Good afternoon, everyone. Thank you for joining us at Oppenheimer's 24th Annual Consumer Growth and E-Commerce Conference. My name is Rupesh Parikh. I'm senior food, grocery, and consumer products analyst here at Oppenheimer. I'm happy to introduce our next presenting company, Hormel. Joining us today are CEO Jim Snee, CFO Jacinth Smiley, and Director of Finance Retail, David Dahlstrom. So thank you all for being here. The format today's Q&A session will be a fireside chat, and then I'll move to audience Q&A. So if you have questions, please enter them in the question panel below the video. So let's get started. I'm gonna start off with a few macro questions. So kicking it off with the consumer, there are clearly more concerns out there on the low-end consumer. How do you characterize the current health of the consumer at both your grocery and food service business, and have you seen any changing dynamic as it relates to consumer behavior or preferences? Yeah. Well, Rupesh, thanks for, thanks for having us. It's always, always a pleasure to get the chance to spend some time with you. You know, as we think about the consumer, really, our outlook for the consumer is mostly unchanged, and I really feel like the American consumer just has been incredibly resilient, right? And then take it across all income levels, ages, geographies. You know, I can't remember the source, but I know this morning, there was some consumer data out that really supported that, you know, the consumer is resilient. But, you know, their resilience in this really dynamic environment... You know, there certainly are some headwinds when we talk about inflation, whether it's SNAP declines, student loan repayments. You know, there's a lot of things there, but then there are also clearly some tailwinds that are allowing the consumer to be so resilient. You know, we, we think about a strong job market, and again, data last week supported that. We know what consumers are doing in terms of their, their spending, and although we have seen elevated inflation, the rate at which it's increasing seems, seems to be moderating a little bit. So, you know, that, that resilient word, I, I know it can sound a bit cliché and overused, but I really do think that it's, it's appropriate in the environment we're in. And, you know, so, so what does that, what does that mean for us? As we think about it, you know, the way that we've built this really broad, balanced, diversified portfolio, this is a time when it serves us well. You know, when we think about the channels where we compete, right? Retail, food service, and also international. How we think about our brands, some of them very premium, some of them a bit more mainstream. When we think about retail specifically, you know, where we compete, whether it's the perimeter or more center of the store. You know, most recently, with the acquisition of Planters, really expanding our presence in the convenience store channel as well. Then, you know, again, just a range of protein options, which is, you know, something that seems to be becoming more and more of an opportunity. You know, when we put all of that together, we've got this resilient consumer with a very favorable portfolio, and, I mean, that's why we're optimistic about our business going forward. Great. And then on the food away from versus food at home side, so some are covered retailers, Walmart and Costco. Yeah. I've hinted lately that they're seeing benefits from consumers potentially eating more at home lately. So your team has a unique vantage point between both food service and retail. So have you guys seen or are you expecting any meaningful shifts between food at home and food away from home for the balance of the year? You know, it's a great question, and, you know, yes, we have this unique visibility, but we also have this incredibly unique opportunity. And it goes back to really how we've built the portfolio and how we've targeted these different channels. And so, you know, this retail portfolio that has this combination of premium, mainstream, you know, perimeter, center of the store, really being there for retail consumers when and where they wanna shop. But then with the food service business, that has... You know, it's 30+ years in the making, that is focused on solving pain points for food service operators, and it starts with our selling organization, right? It starts with our direct selling force that's in the back of the house, talking to operators: "What's on your mind? What are you struggling with?" And the solutions-based approach to our portfolio, that in spite of some of the macro data that's out there. I mean, you go back, and you look at the trend of growth that we've seen in our food service business, right? Yeah, are we flying in the face of that? Absolutely. And a big part of that is our ability to capture the opportunity and solve the problem, but then also thinking about where we're competing in food service. I know there's this propensity to want to say, all food service are commercial operators. Well, even within commercial operators, there's different segments and different opportunities. And then when we get into the non-commercial side, you know, when we think of, you know, healthcare, K- 12, you know, the, the way that we've attacked this business in a very targeted, specific way, it's what has allowed us to really think about this as just a constant opportunity, even when some of the industry or macro data may lead others to think, think differently. You know, we're about, you know, almost halfway through our third quarter now, Rupesh, and I would tell you that our food service business continues to perform as we expect it to. Okay, that, that's helpful. Now, switching gears to areas that are more topical post-release, the first on the revenue guide. The updated full year revenue guide, even at the low end, implies a meaningful step up in top-line growth versus the first half of the year. Can you walk us through the key puts and takes here, and what's your key team's confidence in driving this acceleration? Yeah, so I think it's important, right? As we said on the call, right, we do see a path to that range, but the most likely scenario is the low end. But we're really confident in the high single-digit H2 growth for food service and international. And like I said, you know, we're almost halfway through the third quarter, and those businesses continue to meet our expectations. I do think the retail story is more of a nuanced story, you know, where we think about the pockets of the business that continue to perform well. You know, we've talked about SPAM, we've talked about Skippy, we've talked about Planters. Really, the biggest driver of, you know, any sales impact is our whole bird impact, and we've been pretty clear about that throughout the year. You know, we gave some specifics in Jacinth's commentary in Q2, you know, but we do feel confident that we're going to be able to deliver that low end of the range. And there's lots of moving parts, but I think fundamentally, we feel really good about the business and where it's headed. Right. And the other area we've gotten a lot of questions is just on volumes. So we saw a softer volume growth in Q2 versus Q1, and this appeared to be the key driver of the share price weakness post the report. So how have first half volumes played out versus your team's expectations? And then would you call out any major positive or negative surprises of note? Yeah, I mean, I think for you know, the volumes were generally in line for the first half of the year, and they were stable year over year. You know, you're always gonna have timing elements quarter to quarter. But you know, again, back to you know, food service being just a great driver for the business when we think about the selling team, the portfolio, the channels, all the things that I know we've talked about a lot. You know, we expect that mid-single digit growth for the balance of the year. Our international business, you know, we talked about the recovery that was gonna happen throughout the year, and we're seeing it, and we're seeing improving trends in key areas, whether it's our SPAM business, China. You know, and so, you know, although we've got some decline, high single-digit declines for the balance of the year, so much of that is tied to commodity business, you know, fresh pork and turkey volumes. And what the team can control and really be focused on, they're doing a great job. And then, like I said, you know, the retail volume story is a bit more nuanced. You know, we've got our flagship brands, so think bacon, SPAM, Planters, you know, Jennie-O, lean ground, so many of those well-recognized brands, and then Skippy, Applegate, all doing really well. But then we've got softer volumes for whole bird turkeys, and that's expected. You know, we've been talking about that and hopefully providing good color and good information along the way. Other parts of the business that, you know, we don't talk about as much, there's some contract manufacturing volumes in there that, you know, have an impact on the business. But when we think about how we roll this business up and what really matters, we feel really good about where it's headed for the back half of the year. Okay, so it sounds like if you take out the whole birds business and the contract manufacturing volumes, it would probably give us 0.2, you know, a different picture on retail than what we're seeing. Yeah, absolutely, Rupesh. That's a really, really good clarification, is that, you know, those are... I mean, they're very specific and tactical items, but you've got, you know, whole bird volumes are significant, and contract manufacturing volumes are also having an impact. It would be a different story. Okay, since we, again, since we got so many questions on retail, so, you know, at your Analyst Day, I thought the commentary on retail overall was very, you know, fairly bullish on the longer term there. So, you know, given what you've seen in the first half of the year, does anything change in terms of how you guys look at the longer-term health of the retail, your product portfolio in retail? So maybe just some thoughts there versus the commentary at the Analyst Day. Yeah, you know, the way we think about it is, I mean, everything we do, Rupesh, is got a long-term focus on it. And you've heard our retail team talk about being focused on winning with consumers, winning with the customers, and really, you know, better allocating resources so that over the longer term, we improve the margin structure of the business. And that's what we're focused on doing. You know, and if you really you think about the business overall and what our expectations were, retail was expected to offset the whole bird more than offset the whole bird impact on this business. That's a pretty big accomplishment when we told you what the impact was going to be. And really, the new news in our conversation has been the Planters disruption and that corresponding impact. And so, you know, that should hopefully reframe a little bit how we're thinking and how we were thinking about retail and what we're gonna be able to get done, so that retail, again, that we were expecting to more than offset the whole bird impact. And we're doing that through the brands, a lot of the brands that we've already talked about, our flagship brands: Planters, Black Label, SPAM, Jennie-O. They performed well, gained share. We expect them to continue to perform well in the marketplace. Innovation remain a key focus for the team. When we think about the innovation work that we've done with the Planters brand, I mean, it's been incredibly successful, and it's doing everything that we want it to do in terms of not just driving sales, but connecting with the right consumer. And then, I mean, there's still benefit to be gained from this go-forward structure, right? How we're aligning resources to really optimize that business going forward, we're 18 months into that new structure, and the progress we've made is really, really good. So, you know, we feel good about the team's ability to continue to overcome some of the headwinds that are always going to be there. You know, some of the trends, you know, we talked about some pockets of center store. Not entirely new, and that's why we build out this balanced portfolio because, you know, it never hits on all cylinders at all times. And so we just wanna make sure that we're set up, that when something's down, something else is up, and vice versa. I think we've demonstrated our ability to do that, over time. We understand where challenges are, and we have a plan, and we know how to execute that plan. Great. So the last topic I want to cover following the report is just the whole bird turkey business. It appears weaker whole turkey markets will continue through the balance of the fiscal year. Can you remind us the dynamics here, and then would you expect this headwind to continue into your next fiscal year? Yeah, Rupesh, so as we think about whole birds, from a big-picture perspective, you know, outside of whole birds, we are projecting growth across several parts of the Jennie-O branded turkey, including ground turkey that Jim touched on before. And there, we've been leaning into that with advertising to just continue to drive the consumers there in the retail space and then also in our value-added turkey business in food service. But as we think about the impact from the whole birds, you know, we talked about $0.15 impact in total for the year. Given where we were last year with HPAI and the disruption there from the virus, and coming into this year where it was minimal, we're seeing oversupply in the market, consistent with the rest of everybody else. And so we will see that impact here as, you know, a headwind, but that's fully baked in to the guidance that we have given, so we feel that we have de-risked the portfolio. But the big picture is we have turkey available, and we're ready to service the customers in a market that we believe is very attractive. Any sense whether this headwind continues into next year, or is it, is it still too early? It's still too early to say. You know, again, you know, we're fully de-risked for 2024, and we won't give any guidance here going into 2025 as yet. Okay, great. Yeah, and I think, Rupesh, you know, the important thing that, you know, Jacinth talked about is, you know, our, our teams are out there focused on, on regaining, you know, lost business from when the supply wasn't there. And, you know, the retail one, again, becomes a lot more evident, because you can see the product on shelf. But thinking about the work that's happening in our food service business is really important as well, that they now have this very important protein back in their bag, and they're confident when they're out selling it, and we're seeing that business continue to pick up as well. Okay, so that's a great segue into the next area I want to cover, is just food service. So food service clearly remains a bright spot for Hormel, and, you know, already you know, commentary today on this call has been positive on food service. So what are the bigger opportunities your team still sees in the channel? And then what's your team's confidence in sustaining momentum within food service? Yeah, it is, it's a great question, and I do think it's one that, you know, we need to continue to spend more time on because it's just not as visible. The data isn't as transparent as the retail business. But obviously, our results demonstrate that, you know, not only we have an excellent start for the year, positioned for a strong half two, but I think the most important thing here is, through those numbers, is this belief and knowledge that we're operating from a position of strength, right, with this direct sales team, this portfolio of innovative, value-added solutions and really being able to build out these diversified sales channels. And so when we think about that opportunity, that last one, diversified sales channels, and Rupesh, you know, we've talked about since the acquisition of Planters, our desire to become a bigger player in that convenience store channel as consumers shop that differently than they ever have. And so, you know, we've been able to really build out, in our typical way, this kind of multipronged approach to c -stores, where, you know, the business is, there's front of the store, where I'm going in, I'm gonna grab a snack, and I'm gonna go. And the team has done a great job with distribution, the innovation that we've been able to get on shelf, and we've really built that into a competency and a muscle that we longed to have. But then when we think about how consumers and customers are shopping differently in terms of meals that they're getting, the prepared food, right? Sandwiches, sliced meats, and the way we're able to talk about our pizza toppings, sliced meats for those sandwiches, the conversations are really, really much different, and so we feel really good about that as a continuous opportunity. Through the work that we've done in bringing the Jennie-O business closer, you know, it's opened up a whole range of opportunities for us in really the K through 12 school business. Jennie-O had a really strong foothold there, and now being able to layer in the Hormel portfolio with the right sales acumen, really great opportunity for us. And then as we think about innovative items, you know, we've, we've talked a lot over the years about Austin Blues Barbecue, Café H, Bacon 1, and it doesn't stop. You know, now we're talking about this Flash 180 chicken that allows operators, without a lot of equipment, to be able to put chicken on their menu in a way that they weren't before. And Ribbon Pepperoni, that, you know, operators are always looking for something new and different, and so being able to have a different appearance on the top of a pizza... I mean, those two items alone have already exceeded our sales expectations. So, you know, it's that really forward-looking, but then there's some of the catch-up stuff. I mentioned, you know, we've got turkey, we've got available supply, some of the investments that we had made in capacity, to really help us in constrained areas such as bacon and pizza topping. So, you know, again, you can, you can tell my excitement, about the opportunities, because they're, they're real for our food service team. Great. And the other area where I feel like Hormel is building is international- Yeah. So I just wanted to touch on the international business as well. So, you know, as, at least, from our perspective, it appears your team is turning a corner, and your commentary on the call suggests you guys expect to return to growth in the back half of the year. So maybe if you can walk us through some of the key puts and takes here. Yeah, you know, we've talked about from the beginning of the year that this was all about recovery for international, given some of the macro environment that they endured last year. And then, you know, they were able to deliver, you know, first-half volume growth, and, you know, that was a balance of some commodity, but also refrigerated exports. You know, we're seeing that recovery in China. Retail is a little slower. Food service is coming back. But the work that they're doing in China, in Indonesia, you know, in with our partnerships throughout Asia, I mean, all of these things are really coming together, and that's why we expect this business will recover and, or I guess you would say, further accelerate in the back half of the year. And it's really broad-based, right? Branded exports, we expect to get back to more normalized shipments. China will continue to recover, strengthen food service, recovery in retail, and then these partnerships I talked about, Indonesia, South Korea, the Philippines, all of them leading to, you know, increased, significantly increased segment profit compared to last year. So, you know, it's setting up for not only to achieve recovery, but allow us to get back on track with some of the more strategic things that we wanna do in those areas that we've identified as opportunities. Great. So now moving on to a few Hormel-specific strategic questions. So your team provided a positive update on your transformation and modernization initiatives on your recent calls. How have the efforts progressed versus expectations? Any surprises to date? And then, does your team remain confident in your ability to deliver on your savings targets of $250 million by 2026? Yeah, so this is definitely a clear, bright spot for us. I mean, we came out of Investor Day really bullish about what we wanted to achieve in order to grow earnings, but also improve the business, particularly when we think about our supply chain and the costs we've talked about that has crept in, that we really needed to take out in order to expand our margins and get back to the margin structure that we're used to. So just to, you know, as a reminder, the key areas that we're focused on were a few pillars underneath the supply chain: Plan, Buy, Make, Move, and portfolio optimization. We have made progress in all of those areas, in some cases ahead of our own expectations. So from a plan perspective, we are implementing an end-to-end planning process that really integrates the technology from a demand perspective all the way to the supply piece and getting the products out to customers. And then from a buy standpoint, we're clearly working on procuring better. You know, this is not something that we have had in our toolkit for a long time in terms of really focusing on how do we buy, whether that's direct supplies, logistics, indirect supplies, all across the board. And then on the make pillar, we're ensuring that we have a standardized manner in which we're running our plant, and we're really seeing benefits there as well. You know, one of 'em is able to actually increase capacity across the board in certain areas, but also improving our yields as we think about our manufacturing plans. And then, again, from a move perspective, that's an area where we're seeing benefits. Portfolio optimization is one we've gotten some questions about, and this is really beyond, as we said before, SKU rationalization, but it's truly how do we ensure we have a more focused portfolio that gives us the margin profile that we're looking for? So how do we improve the SKUs and get them into the quadrant that's less complex but more profitable? And we have seen some really good wins there, and, you know, there is one example that comes to mind around our pepperoni portfolio, where when we looked at our, that Gatherings portfolio, we had more than 71 items that we were shipping between last year and this year, and there's 25% of the items that either need to be actioned or consolidated. So we're clearly seeing wins in these areas that will definitely get us on the path to achieving what we set out for 2026, and the team has really rallied around this, and we have embraced it, enable it with change management that will ensure that this is actually sustainable, that we can achieve what we set out to achieve. But also, for the long term, this is not something that's a one-off that we will then be able to walk away from, but something that we know we will be able to put in place and sustain for the long term. So I really feel confident about our ability to execute what we set out to execute for 2024, but even more confident about what we will do for 2025 on the path to hitting and achieving the objectives we set out for 2026 as well. Okay, so it sounds like all the efforts here under transformation, modernization initiatives, you're on, you're on pace or ahead of where you guys would expect to be. Is that, is that the way to- Indeed, indeed. Okay, perfect. I'm gonna jump to a few financial questions. On your... In terms of your full year outlook, you've provided an update to your guidance during Q2 earnings. What would you highlight as a key risk in achieving the top and bottom line delivery? Yeah, I think, you know, Rupesh, we've talked a little bit about, you know, the top line already in terms of, you know, our ability to have food service continue to perform, get the right mix for international, especially for the top line of the business. And then, you know, feel like retail still has opportunity. You know, the pockets of growth gotta continue to grow and offset, you know, some of the areas that we talked about that may have some softness. But, you know, for us, when I think back to the guidance we set at the beginning of the year, then the performance in Q1, right, a really strong performance in Q1, and then we talked about this additional $0.05 of headwind, because the turkey markets that really, you know, I don't have any control over that. And then, you know, Q2, that was also strong. And, and, you know, if we didn't have the Planters disruption and some of this additional headwind from turkey markets, our outlook for the back half of the year, we'd be having an even more positive story to tell. And so when you parse that all apart, I mean, that, that's why we're confident, is that, you know, we feel like we've de-risked the turkey story. You know, in terms of the Planters disruption and our ability to get back on track there, you know, we feel like we've de-risked that, and we're still expecting strong performances from food service and international. And like I said, you know, retail's still gonna battle, and prior to the Planters news, we had expected them to more than offset whole birds. So, you know, given all the puts and takes, you know, don't wanna lose sight of the fact that we did raise, right? The recent raise of the bottom end guidance is appropriate, and we've got this clear line of sight to back half growth. So, the team feels really good about where we are. You know, we're focused when we talk about running the business and being able to execute against Transform and Modernize. There's very clear expectations and a lot of confidence in our ability to do what we say we're gonna do. Great, that's really helpful color. And then just on capital allocation, if you can remind us of how you rank the capital allocation priorities as they stand today, and where does M&A sit from a priority perspective? Well, so I'll touch on that. So our capital allocation strategy is consistent with what we've outlined before, and so it's, you know, it's required, strategic, and then opportunistic. And so today, as I think about it, and I know this question has been coming up, we are very focused on executing on Transform and Modernize. We have a huge unlock there in value capture that we've committed to, and so while we aren't focused on M&A today, we certainly continue to maintain a very robust list of potentials or things that we would be interested in. And, you know, to the extent that there was something that was super compelling, we would take a look at it, but as we sit here today, our focus is really executing on Transform and Modernize. ... Yeah, I would add to that, Rupesh. I mean, the bottom line is if we choose to do M&A, we can do M&A, right? And so it really is where is the strategic fit for that M&A opportunity. And so we know the strategic fit and opportunity for continuing to build momentum with the Planters business, even more so as we come back online post disruption, right? We've demonstrated our ability to execute against this business. Then the other part is, you know, the rewards and the benefits we're seeing from Transform and Modernize. We're gonna be very sensitive that we don't distract the organization, because we don't wanna lose that momentum. All that being said, though, just like Jacinth said, if there's strategic rationale and we continue to evaluate, talk about, and think about opportunities, we have the financial wherewithal to do it. And so I think we know exactly, you know, where those opportunities are. We'll continue to pursue them, but we'll do it in a very strategic and thoughtful way. Great. So I'm gonna wrap up with two longer-term questions. So first, does your team still believe it's on track towards the longer-term goals of 2%-3% organic sales growth and 5%-7% operating income growth? Yeah, we do, right? And that's, you know, when we think about what we set out for Investor Day and what we were gonna get done, you know, for 2026, it is to restore the historical and sustainable growth trajectory of the business. And so, you know, we're we've got that area in focus for retail food service and international. But then layering in all this Transform and Modernize initiatives to really support that effort, because we knew that we needed to get, you know, our supply chain back on track. And so the answer there is definitely yes, that's an important part of the three areas we need to execute against in this whole Transform and Modernize initiative by the end of 2026. Similarly, on the margin front, although still early on, does your team still believe they are on track towards driving the 10% plus retail segment margin target? Yeah. They are, and I think it goes back to what we talked about, win with the consumer, win with the customer, right? And be able to expand those margins. And so, they know exactly what they need to get done, and the confidence hasn't waned. The story hasn't changed, Rupesh. That's exactly what they are focused on doing. Yeah. And if I can just add, Rupesh, you know, we haven't talked about it, but part and parcel of this Transform and Modernize work that we're doing, and what we did with Go Forward, was really around having data and analytics, you know, sit as an enabler to everything that we're doing. And so that really helps inform us in terms of the decisions, whether it's to make a decision around a consumer from consumer insights, or it's to get all the data we need to inform us from a demand signal perspective, right? So all of those together really underpins all the work that we're doing to set us up to have a more robust infrastructure from a business standpoint and a supply chain standpoint as well. Okay, great. So we're up for time. So I want to thank Jim, Jacinth, and David for joining us today. Great. Thank you. Thanks, Rupesh. Appreciate the conversation.