Good day, and welcome to the Lamb Weston first quarter earnings call. Today's conference is being recorded. At this time, I'd like to turn the presentation over to Mr. Dexter Congbalay, VP of Investor Relations and Strategy. Please go ahead, sir. Good morning, and thank you for joining us for Lamb Weston's first quarter 2024 earnings call. This morning, we issued our earnings press release, which is available on our website, lambweston.com. Please note that during our remarks, we'll make some forward-looking statements about the company's expected performance that are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our SEC filings for more details on our forward-looking statements. Some of today's remarks include non-GAAP financial measures. These non-GAAP financial measures should not be considered a replacement for, and should be read together with, our GAAP results. You can find the GAAP and non-GAAP reconciliations in our earnings release. With me today are Tom Werner, our President and Chief Executive Officer, and Bernadette Madarieta, our Chief Financial Officer. Tom will provide an overview of the current operating environment. Bernadette will then provide details on our first quarter results, as well as our updated outlook for fiscal 2024. With that, let me now turn the call over to Tom. Thank you, Dexter. Good morning, and thank you for joining our call today. We delivered a strong start to the year as we continued to execute on our strategies to drive sustainable, profitable growth. Our integration of our EMEA operations is progressing well, our capacity expansion in China is now up and running, and our other expansion and modernization efforts around the globe remain on track. Our supply chain teams continue to drive productivity savings, and our commercial teams remain focused on serving our customers and driving innovation across all channels. While our volume was down versus the prior year, it was in line with our expectations and was primarily driven by our decisions to exit lower priced, lower margin business. We should see our year-over-year volume trends improve as the year progresses, as we begin to lap and backfill exited volumes with higher margin business. Overall, we feel good about the health of the category, our first quarter financial results, and our operating momentum, and have raised our sales and earning targets for the year. Let me now turn to the current operating environment. The global frozen potato category continues to be solid, with overall demand and supply balanced. Fry attachment rate, which is the rate at which consumers order fries when visiting a restaurant or other food service outlets across our key markets, have remained largely steady and above pre-pandemic levels. Restaurant traffic in our key markets was generally solid. In the U.S., overall restaurant traffic was flat versus the prior year quarter, as QSR traffic growth offset further traffic declines in full service restaurant channels. We believe that this is the cumulative effect of inflation and other macro pressures on the consumer over the past few years, favoring QSR traffic and tempering full service and casual dining traffic. While overall traffic growth did slow sequentially from about 1% in our fiscal fourth quarter, as quick service restaurant traffic growth cooled, much of that weakness was in June, and we're encouraged that both QSR and full service restaurant traffic trends improved as the quarter progressed. In Europe, restaurant traffic grew in many of our key markets. In the U.K., traffic was up mid-single digits, with growth in both QSR and full service restaurants. Growth was also solid in France, Germany, Italy, and Spain. In Asia, China restaurant traffic growth was very strong, but off depressed levels as the country rebounded from severe COVID-related restrictions. Traffic in Japan was solid in both QSR and full service restaurants. We suspect that restaurant traffic trends will be volatile in the near term as high interest rates, high inflation, and uncertainty continues to affect consumers. That said, frozen potato demand has proven resilient during the most challenging economic times, and we continue to be confident in the long-term growth prospects of the global category. Now, with respect to costs, we continue to expect input cost inflation in the mid- to high-single digits, largely driven by higher contract prices for potatoes, including a 20% increase in North America and a 35%-40% increase in Europe. Much of our inflation-driven pricing across our channels has either already been announced or included in price escalators within existing contracts. Customer contracts representing about 20% of our North American business are in the process of being finalized, and we feel good in the aggregate about the likely pricing and terms. Over the long term, we continue to expect pricing actions and supply chain productivity improvements will be the primary levers to offset inflation. We'll also continue to drive improvements in product and customer mix to benefit sales growth and profitability. Now, with respect to the upcoming potato crop, we are harvesting and processing the crops in our growing regions in both North America and Europe, and we believe the crops in the Columbia Basin, Idaho, Alberta, and the Midwest are in line with pre-pandemic historical averages. In Europe, we believe that the crop will also be in line with historical averages as a result of improved growing conditions. We'll provide our final assessment of the crop, including how it performs out of storage, when we report our second quarter results in early January, January. So in summary, we delivered solid results in the first quarter and continue to have good operating momentum. The overall category remains healthy, with demand and supply largely balanced. And finally, at this time, we believe the potato crops in our growing regions in North America or in Europe will be in line with pre-pandemic averages. Let me now turn the call over to Bernadette. Thanks, Tom, and good morning, everyone. I wanna start off by thanking the entire Lamb Weston team for the strong start to the year. Our performance speaks for itself, and it's a testament to the passion and dedication of our entire Lamb Weston team. We recognize that we're operating in a challenging macro environment, but the strong first quarter performance has allowed us to raise our fiscal 2024 financial targets. Let's start with reviewing our first quarter results. Compared with the prior year, sales increased $540 million, or 48%, to about $1.7 billion. About $375 million, or 70% of the increase, was attributable to the incremental sales from acquisitions, with most coming from our EMEA business. We lapped the Argentina acquisition this quarter, but we'll continue to receive the incremental benefit from the consolidation of the EMEA operations in the second and third quarters. As a reminder, since we began to consolidate EMEA sales beginning in the fourth quarter of fiscal 2023, those results are included in our last year's sales baseline. Excluding the incremental sales from our acquisitions, net sales grew 15%. Price mix was up 23% as we benefited from the pricing actions taken in fiscal 2023 in both our North America and International segments to counter input and manufacturing cost inflation. Mix was also favorable as we continue to strategically manage our product and customer portfolio. In addition, we estimate the price mix in the quarter benefited by a couple percentage points from lower-than-expected trade spending associated with pricing actions that we began implementing in the last month of fiscal 2023. This may be largely timing related, and as a result, could be a slight headwind as the year progresses. The trade spend benefit in the quarter, however, was mostly offset by a roughly two-point headwind related to lower freight charges passed on to customers as transportation costs have come down from the prior year period. As a reminder, our goal is to match freight charge to our customers with our transportation costs so that their effect on our profits is neutral over time. In line with expectations, overall sales volumes declined 8%. The decline was primarily due to our decisions to exit volume related primarily to four of our lower priced and lower margin contracts as part of our revenue growth management initiatives. To a lesser extent, continued inventory destocking by certain customers in international markets and in select U.S. retail channels also impacted volume. We believe the effect of these destocking actions is largely behind us and should have little impact, if any, on our results going forward. It's important to note that volume elasticity, or the amount of volume lost in response to inflation-based pricing actions, have been generally low. We expect our year-over-year volume trends to improve as the year progresses as we lap the volume we exited and backfill volume with higher margin business. Moving on from sales. Gross profit in the quarter, excluding comparability items, increased $213 million to $490 million. Nearly 3/4 of the increase was driven by the cumulative benefit of pricing actions, the timing of trade spending, mix improvement, and supply chain productivity in our legacy Lamb Weston business, which more than offset higher input and manufacturing costs per pound and the impact of lower volumes. The remaining roughly one-quarter of the increase was attributable to incremental earnings from consolidating EMEA. Including the dilutive impact of the EMEA acquisition, our gross margin percentage, excluding comparability items, increased 480 basis points to 29.4%. While first quarter margins have historically been our lowest margin quarter, we estimate that the timing of trade spending that I mentioned earlier accounted for approximately 200 basis points of the increase, which would put our normalized first quarter gross margin, including acquisitions, approaching 28%. Input costs continued to increase mid- to high-single digits on a per pound basis. The increases were largely driven by a 20% increase in the contracted price for potatoes in North America, higher prices for open market potatoes due to poor yields from the 2022 crop, and continued increases in the cost of labor, energy, and ingredients for batter coatings. The increase was partially offset by supply chain productivity savings, lower costs for edible oils, and lower freight costs. SG&A, excluding comparability items, increased $45 million to $160 million. More than half of the increase was from incremental SG&A with the consolidation of EMEA. The remainder was largely driven by higher expenses related to improving our IT and ERP infrastructure, and to a lesser extent, higher compensation and benefit expenses and higher advertising and promotion expenses. All of this led to adjusted EBITDA increasing 76% to $413 million. Higher sales and gross profit in the base business drove most of the growth, with the remainder attributable to incremental earnings from consolidating EMEA. Moving to our segments, this is the first quarter that we operated in our two new reporting segments, North America and International. Beginning with our North America segment, which includes sales to customers in all channels in the U.S., Canada, and Mexico, sales were up 19% in the quarter. Price mix was up 24%, which was driven by the carryover benefit of pricing actions that took effect in fiscal 2023 across each of our primary sales channels, the timing of trade spending, and favorable mix as we benefit from our revenue growth management initiatives. Lower freight revenue partially offset the increase. Volume in North America declined 5%. This primarily reflects our decision to exit volume related primarily to two lower priced and lower margin contracts that largely began to impact our sales in the second and third quarters of fiscal 2023. To a lesser extent, inventory destocking by certain customers in retail channels also pressured volumes. We don't anticipate further effects from the retail destocking after the first quarter. North America segment Adjusted EBITDA increased $148 million to $379 million, as the carryover benefit of pricing actions, the timing of trade spending, and favorable mix more than offset higher cost per pound and the impact of lower volumes. Moving to our International segment, which includes sales to customers in all channels outside of North America. Sales grew $360 million, or 212%, and included $375 million of incremental sales from the EMEA and Argentina acquisitions. Excluding these acquisitions, net sales declined 9%. While price mix was up 18%, driven by the carryover benefit of pricing actions taken in fiscal 2023, as well as favorable mix, lower volume and freight revenue offset the increase. As expected, volume, excluding acquisitions, declined 27%. The decrease primarily reflects our decisions to exit two very low price, low margin accounts that largely began to impact our international sales volume in our fiscal fourth quarter of 2023. To a lesser extent, continued inventory destocking also impacted volumes in the quarter, but as I mentioned earlier, we believe the effect of destocking is largely over. Despite a 27% decline in our International segment volume, segment adjusted EBITDA increased $57 million to $90 million. Incremental earnings from the consolidation of EMEA's financial results, as well as favorable price mix, drove most of the increase, more than offsetting the impact of higher cost per pound and lower volumes in our legacy Lamb Weston business. Moving to our liquidity position and cash flow. We continue to maintain a solid balance sheet with ample liquidity and a low leverage ratio. We ended the quarter with more than $160 million of cash and no borrowings under our $1 billion U.S. revolver. Our net debt was about $3.3 billion, which puts our leverage ratio at 2.3x. We generated about $335 million of cash from operations, or about $140 million more than the prior year quarter, largely due to the higher earnings. Capital expenditures were about $305 million, which is up about $180 million from the prior year quarter, primarily due to construction costs as we continue to expand processing capacity in China, Idaho, Argentina, and the Netherlands. During the quarter, we returned more than $140 million of cash to our shareholders, including $41 million in dividends. Most of the cash returned was from repurchasing $100 million of shares. That's more than double what we repurchased in all of 2023, as we acted opportunistically based on our stock price performance during our August open trading window. While our share buyback program is targeted to offset annual equity compensation dilution, we will continue to be opportunistic based on other capital allocation needs and the potential for generated solid returns based on our stock's trading value. Turning to our updated fiscal 2024 outlook. Based on our strong first quarter performance, we raised our financial targets for the year. While we continue to expect macro operating conditions to remain challenging, the overall current demand and pricing environment remains solid. In addition, as Tom mentioned, we believe the potato crops in our growing regions in North America and Europe will be consistent with pre-pandemic historical averages, and we're generally pleased with how the discussions to renew remaining contracts are progressing in aggregate. Specifically, we continue to expect strong net sales gains for the year and have increased our annual net sales target to $6.8 billion-$7 billion, which is up from our previous target of $6.7 billion-$6.9 billion. This includes $1.1 billion-$1.2 billion of incremental sales attributable to EMEA during the first three quarters of the year, which is up $100 million from our previous estimate. This represents a 6.5%-8.5% net sales growth, excluding acquisitions. For the year, we're targeting price mix to be up low double digits, which means that we expect price mix will slow sequentially from the 23% increase that we delivered in the first quarter as we begin to lap some of our price actions that we began implementing in the second quarter of last year. While the overall potato category continues to be solid, due to the timing of contract openers, we're targeting our full year volume, excluding acquisitions, to be down mid-single digits compared with the prior year. We expect year-over-year volume trends will continue to improve as the year progresses, as we lap some of the significant low-margin, low-profit volume that we chose to exit in the second half of last year, and as we gradually backfill the exited lower margin business with more profitable business. For earnings, we raised our Adjusted EBITDA target by about $90 million to $1.54 billion-$1.62 billion, up from our previous estimate of $1.45 billion-$1.525 billion. Using the midpoint of this updated range implies growth of about 26% or about $330 million versus the prior year. We left our target for SG&A unchanged at $765 million-$775 million. While our first quarter run rate suggests a lower target, we continue to anticipate spending will build as the year progresses. We reduced our interest expense target by $10 million to $155 million, as we expect to partially offset cash interest with more capitalized interest associated with our capacity expansion. Our other financial targets remain the same, including depreciation and amortization expense of approximately $325 million and capital expenditures of $800 million-$900 million. In summary, we're executing our strategy to deliver strong top and bottom line growth by improving our customer and product portfolio mix and offsetting input cost inflation through pricing actions and driving productivity savings across our supply chain. Volume elasticities in response to inflation-based pricing actions have been generally low, and we expect volume trends to improve as the year progresses. While we remain cautious about the effect of inflation on the consumer, we feel good about the start of the year and the health of the category, which gives us the confidence to raise our full year sales and earnings targets. With that, let me now turn it back over to Tom for some closing comments. Thanks, Bernadette. We delivered a strong quarter, and our operating momentum has us well positioned to deliver another year of solid sales and earnings growth. In addition, we're confident in the health of the global category and remain committed to investing in our business to drive sustainable, profitable growth and create value for our shareholders over the long term. Finally, as you may know, we will be hosting an Investor Day on Wednesday, October 11th, at the New York Stock Exchange. During the presentation, we'll discuss our view of the industry, our strategies for growth, and our long-term financial targets and capital allocation policies. If you haven't already, please register if you plan on attending in person, as space is limited. Otherwise, you can view our presentation via our webcast, which you will be able to access through our website. Thank you for joining us today. Now we're ready to take your questions. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you would like to ask a question. We'll take our first question from Peter Galbo with Bank of America. Hey, guys. Good morning. Thanks for taking the questions. Good morning. Morning. Tom and Bernadette, thank you both very much for the color around, you know, price mix and volume for the year. Tom, I was hoping to ask maybe a two-part question on volume. One, just maybe help us a little bit with cadence on when some of these, you know, backfill, higher margin customers potentially start to come online for you. And then, Bernadette, I know you kind of gave order of magnitude on international, but if there's anything more, a finer point on volumes between just what was, you know, intentional walk away versus the destock impact in the quarter would be helpful. Thanks very much. Yeah. So, Peter, it's Tom. So as Bernadette alluded to, it was limited to four accounts, and, you know, it was important for us to maintain our pricing discipline. One of the accounts in international, specifically, we were losing money on, so it was time just to part ways. And that had a big impact on our international volume. So, you know, it was a measured, discipline action we did. And the thing in terms of the first part of your question, we have line of sight to backfilling that volume. It does take time. It's not a linear match when you walk away. Been through this before, but we have a great commercial team that has identified a number of opportunities in the market in both North America and international, and we're actively working that. And as we stated in the prepared remarks, you know, volume is gonna be sequentially getting better over the next, you know, quarter and the back half of the year. You know, we expect the categories and really it, it's in good shape. So between organic growth... and, you know, some things that we have identified, I feel great about where we're at and how we're gonna execute, and continue to grow the volume in the back half of the year and, over the course of the next, several quarters. Yeah, and Peter, just- Got it. So the second question you asked, you know, that those volume exits started impacting our international sales in our fiscal fourth quarter of 2023. And the business that we chose to walk away from, I'd say about 90% of that relates to that, in terms of volume decline, you know, with the remainder being the destocking. Got it. Very, very helpful. Thank you. And then, Tom, you know, one question I've just been getting on the crop itself. Obviously, you know, the crop in your main regions is coming pretty well. I think there's been some issues in the East Coast Canada crop. Just curious kind of how you think that might impact the overall category here over the course of the next year in terms of industry tightness. Thanks very much. Yeah, Peter, I think the crops and, you know, we'll have a, as we do every January on our earnings call, kind of a debrief on how we're feeling about the overall crop and storage. Crop's in great shape worldwide, so I don't expect any impacts in any region in terms of challenges with the crop at this point. Thanks very much, guys. Yep. Thank you. We'll now take our next question from Tom Palmer with JP Morgan. Good morning, and thanks for the questions. I wanted to ask on the guidance boost. I would assume some flow through of the higher EMEA sales, but the bulk of the increase on earnings seems to be more related to the gross margin outlook. Is this mainly a reflection of pricing or a lower COGS inflation outlook? I realize there might have been some conservatism in the prior number, but just trying to understand the moving parts. Yeah. So, you know, we feel good about the operating momentum that we've had. It's been primarily related to pricing. You know, and we think that those financial targets are really prudent given the macro environment that we're facing, as well as just uncertainty regarding consumer health. So most of that's pricing and still really good about the operating momentum of the business. Okay. Thank you. And then I wanted to just follow up on that gross margin piece. Traditionally, we've seen second quarter gross margin come in above the first quarter and then third quarter come in above the second quarter. Is this cadence reasonable when we think about the build for this year? Yeah. So you're right. Typically, we do see a sequential step up in Q2. I think we'll still see a sequential step up, but it may be more muted because we're gonna be lapping some of those pricing actions that were taken last year, as well as the timing of the customer trade claims that I talked about. Understood. Thank you. Yeah. Hey, Tom, remember that, you know, what, what Brenda had mentioned before, yeah, we printed 29.4%. You know, but if you take away some of the timing impacts of that trade spend, probably a little bit south of 28%- Yeah. as a base. Yeah, that's right, Tom. So, so when I'm speaking to the step-up, I'm speaking up to more normalized 28% that I referred to. Okay. Understood. Thanks. Thank you. We'll now take our next question from Adam Samuelson with Goldman Sachs. Yes, thank you. Good morning, everyone. Good morning. Good morning, Adam. Morning. So I guess the first question is related, maybe to mix, and then clearly you're making some conscious decisions on moving away from low margin, from some lower margin business. But just more broadly, can you speak to maybe the... If we try to cut your volumes between kind of more traditional straight run fries versus some of the more upgraded products and battered and coated and the like that you're now producing. Can you help quantify kind of what that represents as a proportion of the business today and where that can be getting to, whether it's with some of these business exits more recently or over the next couple years? Because clearly, that's the mix has been a very powerful margin driver for the business and trying to dimensionalize how much, how much more room is there to go. Yeah, Adam, you know, strong price mix performance was the key driver of our better than expected financial results. As it relates to mix and how that relates to growth going forward, we'll be covering that in our industry Investor Call next week, and so, you know, we'll cover that more then. But again, strong price mix was the key driver of our better than expected performance. Okay. If I could just ask the second one. I know you talked about the kind of customer trends in Europe. With the EMEA, the acquired EMEA business, what was their organic volume growth in the quarter and the increased revenue contribution in EMEA? Is that a more positive volume outlook, more positive price mix outlook, or both? Yeah, so we feel really good about the EMEA performance. We have not given the prior year comp, because, as you know, the EMEA sales were not reported in the prior year in our sales number. It was recorded in our equity method earnings. But, you know, our estimate is largely in line for the remainder of the year at the run rate that we saw for EMEA in Q4 and Q1, from a sales perspective, about, you know, $360 million. Okay. All right. I appreciate that color. I'll pass it on. Thanks. We'll now take our next question from Matt Smith with Stifel. Hi, good morning. Morning. I wanna ask about the impact of walking away from low margin contracts and this mix management you've been pursuing. It's weighed on volumes over the past couple of quarters, and you mentioned that the actions in the International segment and the U.S. segment will be fully lapped by the fourth quarter. So do you expect to be in a position to be growing volumes as you exit this year? Meaning you've lapped those, you've lapped the drag from walking away from those contracts and you've made some progress on the backfill with higher margin business? Yes, Matt, I fully expect, as I said earlier, that in the back half of the year, we should start to see positive volume trends. And, you know, that's a function of lapping the exited business, but also we have, you know, line of sight to additional business that we're gonna start to backfill with. And that takes time, but I fully expect, based on how we've got the business forecast and the opportunities we have, that we're gonna start seeing positive volume trends in the back half. Okay. Thank you for that. And maybe if I could ask one more question here. You mentioned that the capacity in China came online in the quarter. Do you have any update to the timing for the American Falls facility? Is that still expected to be on time for beginning production early in 2024? Yeah, we, you know, still expect in the late spring of 2024, early summer, for American Falls to transition to, you know, our vertical startup, and it takes some time to get the plant up and running, but absolutely late spring, early summer. Thank you, Tom. I'll leave it there and pass it on. Thanks. We'll now take our next question from Rob Dickerson with Jefferies. Hey, Rob, you might be on mute. Due to no response, we'll move on. Well- Would you like to move on? The next question. Yep. Okay. We'll now move on to Robert Moskow with TD Cowen. Hi there. Thanks for the question. Good morning. I hate to keep the magnifying glass on volume, but Tom, when you talk about positive volume in the back half, the way we had modeled it was that the easy comparisons to the volume you walked away from really started in size in fourth and not in third. So is that correct? And if so, can we expect positive volume in third as well, even though you know even though the volume you walked away from may not have been as much? Yeah. We'll never have, yeah. As it relates to the volume in our North America segment, I think I alluded to the fact that we started to walk away from that in third and fourth quarter. In our International segment, we started to see the effect of what we exited in the fourth quarter of last year. So as we said, we do expect to see volume continue to improve, both as we lap that business we exited and as we bring on new business. Okay, so is it premature to start dicing it up by quarter, and should we just think of it as the second half, or can we say- Yeah third quarter off as well? Yep. I would just think of it as the second half of the year. Okay. Got it. And then my other question and is, you know, I was hoping you'd give a little more color on, like, what percent of your contracts come up for renewal seasonally, and also as it relates to, like, I think a lot of the industry is on three-year contracts instead of one. So, like, how much is up for grabs in the next three to six months, just roughly speaking, is there a way to quantify that? Yeah, Sure, Robert. In our remarks, we got about 20% in play. We feel confident about where we're at in those discussions, how things are progressing for us this year. So we'll get through all that, you know, over the course of the rest of this year. And, you know, at a later time, as we always do, we'll give some color on what we've got coming up in terms of contracting for our next fiscal year, and how that's progressing. But right now, you know, we've worked through most of it, feel good about where we're at. Obviously, it's all baked into our guidance. We have 20% in play, feel good about where it's at. Commercial team is executing at a high level, great discussions and, you know, more to come on that. Then, you know, the next, like we do usually, in our July call, we'll talk about what's coming up for contract renewal in the next fiscal year. Yeah. Sorry, I was on the Conagra call. So, 20% in play, and does it all kind of happen- How'd that go? Pardon me? Nothing. Oh. That's fine. All right. No problem. Is it all in the first half, or is it like seasonally, or is it just like kind of spread out across the year this year? Oh, typically, you know, it's we start late spring through early fall when we start the contracting discussions. Early fall. Okay. All right. Thanks so much. Thanks, Robert. We'll now take our next question from Johnny Shamir with Barclays. Great. Thanks. Hey, guys, it's Andrew Lazar. Hope all is well. And I joined late as well, so I apologize if some of this was covered. But I think, I think, Tom, I remember, I think last quarter you started to talk a little bit about the, you know, the planned sort of pivot, right? To a little bit more of a focus on profit dollars going forward, as that's the way you obviously grow the business and you've had this significant margin recovery, you know, kind of much of which has already taken place. And that, that kind of makes sense, right, as you think about what, what you're looking to do. But I think there was some confusion, and maybe some might have taken that to mean that, you know, as you move towards profit dollars, that somehow you were expecting, you know, sort of ongoing or structural margin erosion going forward as some of the new capacity comes online, and, you know, that you'd have to sort of go after lower margin business, somehow to, you know, fill that capacity. I was just hoping you'd maybe, and maybe you'll get into this a lot more, obviously, next week, but maybe just clarify a little bit of that, because I do think there was some confusion around that. You know, I logically understand, right, the shift now the margins have kind of recovered to much more of a profit dollar focus. Thanks so much. Yeah, Andrew, we're going to stay disciplined with our revenue growth management initiative. And, you know, so as we think about opportunities going forward, we are gonna look at maintaining our margin profile, and, and we're gonna stay disciplined. And, you know, a testament to that is our decision to walk away from some of this lower margin business that we've been talking about. So it's all about maintaining the discipline and what we're going to focus on. We've worked really hard to rebuild our margin profile in this business, and we're gonna continue to focus on that and maintain our discipline around the margin structure. Thanks. See you next week. Yep, see you next week, Andrew. We'll now take a question from Rob Dickerson with Jefferies. Great. Thanks so much. I was on mute. I just, I guess quick question for you, Tom, just I guess with respect to the China plant, right, that's up and running. Maybe coming back to Andy's question a little bit, but, asked a different way. I'm just curious, like, exiting the business, you know, back in 2024, but now you have a new facility. You know, is, is there now this conversation, you know, that you've been having and now to be activated kind of with the sales force, such that you say, okay, there's opportunity here, right? You know, it is, is up, maybe off a lower base, it's still up. There's not real demand destruction, you know, going forward. It sounds like really expected, such that that sales force can actually go try to take, you know, material share, let's say, even non-U.S. markets, just kind of given the new facility. First question. Yeah, so the China facility, we're in early stages of our startup, so it takes some time to get it up and running. We are running production there today. It's gonna be specifically targeted for that market. You know, and we've got things identified in the China market from an opportunity and business standpoint, but it takes some time to get the plant up and running and efficient and kind of work the kinks out. But we're early on, so you know, it's gonna be several more quarters before we see the impact of that coming online. All right. Fair enough. And then I just think you, you said, correct me if I'm wrong, that, you know, traffic was up, I believe, mid-single digit in Europe. Just two QSRs, but I know traffic was up in Europe, sounds like better than the U.S. Maybe just any kind of general perspective as to why that might be the case, kind of, you know, market, the markets. Hey, hey, Rob. It's probably a little bit of... Might have a little bit of softness last year, just as, you know, coming out of COVID and everything like that. But overall, trends seem to be pretty good. I think, with inflation still a factor, but it's cooling or at least a little bit better than we were expecting, at least from the energy cost standpoint. So I think just, personal income helping traffic generate or we're holding up pretty well. All right, great. And then just quickly, you know, harvest coming in line with historic averages, you know, coming off two bad years, maybe just as a reminder, kind of, you know, when we start to see that, you know, 35% of COGS maybe starts to disinflate or let's call it deflate, year-over-year. It sounds like, you know, that might be what, like a back half fiscal 2025 dynamic? Yeah, Rob, so just a reminder, our cost and contract raw input structure is baked. So you know, wherever the crop yields and all that comes out, it really isn't gonna impact our overall input costs for the balance of this fiscal year. You know, so it's you're not gonna see any decline in our cost structure because the crop's great. It's just, we agreed to a contract last year ago, and it is what it is. Yeah, I think that's right, Rob. And the only piece that's different in the European market is that generally we'll contract for about 75%, whereas, you know, there's the open market for the remaining 25%. Then we've seen of late that the open market prices have started to come down. Right. But as we're, you know, I'm thinking all the way forward to, let's say, the end of, you know, back half of next fiscal year, right? I'm assuming as we go into these contract, you know, negotiations kind of toward the end of this calendar year, right? Harvest is good this year, probably puts you in a pretty good position in those discussions. We're not gonna comment on negotiating discussions publicly. We don't do that, and you know, it'll be. We'll let it play out the way it plays out. We'll be disciplined in the process. We follow every year, and you know, at the appropriate time, when we come to some agreement, you know, as we always do, and the market knows, you'll see what our raw price is gonna be for the next year. All right, great. Thank you. See you next week. Yeah. Thanks. As a final reminder, that is star one if you would like to ask a question. We'll now take a question from William Reuter with Bank of America. Hi. Just quickly to make sure, on the last question, you contract for 75% in Europe, but that's 100% in North America. Is that right? That's correct. Okay, and then, you have 20% of your contracts that are up for renewal. How does that compare to where you would have been last year or in a typical year? Yeah, typically, we have about 25% up for renewal, so slightly down, but around average. Okay. And then just lastly for me, the elevated CapEx of $800 million-$900 million, how should we think about that CapEx number over the next handful of years? Yeah, so CapEx, you know, fluctuates year to year. As we've discussed in the past, we had a pent-up demand after COVID, where we've had a couple years of higher spending. I'm gonna speak more to that during Investor Day in terms of how to think about that over the next few years. So I'll go ahead and leave it for Investor Day. I assume that might have been the answer. Okay, that's all for me. Thank you. That does conclude our question and answer session. I'd like to hand the conference back over to Mr. Congbalay for any additional or closing comments. Thanks for joining the call today. If you do plan on or want to come to our Investor Day, please shoot me an email, and I can send you the invite if you haven't gotten it already. If you do... If you have gotten it and you do want to attend, you know, since it's at the New York Stock Exchange, you do have to register in advance, so we can put you on the list to get in. Any questions on the call today, or, or kind of going forward, shoot me a note. We can set up some time. But, again, thanks for joining the call, and we'll talk to you next week. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.