, and Austin Blues. For the quarter, sales declined 2%. As a reminder, there continues to be volatility in our overall volume and net sales results given the planned volume declines in commodity pork and the volume impacts across the turkey supply chain due to highly pathogenic avian influenza, or HPAI. Diluted net earnings per share for the quarter was $0.40, a $0.04 decline compared to last year. Our results reflect the persistent impact from inflationary pressures, supply chain inefficiencies, and lower sales volumes across each of the business segments. Now turning to our segments. Results in the retail segment declined compared to last year. Net sales growth from the bacon, global flavors, convenient meals and proteins, and emerging brands verticals was offset by lower sales in the value-added meats and snacking and entertaining verticals. Segment profit declined as the benefit from pricing actions across the portfolio, higher equity in earnings from MegaMex, and improved results for the bacon business were more than offset by the impact from lower net sales, unfavorable mix, and higher operating costs. The bacon vertical delivered outstanding results in the quarter due to elevated demand for our Black Label items. There was also a benefit from commodity relief in pork bellies throughout the quarter as we worked through higher cost inventory. This is a category where we have made significant investments and one we expect to show growth for the year. Similarly, the global flavors vertical, made up of our MegaMex business, had an excellent start to the year. The pricing actions that we have taken across this business to combat inflationary pressures, coupled with commodity relief on avocado inputs, led to revenue and equity and earnings gains for the quarter. The emerging brands vertical delivered volume and sales growth for the Applegate brand, led by frozen breaded chicken and wall deli items. The convenient meals and proteins vertical achieved another quarter of net sales growth led by Hormel Chili, SQUARE TABLE refrigerated entrees, and MARY KITCHEN hash. In addition to a benefit from pricing actions we implemented last year, we will have new capacity for SPAM items beginning in the second quarter. In addition to supporting our highest selling products in the category, this new capacity allows us to restore assortments, introduce new flavors such as maple, and relaunch our 7-oz SPAM item after a three-year hiatus. This provides excellent value for consumers seeking a more affordable option in the category. SKIPPY Peanut Butter sales for the quarter were significantly behind last year. Last May, when we made the decision to relentlessly support our customers and the peanut butter category, we knew it would pressure inventory levels and have lingering impacts into fiscal 2023. This was the right decision for all stakeholders, and our team deserves credit for growing the peanut butter category and making the product readily available for our customers and consumers when they needed it. Demand remains robust for the SKIPPY brand and the category, and we are working diligently to maximize capacity and return inventories and fill rates to normalized levels. Net sales declined for the snacking and entertaining vertical as growth for the Columbus and Hormel Pepperoni brands was more than offset by a year-over-year decline in the snack nuts business. The final vertical, value-added meats, was most heavily impacted by lower commodity pork and turkey availability, leading to net sales declines. In the food service segment, products in the sliced meats, pepperoni, premium prepared proteins, and premium bacon and breakfast sausage categories grew volume and net sales for the quarter. Like retail, the overall decline in volume was driven primarily by limited turkey and fresh pork availability. Segment profit increased for the quarter due to improved mix across the portfolio. Results for the segment were below our expectations, reflecting industry softness from mid-December into January. However, we have seen a sharp rebound in orders to begin the second quarter and are confident in our ability to grow the business this year. Finally, the international segment was heavily impacted by external factors during the first quarter. From a top-line perspective, our branded export business had a strong quarter led by the SPAM and SKIPPY brands. We also saw another quarter of improved results in Brazil as the team continues to focus on its premium products and food service strategy. Commodity turkey volumes declined almost 80% compared to last year due to restrictions on turkey exports and limited supply as we strategically diverted raw material to support the domestic business. Our team in China faced incredibly difficult operating conditions throughout the quarter as the impact of COVID-related policy changes had dramatic short-term effects on the business as well as our employees, customers, and operators. Taken together, the impact from lower turkey exports and disruption in China represented a more than $0.01 earnings per share impact on the quarter compared to last year. We are seeing improvement in China to begin the second quarter, especially in our foodservice business. As conditions normalize, we expect our China business to resume delivering accelerated growth. During the quarter, we purchased a minority stake in Garudafood, one of the largest food and beverage companies in Indonesia. This investment supports our international growth ambitions and the global execution of our snacking and entertaining strategy. Garudafood is a market leader with strong and reputable brands, local expertise, and a best-in-class distribution network. We have been partnering with the Garudafood team for several years, and this strategic investment enhances that partnership. Jacinth will provide the financial details of the transaction later in the call. As we disclosed earlier this morning, we are reaffirming our top-line expectations and reducing our diluted net earnings per share outlook for fiscal 2023. Our top line remains healthy, and despite softness in the first quarter, we are on track to deliver growth for the year. Demand for our leading center store and refrigerated retail brands remains favorable. The foodservice segment expects strong growth for remainder of the year, and we anticipate the near term challenges impacting the International segment to abate over the coming months. Compared to our expectations heading into the year, earnings are being pressured by inefficiencies across the supply chain, persistent inflationary pressures, and softness in the snack nuts category. I want to detail how we plan to address each of these challenges for the balance of the year. First, I would like to discuss the state of our supply chain. It is important to note that we have made progress over the last year staffing our facilities, expanding production capacity, and improving fill rates for each of our businesses. This has allowed us to catch up to demand in most categories and further supports the confidence we have in our revenue outlook for this year and longer term. Since the fall, we have been operating with elevated inventories due to our efforts to increase production, optimize plant performance, and return fill rates to historical levels. We expected this inventory to clear during the normal course of business. This has not happened, and in fact, we have seen inventories continue to grow in a number of areas. This has resulted in inefficiencies across the supply chain and higher operating costs. We are taking immediate action to combat these inefficiencies by focusing on selling excess inventories and reducing the reliance on third-party warehouses and co-packers. These actions are expected to cause short-term margin compression, but they are necessary as we look to restore profitability to normalized levels and reduce complexity. Simply said, after almost three years of chasing unprecedented demand, our ability to supply our customers, consumers, and operators caught up to, and in some cases, began to exceed demand, and we needed to react sooner. Rectifying the inefficiencies caused by elevated inventory levels is the top priority in the company. Second, we continue to operate in a volatile, complex, and high-cost environment, and cost pressures remain high. Our retail businesses, especially in the center store, continue to be disproportionately impacted by high inflationary pressures, and the pricing actions we have taken over the last 18 months still lag inflation. To help mitigate some of this pressure, we have announced additional inflationary justified pricing actions in certain retail categories effective late in the second quarter. We are evaluating further pricing actions. As we've said, our teams remain highly focused on the long-term needs of the business and protecting the equity of our brands. For the remainder of the year, we believe we can stabilize these margin pressures through a combination of pricing actions, operational cost management, and supply chain cost savings initiatives. Third, after meeting expectations last year, our PLANTERS business is off to a slower than expected start in 2023. There are numerous factors at play, including general category softness, a consumer shift away from certain higher priced items, production challenges, and timing issues. We are taking immediate action to address the current challenges, stabilize the top line, and grow the consumer base. Beginning in the second quarter, we are shifting resources to drive consumption. This includes increasing promotional support and prioritizing peanut items and pack sizes aimed at value-seeking consumers. We are bringing much needed innovation to the category with flavored cashews and several new CORN NUTS flavors. We're expanding assortments as we continue to gain distribution for the brand, and we are investing in capital for higher growth items that are relevant for today's consumer. Long term, we remain fully committed to the PLANTERS brand and the snack nuts category. This business is at the center of our snacking and entertaining strategy, our ambitions to grow in the convenience store channel, and as we look to become even more balanced as a company. We know what we need to do to change the trajectory of this business, and our teams are focused on accelerating the pace of that change. Considering these factors, we expect full year net sales growth of 1%-3% and diluted net earnings per share of $1.70-$1.82 per share. While we have work to do the rest of this fiscal year, we cannot lose sight of the progress we have made over the last two years. We are a significantly larger company today, 30% bigger, in fact. We are a more balanced company through the products we sell and in the ways we reach our customers, consumers, and operators. We have transformed our company not only through the Go Forward initiative, but with the investments we have continued to make in technology, capacity and capabilities. We have made all of this progress while simultaneously navigating a dynamic and volatile environment and managing through the impacts of HPAI. Our brands remain vibrant and relevant, our strategies remain effective, and our business is positioned for long term growth. At this time, I will turn the call over to Jacinth Smiley to discuss detailed financial information related to the first quarter and additional color on key drivers to our outlook. Thank you, Jim. Good morning, everyone. Net sales for the first quarter were $3 billion, a 2% decline to last year. Planned lower commodity pork and turkey volumes were the primary drivers of the decrease in net sales. We have now lapped our new pork supply agreement as of January, and turkey supplies have improved since the fall. We anticipate more normalized volume comparisons for the remainder of the year, barring a return of HPAI in the spring. First quarter gross profit was $496 million compared to $539 million last year. Gross profit margin declined 100 basis points as the impact from pricing actions was more than offset by unfavorable mix and persistent inflationary pressures. For the first quarter, SG&A expenses as a percent of net sales increased marginally to 7.5%. The company continued to support its leading brands through advertising investments. Advertising expenses were $47 million during the quarter comparable to last year. Of note, we promoted Black Label Bacon over the holiday season, and the PLANTERS brand was once again front and center at this year's big game with the roast of Mr. Peanut. Equity and earnings of affiliates for the first quarter increased significantly compared to last year due to improved results for MegaMex and our joint venture in the Philippines. Operating income for the first quarter was $289 million compared to $320 million last year. Operating margins compressed to 9.7% compared to 10.5% last year. Net unallocated expenses in the first quarter increased $7 million. This increase was driven by higher employee-related expenses and outside consulting fees. The effective tax rate for the quarter moved modestly higher to 22.6% compared to 22.4% last year. Last year's rate reflected higher stock option exercise benefit. The effective tax rate for fiscal 2023 is expected to be 21%-23%. The net result of all these factors was diluted net earnings per share of $0.40. Turning to cash flow, operating cash flow was $204 million for the first quarter compared to $384 million last year. This decline was driven by lower net earnings and an increase in working capital. As Jim mentioned, we purchased a 29% common stock interest in Garudafood, a leading food and beverage company in Indonesia. We obtained the minority interest from various shareholders for a purchase price of $411 million, including associated transaction costs. The transaction was funded using cash on hand. We do not expect the transaction to have a material impact on our fiscal 2023 results. We are targeting $350 million in capital expenditures for 2023. In addition to the newly commissioned SPAM product line, we recently approved a $40 million expansion for our Columbus line of premium charcuterie products and additional capacity for higher demand PLANTERS items at the Fort Smith, Arkansas facility. We also continue to invest heavily in automation projects, as evidenced by a recently completed project supporting turkey processing at the Faribault, Minnesota facility. The project automates more than 30 difficult, highly repetitive jobs at the plant, further aiding our efforts to improve employee retention and satisfaction. We paid our 378th consecutive quarterly dividend effective February 15th at an annual rate of $1.10 per share, a 6% increase over last year. We ended the first quarter with $3.3 billion in debt, unchanged from the prior year. We remain committed to maintaining an investment-grade rating. As Jim detailed, we have lowered our diluted net earnings per share outlook for the year and have action plans in place for the balance of fiscal 2023. In terms of cadence for the year, we expect diluted net earnings per share in the second quarter to be significantly lower than last year. We expect unfavorable mix in the retail segment, short-term margin compression due to our immediate actions across the supply chain, and for continued COVID-related disruption in China to negatively affect the second quarter. We are also not expecting a repeat of last year's lower effective tax rate. As we look to the second half of the year, we expect earnings growth compared to last year, led by the foodservice and international segments, gradual improvement in the cost environment, and higher turkey volumes. We are beginning to see signs of market stabilization and even cost relief in certain areas such as raw materials and freight. As anticipated, prices on key protein inputs generally declined during the quarter compared to last year and the fourth quarter. The USDA composite cutout declined 19% compared to the fourth quarter and was 2% lower than last year. This decrease was driven primarily by bellies, which declined 26% compared to last year. Higher cost inventory was generally a headwind in the first quarter and will continue to affect results as we work to reduce inventories. We have assumed a benefit from lower raw materials costs in the back half of the year. Similarly, we saw a more balanced freight environment during the first quarter as demand for trucks moderated. We expect freight rates for the remainder of the year to be lower compared to last year. In addition to the actions we are taking to address inventory levels and inflation, our teams remain focused on identifying and capturing cost savings opportunities as supply chain conditions normalize. HPAI remains a significant risk facing the business. While the last reported case in our supply chain was early December, the virus continues to impact domestic poultry supplies. There is increased risk to our supply chain into the spring as migration begins along the Mississippi Flyway. Assuming current conditions hold, reduced production volume in our turkey facilities is expected through the end of the second quarter before steadily improving in the back half of the year. This should be supportive of our turkey business as demand for Jennie-O turkey products remains strong. Turkey markets have become less favorable as breast meat prices have steadily declined over the last month. Additionally, historically high feed costs remain a headwind for our business. Considering these factors, we expect improved meat availability in the back half of the year to drive higher sales volumes for our turkey business, offsetting the impact of market declines and higher feed costs. Additionally, we made significant progress towards fully integrating Jennie-O Turkey Store into the company's One Supply Chain and new operating segment during the first quarter. We remain on track to achieve $20 million-$30 million of savings on a run rate basis by the end of the fiscal 2023. As noted, last quarter, there were incremental investments planned against One Supply Chain and Go Forward. Our new business model demands this, Our strong financial position allows us to continue investing for the long term. In closing, I want to acknowledge the demanding work of all the teams across the organization to make the Go Forward initiative possible. I remain confident that once fully implemented, our new strategic operating model will better align the businesses to the needs of our customers, consumers, operators, and shareholders to deliver sustainable long-term growth. At this time, I'll turn the call over to the operator for the question and answer portion of the call. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press the star followed by the two. If you are on a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. The first question comes from Rupesh Parikh of Oppenheimer. Please go ahead. Good morning, thanks for taking my question. To start out for us, you know, the report today is not really consistent with what we typically see from Hormel. What happened, what are the key efforts from here to improve performance? Good morning, Rupesh. You know, we agree with you. You know, the word that we used is we're disappointed, and these are not results that we expected. You know, I do think it's important that even with that disappointment to remember, you know, just how far we've come with our supply chain and everything they've been through over the last three years. You know, we go back to obviously the COVID impact when plants were shut down, and we didn't have labor, and then when we did have labor, it was turning over. We are in a more stable operating environment for sure. You know, fill rates continue to improve, labor is better, and, you know, production capacity across key categories for us is good. You know, but as we think about quarter one, you know, that, you know, in the context of this dynamic and volatile environment is a bit more explainable. You know, we talked about China. That's easy to understand. You know, food service had, you know, a period of softness, but, you know, their business continues to be strong and will stay strong for the balance of the year. We mentioned PLANTERS, which, you know, we met our expectations last year but are seeing a slower start this year, and we know what we need to get done there. On, you know, avian influenza, still battling that. You know, we've said since the fall we've been operating with elevated inventories. We wanted to get fill rates up. You know, we needed more inventory to support our expanded network. You know, the big thing here is probably a misalignment of our inventory and our demand because we expected the inventory to clear. It didn't, and it hasn't, and it's resulted in inefficiencies across the supply chain and higher operating costs when we think about product in warehouses and probably moving it more than we had expected. Those are real dollars that impacted us in the quarter. You know, the other thing is, you know, we wanna be careful when we talk about inventory. Because as we progress throughout the year, it's not going to be as simple as just looking at a dollar amount to gauge how we're doing. You know, mix is huge in our portfolio when we think about pounds versus dollars, impacts of markets, you know, a potential rebound in turkey. You know, times when we may be building inventory to support customer promotional activity. All those things are part of our inventory mix. Really for us, you know, we'll be talking to all of you, just like we're doing today in a very transparent manner, to say is our demand or is our inventory aligned with our demand? That's really gonna be the key indicator going forward. We're disappointed where we are, but we know what we need to do. Probably said it the most simple way possible is that after almost three years of chasing this unprecedented demand, supply caught demand, and we needed to react sooner and we didn't. Yes. Another important point, to just mention here, Rupesh, is that, you know, as we have this elevated inventory, what it does is also just delay us from recognizing and benefiting from some of the costs coming down. You know, when we think about, you know, freight rates, markets coming down, we haven't really been able to realize those, and that's been delayed. We talked about it in the fourth quarter that we should see that relief here and those benefits showing up in our margins this quarter, and that's been delayed as well and affecting where we're sitting right now from a guidance perspective. Great. Thank you for the color there. Then I'm gonna slip in another question. I think in your prepared comments you mentioned something about learning about people. I think you said technology and processes. What are the key learnings there and then, you know, how quickly can they be implemented? I'll go ahead and start on that, Rupesh. I mean, I think there's a couple of things there that we need to talk about just to, you know, to level set, you know, those comments. I mean, the first thing is, you know, we're a much larger company today, you know, than we were two years ago. It's not just the PLANTERS acquisition. That's part of it, you know, we've seen significant growth in our business. You know, we haven't stopped acting on our strategic priorities. You know, everything that we've talked about in terms of becoming more balanced, transforming our company, you know, we've continued to move that forward, you know, all while navigating this crazy current environment and managing through avian influenza. When we say that we've learned a lot about our people, you know, we've have the right people. You know, as we've gone through our Go Forward initiative, we just need to make sure that we have them doing the right work, and Go Forward will help with that. You know, when we talk about processes, as we've integrated businesses, you know, there are processes that will need a refresh. You know, when we think about inventory, pricing decisions, brand resourcing. You know, Go Forward will help with that as well. You know, on the technology side, I'll maybe let Jacinth add color there. Yeah. you know, from a short-term perspective, you know, we are probably just a level set. I mean, this team knows how to manage inventory. What we're doing in the immediate term here is just returning to that pre-pandemic discipline when we think about SG&A and the process that is aligned with ensuring that we're listening to demand signal, connecting our commercial team with our supply chain team, and getting all our supply planning aligned. That's what we're doing in the immediate term. From a long-term perspective, we have made significant investment from a systems and technology standpoint with Project Orion, and we paused that intentionally as we were integrating PLANTERS, integrating JOTS, and that was purposeful to get those done correctly. Now we're now continuing that work to enhance our S&OP and our end-to-end planning and be able to leverage our technology and our people to get us to the next level. Great. Thank you for all the color, and best of luck. Thank you. The next question comes from Robert Moskow of Credit Suisse. Please go ahead. Hi. Thank you. I guess I'm a little confused as to where the inventory is building up in terms of your portfolio and, you know, what categories did you underestimate the volume weakness. Is it bellies? Is it protein? Is it in the freezers? You mentioned in your prepared remarks a lot of products that did really well, and you talked about strong demand. You know, what kind of demand were you expecting and where did it fall short? Yeah. Good morning, Rob. You know, we did also say that we had, across all segments, some volume softness. We certainly had a lot of brands and categories that did really well. You know, we talked about PLANTERS being off to a slower start, so that's a part of it. You know, we did also talk about that period of time with our food service business where we had softness. That too is part of it. You know, the food service piece will experience growth for the balance of the year, you know, less concerned about that. It's really... I mean, it's a little bit across the board on the sales and volume side. The other part to consider is what we're talking about with our supply chain is there's a level of overproduction as well. You know, as we've, you know, gotten better in our supply chain and wanted to run it more productively, more efficiently, you know, they've been running hard, and we've built that inventory. In some cases, that inventory is not aligned with the demand. That's really our issue is it's a little bit across the board on the product side, or I'll say the sales side, and then, you know, across on the supply chain side, this overproduction, which built the inventory. Okay, because if I can dig in a little, Jim, like, I think six to nine months ago, the issue was labor shortages, turnover, you know, couldn't run the plants effectively enough to meet demand, and now they're overproducing? Exactly. Yep. Rob, I mean, that's exactly. I said that a little while ago. You know, if we go back over the last three years, everything that we've been through and those different scenarios of, you're right, not having people, and then when we were getting people, they were turning over. Now that we're getting people, we're keeping people, you know, the plants are running more productively and more efficiently, you know, at that. Our goal is to make sure that we're getting up to fill rates and that, you know, we do have some production capacity. Our plants have gotten better, and like I said, in some cases they've outproduced demand, and that is definitely part of the problem. Okay. Last question on PLANTERS. You know, when I look at the Nielsen tracking data, the unit sales are certainly down. The volumes are down over the last 12 weeks, like 6% or 7%, but that's been consistent for the past 52 weeks. You know, unit sales have been down by that amount. Were you expecting a big pickup in unit sales and total sales in the quarter on stronger marketing and Super Bowl marketing and it just didn't play out? Yeah. I think couple of things there, Rob, and then I'll turn it over to Deanna. You know, as we think about PLANTERS, you know, in the short term. You know, it is about execution, driving demand, and also the mix. You know, we've said this multiple times, and it just bears restating, is that we did deliver on our year-one commitments. You know, we've maintained some stable distribution. You know, we've seen some channel shifting with the business as well. The demand is certainly lower versus our expectations in Q1. As we're thinking about this business now, it's really, you know, what are we gonna do in the short term from an execution perspective? Deanna, I'll let you add some color there. Yeah, sure. Thanks, Rob. You know, just as we think about it, we knew this business was where it was when we acquired it. Again, we were interested in this business from the snacking perspective and really is a long-term ambition for us. When we think about plant-based protein, entertaining, snacking, and our ambitions for C- store, those still remain front and center. In the short term, we do have execution challenges, in particular our base business, which is a top priority for the team. When I also looked to Q1, that was when we cut over the inventory from the prior owner, so there is some noise there and some things that happened in the quarter. As well as we inherited some distribution losses right out of the gate that the team has been working against. As we head into Q2, we'll recover some of those important distribution points that will really help stabilize the base business. We're really energized by the innovation. I was with our PLANTERS R&D and marketing team earlier this week, and the pipeline of innovation that this team has in front of us for both the rest of 2023, 2024, and beyond is exceptional and really energizing in regards to where they see this business going. When we talk about innovation, you'll also see innovation launch in this quarter, both in the core business as well as in our C-store business. You mentioned Super Bowl. We did have a really fun Super Bowl ad that was really centered on peanuts because we do know that the consumers are thinking about the mix of nuts and snacking right now. Peanuts are a really valuable item for them, so reminding them of how much fun PLANTERS peanuts can be as well as the protein they deliver and a great snacking option. We'll see that it wasn't just a 30-second commercial. You'll see activation both before the event, after the event, and really leads us into the quarter as we activate some of the other seasonal launches later in the year. The other thing to think about is not only that this business was starved, and we've been investing both from an advertising perspective, from an innovation standpoint, as I mentioned, and then also from a capacity standpoint. For us to grow this business, we need to add capacity, which we've invested in regards to tube nuts for the C- store channel as well as the club channel. We'll see that come online here later this year and into next. We also have work to do with the portfolio. Frankly, the assortment and price pack architecture, it's a big portfolio, and we know there's optimization that will allow us to unlock growth. Really again, just thinking about where we're at with this business. You know, we acquired the business last year, we integrated the business, and right now we're executing the business. We know we've got work to do, but really confident in what I saw this week with the teams where we're headed into Q2 and the rest of the year. Thank you. The next question comes from Eric Larson, Seaport Research Partners. Please go ahead. Thank you, everyone. Just a couple of questions. Can you provide a little bit more detail again, or just remind us kind of the cadence of turkey volumes? I think turkey volumes on a year-over-year basis still have a difficult comp in Q2. I believe you were expecting those to start rebounding in the second half. Also do the same thing for us with your commodity pork volumes. You should be starting to anniversary, I think, when you offloaded with a new contract some of that commodity volume. When do we sort of anniversary sort of the, you know, the adverse comps that you would have on your commodity pork? Yep. Good morning, Eric. On the turkey side, you know, the numbers that we've been talking about have come through that, you know, turkey's been down high 20s, 30% in terms of volume. We expect that through the first half or now the second quarter of this year and expect volumes to rebound in the back half of the year. That's all with the assumption that we don't have another significant AI outbreak like we did last year. Of course, you know, some events into the winter months. On the pork side, you know, we are now just lapping that supply agreement. As we go throughout the balance of the year, the comps will be more normalized. Okay, thanks. Then just, you know, just a quick follow-up, and this is maybe, you know, for Deanna. You'd mentioned elasticities, and where you were seeing some of the maybe more elasticity in some of your retail products. Can you give us a little bit more color on where those are and whether you may have to have some promotional adjustments on that? That was mentioned, I believe, in some of the prepared comments. It's very interesting because it's a bit bipolar in that you've got some categories where the elasticities are playing out exactly as expected. We've got other categories where the consumer has acknowledged the change in price on shelf and continues to purchase in their regular cycles. I would say where we're seeing more elasticity would be in areas that could be higher rings. Thinking of like a fully cooked rack of ribs, we've seen some demand declines there. Obviously having other areas for the consumer to shift to. Take a tub of barbecue or a dinner entrée that has a lower price ring but still allows or meets the same consumer need of putting dinner on the table. Making sure that, as you mentioned, that we're promoting our products and pulsing in some of those areas, and that we're advertising and making sure our consumers understand the value of our products and how they can utilize them, speaks to the breadth of our portfolio. You know, we've always talked about why it's valuable to have products at different price points and that meet different consumer need states. And, and it's exceedingly important right now. Thank you. The next question comes from Ben Theurer of Barclays. Please go ahead. Yeah. That was interesting on the last name. Thanks for taking my question. Just one I had on the different demand drivers, retail versus food service in particular. If we look into it, they're both somewhat equally down in sales. At the same time, in food service you were actually able to expand margins when retail, we saw the margin contraction. If we come back to the whole inventory and the misalignment and demand kind of exceeding, well, supply kind of exceeding demand, is that particularly in retail where you got these issues and this misalignment which caused the margins to be under pressure? Is that also something you saw in food service just not at the same magnitude, maybe because of mix what falls into food service? Thank you. Yeah, Ben, I think the way you described it there at the end of your question is correct. I mean, there are inventory issues in both, but retail is currently more. You know, as you talked about, you know, the food service pricing and sales, you know, the element of that is, and we've talked about this frequently, is we have seen some commodity relief. On the food service side of the business, they're able to price closer to the market. The pricing is a lot more fluid. Okay. My follow-up is just quickly on China. I mean, we all know fourth quarter, particularly December, was a very tough one with the whole reopening and cases, et cetera. As of today, early March, have you seen like particularly in February and like signs of consumers being in a more normal environment of consumption? Is it fair to assume that that could be an easier fix go forward than maybe some of the issues you have on the inventory side over in North America? Yeah. Again, Ben, that's a very fair assessment. you know, we've said that, you know, we have seen early in the second quarter, the China foodservice business has seen a nice uptick or nice rebound as, you know, consumer or, you know, Chinese population seems to be making their way through COVID and are now heading back out. we've seen foodservice up. You know, on the retail side of the business, we're really excited about the continued innovation that we've been able to deliver. The other thing, you know, when we built that plant several years ago, you know, we put in a SPAM line, and our SPAM business has done really well, especially our SPAM singles business. We've seen that continue to grow on the retail side to the point where we'll be making some additional investments to support that growth. Your take on China is exactly what we're seeing and how we're thinking about it. Thank you. The next question comes from Tom Palmer of JP Morgan. Please go ahead. Good morning, thank you for the question. I'm sorry to belabor the inventory discussion. I just wanna clarify something a bit. It sounded like in the prepared remarks there were some constraints in terms of sourcing pork and turkey right now, and that you're unable to produce enough peanut butter. Maybe I heard this wrong, but I don't think PLANTERS can account for a lot of the inventory issues. I just hope to better understand what types of products you've built up too much inventory of, and is it certain pork products that fall into that equation? Yeah. Tom, I'll start with that first question. We didn't have any difficulty sourcing pork products for, you know, production. What we've said is it's just the decline is what we would've normally had coming at us that we don't today. We used to have to sell it, today we don't. That's what we're talking about for the pork decline. The turkey is absolutely, you know, not enough turkey coming through to support the business. As we think about, you know, the inventory across the entire portfolio, you're right. I mean, it's not all PLANTERS. I mean, that's part of it. You know, when we think about, you know, as I described earlier, some of it is inventory that has been built for promotion. Think SPAM as we get into bigger promotions throughout the year. We do have elevated inventories of ribs. We have some elevated inventories of completes, bacon bits. It is a mixed bag. Other perishable refrigerated items. It's a mixed bag across the inventory that we have and the portfolio. Yeah, we're not trying to pin this on any one item or one category. I mean, it is broad-based. Okay. Thank you, and thanks for all the details. Maybe just follow up on the price increases. You mentioned retail. Just any detail on how much of the portfolio is being addressed with pricing? Any help on the magnitude, the timing? Then just, you know, are there certain commodity types that need to be addressed in particular? Yeah, Tom, thanks. This is Deanna. I'll jump in there. We still have wraparound pricing that's flowing through. We took several price increases last year, some of those are still flowing through. We have a chunk of the portfolio that is currently in price increases roughly about 5%. You know, we've taken a very mindful approach to our pricing in thinking about, you know, elasticities, volumes, where we've added capacity. Obviously, we wanna make sure that we're able to leverage that capacity. We've tried to be very mindful. We've taken multiple price increases, probably in smaller increments than some of our competitors have announced. Really the increases we're taking are justified for inflation. We'll continue to monitor that. We've got the ones, as I mentioned, that are already in the quarter, happening, and we've got a few other categories that we're evaluating as we sit today. Thank you. The next question comes from Peter Galbo of Bank of America. Please go ahead. Hey, guys. Good morning. Thank you for taking the questions. maybe just the first question, more of a technical question around the resegmentation. and just to level set everybody on the call, have you disclosed at all just what percentage of the new retail business will be captured in scanner data, so in Nielsen and IRI? I think you had a helpful breakout for retail particularly just on the different, you know, the different verticals. Is there anything you can do to help us on the food service side? I don't think there was anything in the slide deck from Tuesday. In terms of the retail component, it'll be somewhere around, you know, 80%. You know, in the food service side, I mean, there wouldn't be anything that you would actually see. Right. No, but. Yeah, we. Sorry, go ahead. No, that's okay, Peter. You know, we're not gonna have the same kind of vertical structure, you know, within food service, just because it doesn't I mean, the industry doesn't even really think about it that way. What we will try to do over time is provide you know, more color. For example, you know, in this quarter as we integrated the JOTS business, and we've talked about how that is going to be a benefit to both, the JOTS business and the Hormel business. You know, a channel like K-12, our school business, had a really good quarter. We'll continue to try to provide that type of color. From a, I'll say, a typical reporting, it will all roll up just into food service. Okay. Thanks for that, Jim. Yeah. Again, just to go back to the inventory side and maybe just to think about it in a little bit of a different manner. If you are gonna be selling through, you know, more of your inventory or trying to get it more right-sized, I guess why wasn't there an adjustment to the sales line as well? Just thinking about if you're gonna sell into, I don't know, more discount channels or whatever you're gonna have to do. The second part of that question is just in your conversations with retailers, how should we think about, you know, what they're asking you to do? Is it to carry more of the burden of working capital, carry, you know, more inventory for them because they wanna have less in terms of their working capital needs? Just the implications is how you're thinking about it on cash flow. I know that's a lot, kind of as a two-part question, but appreciate the thought. Yeah, no, it's a really, really good question. No, we have not moved off of our top line guidance. We know that there's a turkey uncertainty, you know, and expect that to come back in the back half of the year. The other part of this is our foodservice business. Even though we, you know, had some softness for a period of time in the first quarter, we expect growth for the balance of the year. Those really are 2 drivers. As we expect our international business to come back with some of those challenges abating. We, we do believe that we'll be able to deliver that top line. You know, the second part of that question, you know, we're not getting that pressure from retailers in terms of keep more inventory. You know, as Justin said earlier, you know, we know how to run this business. You know, historically, we've had very strong fill rates. It's obviously some of the supply chain challenges that we've had over the last two, three years that have prevented us from getting to those fill rates. Slowly but surely, we are getting those fill rates back to where they were. When we're able to operate the way that we did pre-pandemic, that's really the expectation. Thank you. The next question comes from Michael Lavery of Piper Sandler. Please go ahead. Thank you. Good morning. Morning. I just wanna come back to PLANTERS specifically. It's when you detail some of these challenges, it's one of the three things you call out as a focus area in terms of optimizing promotional support and everything else. You also called out the capacity expansion even though those volumes have been down kind of mid or more single digits for some time. Can you just maybe elaborate on what pain point the capacity expansion solves given the current situation? Sure. Thanks, Michael. The capacity expansion specifically addressed the continued evolution of snacking as well as C- store and club channels. The capacity we're adding is specific packaging that really is on trend with how consumers wanna snack today. When you think about the tube nut in particular, both in a singular purchase as well as in a club variety, the additional capacity is really designed to help us continue to meet the demand, which is exceptional there. The other area of growth that we haven't talked about that is really a hidden gem in the portfolio is the CORN NUTS business and some really great flavors that are coming to market. As we think of the convenience store business, really the 100 days of summer is where that business really comes to light. Adding capacity both for C-s tore and club store is where we're leaning into right now. I think it's important to know, Michael, these are things that we knew when we bought the business, right? We knew that there was gonna have to be some packaging innovation, which we did last year with the new bottle, you know, some capacity investment. So it was existing packaging, but we saw that as an opportunity. It was just a matter of what the timing was that we were going to need it. As Deanna mentioned, you know, we've seen really, really strong growth since day one for the CORN NUTS business and we don't expect that to slow down. Okay. That's helpful. Just coming back to Garuda, did you have an option for a bigger stake there or could you at some point? How do we think about whether or not that ever becomes part of, you know, above the line in operations? Yeah. I think, you know, for now it was. You know, we took out the previous private equity owner. That was the big stake that was for sale. You know, for us it was the right size at the right time. You know, I mean, we've been a partner with them, but it's early days, and we still need to learn about the business, about the market. We know it supports our two strategic initiatives for adding scale and snacking and entertaining and developing that global presence. As we go along, we certainly think there will be opportunities for us to, you know, if the business delivers, for us to take a bigger position. Thank you. Our last question comes from Adam Samuelson of Goldman Sachs. Please go ahead. Yes. Thanks for squeezing me in. I guess first question just on Jennie-O, or turkey I should say. You talked about volumes improving and starting to normalize in the back half, assuming no further HPAI. I think, and you already started to see this, commodity breast meat pricing coming down, and that would continue if there is no further supply disruptions in the turkey market. Commodity breast meat pricing was actually a big margin uplift to that business last year. I know it's now split between retail and food service international, so it's not as visible. Did your full year outlook for your turkey business profitability actually come down with this update? I just... It's not clear, because it would seem like turkey breast meat pricing could be a pretty big headwind over the balance of the year. Yeah, Adam, good morning. You know, we have not changed the outlook for the turkey business at all. You know, you're right that we've seen, you know, lower breast meat markets. The turkey business is still in a very favorable position. You know, turkey demand is strong. You know, the value added portion of the business continues to do well. You know, as we get more meat, we'll be able to fill more of that. You know, we know that whole birds cleared really well this holiday season, and that bodes well as we head into the next holiday season. I do think it's, you know, for us, this is all about what happens with AI. We'll know a lot more here in the next couple of months as to, you know, what, if any impact it'll have in the business. Yeah, we've not changed our outlook and feel like there's still plenty of opportunities to drive a strong performance even as the breast meat market has gone lower. Okay. If I could just ask one last follow-up. This inventory question's come up in a lot of different ways, but I guess I'm struck with the new reporting structure and the new segment structure, kind of there's a little bit less kinda connectivity between some of the plants and the end sales channels than there might have been before. There's always some disparity, but you now have like bacon going through two different channels versus one previously or two reporting units. How are you thinking about kind of the ownership on working capital and kinda tying performance of business leaders to not just segment profit or sales, but also whether it's a cash flow or return on an asset kinda metric that I don't think has been a big part of the incentive compensation structure previously. Yeah. Adam, I mean, the, you know, the flow of the product through the sales side really hasn't changed, you know. You know, the bacon example you mentioned, you know, we've had it going into retail, and we've had it going into foodservice the same way that we always have. You know, if anything, this structure actually centralizes and creates less confusion in terms of who has responsibility with, you know, Deanna now overseeing retail. It's really helpful. You know, we do have elements of our incentive that are, you know, that do take into account return on invested capital. You know, we use that more as a modifier to make sure that the team continues to keep an eye on that 'cause we know how important it is. We don't have any plans to change the rate of that as an element of compensation. We feel like we've got the proper oversight to drive improvement over time. Yeah. Just for, just to clarify or just to emphasize, you know, the Go Forward structure hasn't in any way muddied up the waters in terms of the, you know, how we look at the business and how incentives are aligned to drive the results. It actually does the complete opposite. Now there is very clear delineation and transparency in terms of objectives in driving the results and the outcome for the business. Thank you. Ladies and gentlemen, this does conclude your conference call for today. We thank you for your participation and ask that you please disconnect your lines.