Jim Salera

Jim Salera asked for clarification on the approximately $1 million shortfall in Zevia's Q4 top-line guidance, specifically if it was solely due to Costco timing shifts. Salera also questioned the timeline for the full market rollout of Zevia's new packaging and any associated marketing programs. Finally, he sought insight into the overall marketing spending for 2026, balancing cost savings with brand reinvestment.

Answer

CFO and Principal Accounting Officer Girish Satya confirmed the Q4 top-line shortfall was primarily due to the Costco timing shift, moving regional rotations from Q4 to a national program in Q1. President and CEO Amy Taylor stated that new packaging is appearing on shelves now, with a full rollout largely into Q2, supported by a digital campaign in March and a high-impact spring/summer marketing campaign. Girish Satya added that marketing spend in 2026 is projected to be 12-13% of revenue, a slight increase as a percentage over 2025.

Jim Salera asked for clarification on the Q4 top-line guide miss, specifically if it was solely due to Costco timing shifts. He also questioned the timeline for the new packaging rollout and associated marketing programs, and sought insight into the overall marketing spending for 2026.

Answer

Girish Satya, CFO and Principal Accounting Officer, Zevia PBC, confirmed the Q4 top-line miss was primarily due to the Costco timing shift, moving volume from Q4 to Q1. Amy Taylor, President and CEO, Zevia PBC, stated new packaging is appearing now and will largely roll out into Q2, supported by a digital campaign in March and a significant spring/summer marketing campaign with high-reach personalities. Girish Satya added that marketing spend in 2026 will increase to 12-13% of revenue, a slight increase over 2025.

Jim Salera of Stephens Inc. asked about the factors driving the sequential increase in consumer metrics like household penetration and purchase frequency. He also requested details on Zevia's product rotation and strategy within the club channel.

Answer

President & CEO Amy Taylor attributed the improved consumer metrics to a combination of increased distribution visibility (e.g., Walmart expansion, better grocery placement) and successful product innovation driving trial and repeat purchases. Regarding the club channel, she highlighted that variety packs are key for discovery and that while currently rotational, strong performance supports the goal of becoming an everyday item.

Jim Salera inquired about the carryover pricing into 2026, assuming no incremental price actions, given Portillo's stated focus on transaction growth over pricing. He also asked for commentary on attachment and mix, specifically how the Perks program might be influencing these factors and the average ticket.

Answer

Michelle Hook, CFO, detailed that 1.5 points of pricing rolled off in January 2026, with another 1 point in April and 0.5-0.7 points in June from 2025 actions. She noted that Perks offers are pressuring the net effective price, with Q4 2025 pricing at 2.3% and Q1 2026 potentially below 1%. Regarding mix, she stated that Perks offers are not causing significant ticket degradation, with the average ticket around $23.60, and that mix headwinds (lower items per transaction, trade-downs) have moderated, partly due to kiosks.

Jim Salera asked for color on Portillo's carryover pricing into 2026, assuming no incremental price, given the focus on transaction growth, and inquired about attachment and mix, particularly as it pertains to the Perks program.

Answer

Michelle Hook, CFO, detailed pricing actions rolling off in January (1.5 points), April (1 point), and June (0.5-0.7 points) of 2026, noting that Perks and other offers are pressuring net effective pricing. She added that Perks offers have not caused significant ticket degradation, with the average ticket around $23.60. While mix headwinds persist (lower items per transaction, trade-downs), they are moderating, partly due to kiosks, which Portillo's aims to leverage further.

Jim Salera of Stephens Inc. asked for insights into the Portillo's Perks loyalty program's geographic reach and its potential in expansion markets, and also inquired if new market AUVs could accelerate in 2026.

Answer

CEO Michael Osanloo highlighted the success of the new Perks program, which has reached 1.9 million members across just 95 restaurants, calling it a powerful future tool for acquisition and frequency. CFO Michelle Hook noted that while the company is still learning the sales curves in new markets, the long-term AUV target of $5.9M-$6.3M by year three for new classes of restaurants remains the goal.

Jim Salera with Stephens inquired about First Watch's underwriting for the industry in fiscal year 2026, how their expectations align, and the anticipated progression of the mix component within tickets throughout the year.

Answer

CFO Mel Hope noted a cautious outlook for the industry but expects First Watch to outperform, consistent with historical trends. CEO Chris Tomasso added that the new core menu rollout is expected to provide mix upside, influencing the decision not to take Q1 pricing. He also reiterated Black Box's projection of a 3% industry-wide traffic decline for 2026, which First Watch aims to outperform.

Jim Salera asked about First Watch's FY 2026 outlook, including the company's underwriting for the industry environment and the expected progression of the mix component within tickets.

Answer

Mel Hope, Chief Financial Officer, expressed caution regarding the overall industry environment for 2026 but noted First Watch's historical outperformance against Black Box data. He stated that the company does not typically project specific mix components in its guidance. Chris Tomasso, CEO and President, added that positive mix upside is expected from the new core menu rollout and reiterated confidence in outperforming the industry's projected 3% traffic decline.

Jim Salera of Stephens Inc. inquired about the shift in First Watch's customer base to a younger demographic, asking whether it was driven by geographic expansion or the growth in third-party delivery. He also questioned if there were notable differences in visit frequency or average check size for these younger consumers.

Answer

President & CEO Chris Tomasso confirmed the demographic shift is due to a combination of factors, including entering new markets, an evolved restaurant prototype, advanced culinary offerings, and a strong social media presence. He noted that while there are no massive shifts in menu mix, the introduction of alcohol has also helped attract a younger audience. Tomasso emphasized the company's focus on continuous evolution to maintain long-term relevance.

Jim Salera inquired about the potential impact of larger-than-expected tax refunds on incremental consumption, particularly in Q2, and whether historical precedents show immediate flow-through into transactions or higher attachments.

Answer

Michael Bailen, VP of Investor Relations, noted that historically, shifts in refund timing can affect numbers, and larger refunds have the potential to be a tailwind, possibly leading to increased spending.

Jim Salera asked about the potential impact of tax refunds on consumption, particularly in Q2, inquiring if historical data shows a flow-through into restaurants, and whether this manifests as increased transactions or higher attachments.

Answer

Michael Bailen (VP of Investor Relations) acknowledged that historically, shifts in refund timing can be seen in their numbers, suggesting refunds have the potential to be a tailwind. He noted that whether this specific round of refunds benefits them and how it manifests (transactions vs. attachments) remains to be determined, but typically larger refunds can lead to increased spending.

Jim Salera asked about the retail segment of the business, inquiring if the company could quantify its impact, its potential size, and how it leverages strong brand equity to access new consumer groups at potentially decent margins.

Answer

Jerry Morgan, CEO, stated that all retail initiatives are primarily focused on brand awareness and keeping Texas Roadhouse top-of-mind for consumers in grocery stores. He highlighted the significant success of the 'Inspired by' mini rolls, noting strong demand and sales, but mentioned it's still early to fully quantify the revenue impact, though they are very proud of its performance.

Jim Salera inquired about quantifying the impact and potential size of the retail segment of the business, specifically mentioning the success of mini rolls.

Answer

Jerry Morgan, CEO, stated that all retail initiatives are primarily focused on building brand awareness and engagement, with the logo in grocery stores keeping Texas Roadhouse top of mind. He highlighted the significant success and high demand for the 'Inspired by' mini rolls, noting that while it's still early to quantify the full revenue impact, the product is selling exceptionally well.

Jim Salera from Stephens Inc. asked for details on the growth strategy for Bubba's 33, including its regional expansion plan and methods for engaging new guests as the brand's visibility increases.

Answer

CEO Gerald Morgan explained that the growth strategy for Bubba's 33, which is now in 16 states, involves building out territories around multi-unit operators. He emphasized that the focus has been on stabilizing leadership and perfecting menu execution, which now allows the company to develop the brand at a higher rate than in recent years.

Jim Salera asked for a breakdown of Cheesecake Factory's Q4 traffic and transaction, and whether negative mix from bowls and bites is expected to be a continued headwind in FY2026. He also inquired about historical data regarding tax refunds impacting restaurant demand.

Answer

EVP and CFO Matt Clark stated Q4 pricing was 3.5-4%, mix was -1.8%, with traffic as the delta. He anticipates negative mix to continue in FY2026 at a lesser rate, around -1%, partially offset by increased ordering. Regarding tax refunds, he noted the company doesn't rely on them, as improvements are driven by execution and innovation, and they don't see strong correlations for their income cohort.

Jim Salera asked for a breakdown of Q4 traffic and transaction, particularly the mix component related to bowls and bites, and whether negative mix is expected to be a continued headwind in FY26. He also inquired about the historical impact of larger tax refunds on restaurant demand.

Answer

EVP and CFO Matt Clark reported Q4 pricing at 3.5%-4% and negative mix at 1.8%, with traffic as the delta. He anticipates negative mix to continue in FY26 but at a lesser rate due to improved incident rates for new menu items. Regarding tax refunds, Matt Clark stated the company does not rely on them, as their performance is driven by execution and innovation, and they typically don't see pronounced correlations with such external factors.

Jim Salera requested the Q2 comparable sales breakdown for North Italia and asked about the drivers of its softness. He also inquired about customer trends at North Italia by income bracket.

Answer

Etienne Marcus, VP of Finance & IR, provided the comp breakdown: 4% price, -1% mix, and -4% traffic. Matthew Clark, Executive VP & CFO, clarified that the negative comp is misleading due to significant sales transfer from highly successful new units. He noted that netting out this impact, the comp would be around 1%. He added that North Italia attracts a slightly higher-income but still broad, aspirational demographic, evidenced by strong performance in new markets.

Jim Salera asked about the characteristics of consumers coming to Vita Coco products via the new Walmart placement, specifically if they are new to the brand or have distinct demographic profiles. He also inquired about advertising campaigns, in-store activations, or packaging plans for the year to drive the active hydration use occasion.

Answer

CEO Martin Roper stated it's too early for specific consumer data from the new Walmart placement, but expressed satisfaction with the significant improvements in SKUs, shelf space, and visibility, noting Walmart is adding 5-6% to total scans and gaining category share. Executive Chairman Mike Kirban and Martin Roper explained that active hydration is being built into overall communication, emphasizing 3.5 times the electrolytes of leading sports drinks and natural ingredients. They mentioned activations in youth sports, partnerships with Rush Soccer, and World Cup soccer player programs, along with testing TV media, as key initiatives for the year.

Jim Salera requested details on the Walmart placement, including any characteristics of consumers coming to the product via this channel, such as whether they are new to the brand or specific demographics. He also followed up on the active hydration use occasion, asking about specific advertising campaigns, in-store activations, or packaging plans for 2026 to drive visibility for this use case.

Answer

CEO Martin Roper explained it's too early for consumer data on the new Walmart set, which took place mid-November. He highlighted the significant improvement in SKUs and shelf space, noting that Walmart is adding 5-6% to total scans and gaining category share. He believes Walmart can be a strong coconut water destination and sees this as a positive leading indicator for other mass retailers. Regarding active hydration, CEO Martin Roper stated that the '3.5x electrolytes of leading sports drinks' message is being built into overall communication. Executive Chairman Mike Kirban added that they are activating in youth sports (e.g., Rush Soccer) and have a program with U.S. World Cup soccer players. He emphasized that the hydration aspect and electrolytes are the underlying reasons for coconut water's success, regardless of other usage occasions. They are also testing TV media.

Jim Salera of Stephens Inc. asked for clarification on the gross margin cadence for the second half of the year and whether the full-year guidance of 36% is achievable if a potential 19% tariff on products from the Philippines materializes. He also asked for a good dollar run-rate for the U.S. private label business.

Answer

CFO Corey Baker confirmed Q3 gross margins would be sequentially lower due to the timing of tariff impacts and pricing actions, before improving in Q4 to meet the full-year target of approximately 36%. Executive Chairman Michael Kirban stated that while the tariff situation is fluid, the company believes it can manage higher rates through a combination of margin mix, declining ocean freight, and potential pricing. Baker suggested the private label baseline should grow from Q2 levels.

Jim Salera from Stephens Inc. inquired about the expected sequencing of coach productivity improvements throughout 2026, specifically asking if the younger coach composition also applies to the consumer base. He also questioned the top-line revenue trajectory for the full year, seeking clarity on whether revenues could stabilize or turn positive by Q4. Furthermore, Salera asked how Medifast's new product innovations and Fuelings format would cater to customers who have used or are currently using GLP-1 medications.

Answer

Dan Chard, Chairman and CEO, explained that the year-over-year improvement in coach productivity, the first since mid-2022, is driven by coaches effectively communicating the new metabolic health story, attracting a new type of customer. He anticipates sustained productivity and improvement with new product introductions in the latter half of the year, alongside significant cost structure improvements. Regarding revenue sequencing, Chard indicated that the annual guidance reflects increased confidence in the metabolic health transition, suggesting stabilization in the top line. Nick Johnson, President, added that the metabolic health narrative, focusing on visceral fat reduction and lean mass preservation, resonates with GLP-1 users concerned about muscle loss, positioning new products to address these needs.

Jim Salera from Stephens Inc. inquired about the sequencing of coach productivity and top-line revenue growth into 2026, including potential for flat or positive revenue by Q4. He also asked about the demographic composition of new clients, particularly those using or transitioning from GLP-1 medications, and the impact of new product innovations and the Fuelings format rollout.

Answer

Chairman and CEO Dan Chard highlighted the first year-over-year improvement in coach productivity since mid-2022, attributing it to a new metabolic health story resonating with a different customer type and significant cost structure improvements. CFO Jim Maloney confirmed the company's increased confidence in annual guidance and anticipated top-line stabilization. President Nick Johnson elaborated on the metabolic health narrative, emphasizing the proprietary Metabolic Synchronization science for visceral fat reduction and lean mass preservation, which addresses concerns of GLP-1 users and excites coaches about future product innovations.

The analyst inquired about the evolution of the coach base in the context of GLP-1 medications, the performance and adoption of the ASCEND product line, and the company's future strategy for corporate-led marketing.

Answer

Company executives explained that new coaches are trained for the GLP-1 environment, with a significant portion having experience with clients using these drugs. The ASCEND product is meeting expectations, often used by clients after the core 'five and one' program. The marketing strategy will continue to prioritize coach-led acquisition, which is more effective for new clients, while corporate marketing will be used strategically for re-engagement and search engine management.

Jim Salera from Stephens Inc. asked about the changing composition of OPTAVIA coaches in response to GLP-1s, the performance of the ASCEND product line, and the future role of company-supported marketing versus coach-led acquisition.

Answer

Chairman & CEO Dan Chard and Chief Field Operations Officer Nicholas Johnson explained that new coaches are trained for the GLP-1 environment, with many having personal or client-related experience. Chard noted that while the ASCEND line meets expectations, the core 'five and one' plan is also proving effective for GLP-1 users needing to preserve lean mass. He also stated that marketing will now focus on coach-led acquisition, which is more efficient, with a pared-back corporate advertising budget primarily for search engine optimization.

Jim Salera inquired about strategies to stabilize the traditional loaf category, considering shifts to premium/value and smaller loaves, and the expected top-line growth cadence for 2026, including the impact of Simple Mills and the 53rd week.

Answer

Ryals McMullian, Chairman and CEO, highlighted the importance of Nature's Own and the need to adapt to evolving consumer preferences (premium, value, small loaves due to demographics). He emphasized upcoming changes for Nature's Own and parallel supply chain review. Anthony Scaglione, CFO, outlined the 2026 guidance, factoring in category headwinds, the extra week, and growth from Simple Mills, share, and rate.

Jim Salera asked about industry efforts to stabilize the traditional loaf category, considering the ongoing decline, shifts to premium/value, and the impact of small loaves. He also sought clarity on the top-line growth cadence for 2026, specifically the interplay between the Simple Mills ramp-up and the legacy portfolio, and the effect of the 53rd week lap.

Answer

Ryals McMullian (Chairman and CEO, Flowers Foods) emphasized the importance of Nature's Own and traditional loaf, noting shifts to premium and value (including small loaves driven by demographics and value). He highlighted the need to evolve the shelf, innovate for Nature's Own, and address both demand and supply chain efficiency. Anthony Scaglione (CFO, Flowers Foods) detailed the 2026 guide, factoring in a 4% category decline, 150 basis points pressure from the extra week, and growth from Simple Mills, share, and rate.

Jim Salera inquired about the performance of the 'other' segment, specifically food service, given broader industry headwinds, and also asked for color on the private label business. He then asked if food service performance correlates with industry traffic and for insights into 2026 gross margin drivers, considering reduced tariff headwinds but rising ag commodity prices.

Answer

Chairman and CEO Ryals McMullian confirmed food service pressure due to the economic environment but noted improved profitability over the past 2-3 years. He stated that food service recovery tends to ebb and flow with the economy and that traffic is a good indicator. McMullian explained private label weakness despite economic conditions, attributing it to narrowed price gaps with lower-priced branded products. CFO Steve Kinsey, while not giving 2026 guidance, indicated expectations for continued inflationary pressure on input costs, despite tariffs only impacting part of the current year.

Jim Salera asked for more detail on the 'other' segment's performance, particularly the food service business, given broader industry headwinds. He also sought clarification on private label business performance and how to model food service traffic. Additionally, he questioned the interplay between reduced tariff headwinds and rising agricultural commodity prices when modeling 2026 gross margins.

Answer

Chairman and CEO Ryals McMullian explained that food service was under pressure due to the economic environment, but profitability had improved. He noted private label weakness due to narrowed price gaps with branded products and suggested using industry traffic as an indicator for the broad food service business. CFO Steve Kinsey stated that while not providing 2026 guidance, they anticipate inflationary pressure on input costs, including volatile wheat commodities.

Jim Salera asked about the successful launch of Wonder cakes, the lack of cannibalization of Tastykake, the role of Simple Mills in future innovation, and whether Simple Mills' presence in the club channel is increasing.

Answer

Chairman & CEO A. Ryals McMullian expressed that the Wonder cake launch has exceeded expectations and that he was pleasantly surprised by the minimal cannibalization, attributing it partly to different geographic strengths. Regarding innovation, he clarified his earlier comments were about the core category but confirmed Simple Mills will also innovate more frequently. He noted that Simple Mills' presence in club stores is part of their normal rotation and that the brand continues to grow distribution points despite a recent cyber attack affecting a distributor.

Jim Salera asked about the successful Wonder cake launch, questioning why it did not cannibalize Tastykake sales. He also inquired about Simple Mills' role in the company's innovation strategy and its distribution presence in the club channel.

Answer

CEO A. Ryals McMullian expressed pleasant surprise at the lack of cannibalization, attributing it to geographic differences, with Tastykake strong in the Mid-Atlantic and Wonder being a national brand. He noted the Wonder launch exceeded expectations. McMullian clarified that while his primary innovation comments were about the core portfolio, Simple Mills will also innovate aggressively. He confirmed Simple Mills has a standard rotation in the club channel and continues to grow distribution points, performing well despite a distributor's cyber attack.

Jim Salera asked for more details on the decision to divest the snacks portfolio, specifically what changed in the company's thinking since the 2023 investor day, given previous focus on snacks innovation. He also inquired about reallocating innovation resources and the impact of stranded overhead costs.

Answer

CEO Alison Lewis explained that the divestiture aligns with simplifying the portfolio, as snacks is an impulse category requiring capabilities (heavy innovation, strong marketing, DSD-like merchandising) difficult for Hain to develop, unlike its center-of-store categories. She noted snacks had become financially challenged and over-reliant on the club channel. CFO Lee Boyce added that the operating model, talent profile, and capital allocation priorities for snacks were different, and the remaining North American portfolio is expected to have a stronger financial profile with gross margins above 30% and EBITDA margins in the low double digits. He confirmed $20 million-$25 million in stranded costs would be mitigated within 6-12 months, freeing up resources for innovation in other categories.

Jim Salera asked about the strategic rationale behind divesting the snacks portfolio, contrasting it with previous growth focus areas, and inquired about the reallocation of innovation resources and the impact of stranded overhead costs.

Answer

President and CEO Alison Lewis explained that the divestiture simplifies the portfolio, allowing focus on categories where Hain has a stronger 'right to win,' as snacks is an impulse/demand creation category requiring different capabilities. CFO Lee Boyce added that the remaining North American portfolio is expected to have higher gross margins (30%+) and EBITDA margins (low double digits). Lee Boyce also stated that stranded costs are estimated at $20 million-$25 million, with plans to mitigate most within 6-12 months. Alison Lewis confirmed that freed-up resources would be directed towards innovation in the remaining portfolio, citing positive results from current innovations.

Jim Salera from Stephens Inc. asked for insights into how Hain Celestial's current optimization efforts differ from the 'Hain Reimagined' program two years ago, specifically where the previous program fell short and what new angles or focus areas are expected to jumpstart the business. He also questioned the anticipated cadence of leverage throughout fiscal 2026, particularly if Q1 and Q2 would see a pick-up before declining, and if a high watermark quarter for leverage is expected.

Answer

Alison Lewis, Interim President, CEO & Director, stated that the previous program focused on structure and process rather than decisive actions. She highlighted current differences including aggressive pricing across nearly the entire portfolio, a significantly ramped-up innovation pipeline, local empowerment through a regional operating model (e.g., two innovation hubs), and continued focus on supply chain productivity and working capital reduction. Lee Boyce, CFO, confirmed an expected free cash flow outflow in Q1, with benefits from cost focus and initiatives materializing more in the second half, leading to improved cash generation and leverage reduction later in the year, particularly from inventory management.

Jim Salera asked about the impact of SNAP rule changes in 2026, including work requirements and state restrictions on purchases, inquiring about the overall percentage of Hershey's portfolio exposed to SNAP dollars and the company's strategy for these changes. He also asked if Hershey could quantify the incremental uplift expected from the 10 different cultural and seasonal events planned for the year compared to a normalized year.

Answer

CEO Kirk Tanner explained that early assessment of SNAP waivers in states is noisy, but Hershey has factored adoption into its outlook, viewing it as a manageable headwind. He noted that only 2 of 12 approved states have implemented candy waivers so far. Regarding cultural and seasonal events, Kirk Tanner stated the uplift is reflected in the outlook, building on strong seasonal execution and leveraging consumer-loved brands in moments like the Olympics and NCAA Final Four to create an 'always-on' approach for both salty and sweet brands.

Jim Salera asked about the overall percentage of Hershey's portfolio exposed to SNAP dollars and how the company is thinking about the new SNAP rule changes (work requirements, state restrictions) in 2026. He also inquired about quantifying the incremental uplift expected from the 10 different cultural and seasonal events planned for 2026 compared to a normalized year.

Answer

Kirk Tanner (President and CEO) stated that early assessment of SNAP waivers (implemented in only 2 of 12 approved states so far) is noisy, but Hershey has factored adoption into its outlook and views it as a manageable headwind. He explained that the uplift from cultural and seasonal events is reflected in the robust top-line outlook, leveraging Hershey's excellence in executing seasons and consumer-loved brands to participate in more cultural moments (e.g., Olympics, NCAA Final Four), creating an 'always-on' approach for sweet and salty brands.

Jim Salera asked about the strong performance of Hershey's salty snacks business, noting a 14% year-over-year consumption increase and volume-driven share gains. He inquired about the driving factors behind this success and sought commentary on the 4Q outlook for the business, including any innovation plans.

Answer

President and CEO Kirk Tanner expressed excitement for the salty business, highlighting SkinnyPop's refresh and growth in popcorn, Dot’s leadership in the pretzel category, and the opportunity with Pirate’s Booty in the Puffs segment. He emphasized the focus on permissible and premium snacking, allowing the portfolio to grow ahead of the category. He also confirmed momentum continuing into 2026 with a pipeline of innovation across Dot’s, SkinnyPop, and Pirate’s Booty.

Jim Salera asked about the strong performance of the salty snacks business, noting a 14% year-over-year increase in consumption and share gains driven by volume, contrasting with an anemic category. He inquired about the driving factors and the outlook for Q4, including any innovation plans.

Answer

CEO Kirk Tanner expressed excitement for the salty business, highlighting SkinnyPop's refresh and growth in popcorn, Dot's leadership in pretzels, and Pirate’s Booty's opportunity in the Puffs category. He emphasized that the collection of brands in permissible, premium snacking allows growth ahead of the category. He confirmed momentum into 2026 with an exciting innovation pipeline across Dot's, SkinnyPop, and Pirate’s Booty.

Jim Salera from Stephens Inc. asked about the drivers of outperformance in the salty snacks portfolio, particularly Dots and Skinny Pop, and inquired about opportunities to expand multipack distribution and innovation.

Answer

Chairman, President & CEO Michele Buck attributed the salty snacks' success to their permissible and premium positioning, continued household penetration gains, and effective marketing. She highlighted flavor innovation, price pack architecture, and new products like Reese's filled pretzels as key drivers. She confirmed that multipacks are a significant growth lever with a lot of upside ahead.

Jim Salera asked about the drivers of strength in the salty snacks portfolio, particularly Dots and Skinny Pop, and inquired about opportunities to expand multipack distribution and leverage innovation within that format.

Answer

Chairman, President & CEO Michele Buck attributed the salty snack success to the portfolio's permissible and premium halo, strong consumer momentum, and increased household penetration. She highlighted marketing, flavor innovation like Buffalo Dots, and price pack architecture as key levers. She confirmed that multipacks are a significant growth area where Hershey is expanding its SKU count and gaining distribution, with a lot of upside remaining.

Jim Salera asked about the drivers of strength in the salty snacks portfolio, specifically Dot's and SkinnyPop, and inquired about the opportunity to expand multipack distribution.

Answer

Chairman, President & CEO Michele Buck attributed the salty snacks' success to their permissible/premium positioning, continued gains in household penetration and distribution, and effective marketing. She confirmed that multipacks are a significant growth lever with substantial upside, and the company is actively expanding its SKU portfolio and distribution in that format.

Jim Salera from Stephens asked about Bachan’s potential on the margin side, given its 100% co-manufacturing model and Marzetti's capabilities for in-house production. He also inquired about Bachan’s current food service sales and future opportunities, and sought clarification on the Q3 sales cadence, considering the Easter pull-forward and prior year's negative comp.

Answer

CEO Dave Ciesinski stated that Bachan’s is a very high-margin business, selling at a premium price point, and its existing margins are accretive to Marzetti's retail segment gross margin. He identified opportunities for further margin improvement through Marzetti's manufacturing, procurement, and distribution capabilities. Ciesinski noted that Bachan’s currently has very limited food service sales, presenting a significant opportunity for Marzetti to leverage its national account reach for items like barbecue or wing sauces, and tabletop applications. CFO Tom Pigott projected low single-digit revenue growth for retail in the second half of the fiscal year, fairly even by quarter, despite the Easter tailwind and difficult new item launch comps in Q3.

Jim Salera inquired about Bachan’s potential margin contribution, given its 100% co-manufacturing model, and its current and prospective sales in the food service segment. He also sought clarification on the expected sales cadence for the third fiscal quarter.

Answer

CEO Dave Ciesinski confirmed that Bachan’s is a high-margin, premium-priced business whose existing margins are accretive to Marzetti's retail segment gross margin, with further opportunities for enhancement through manufacturing, procurement, and distribution synergies. He noted that Bachan’s currently has very limited food service sales but represents a significant opportunity for Marzetti to leverage its national account capabilities. CFO Tom Pigott projected low single-digit retail revenue growth for the second half of the fiscal year, expecting it to be fairly even by quarter, despite the Easter pull-forward and difficult new item launch comps in Q3.

Jim Salera asked if BellRing Brands has data on consumer shopping behavior for challenger brands when promotions cease, specifically if consumers revert to previous brands after being drawn by discounts.

Answer

Darcy Davenport, President and CEO, stated they don't have specific 'bump and stick' data but are monitoring it closely. She noted that the increased promotional spending by insurgent brands in 2026 is primarily due to event frequency rather than depth, and this higher frequency has been conservatively embedded into their guidance.

Jim Salera asked about consumer shopping behavior for challenger brands, specifically if consumers revert to their previous brands once promotional offers from these new entrants conclude.

Answer

President and CEO Darcy Horn Davenport stated that while they don't have specific 'bump and stick' data, they are closely monitoring the situation. She noted that insurgent brands have increased the frequency of promotional events, particularly in club and mass channels, as they try to gain a foothold.

Jim Salera from Stephens Inc. asked about the future promotional cadence, considering that increased industry capacity might lead to more new brands launching with heavy promotional support.

Answer

CEO Darcy Horn Davenport stated that she expects the company's promotional cadence to remain consistent with historical patterns, which follow consumer behavior. She outlined the typical cycle: low promotions in Q1, a peak in Q2 (Jan-Mar), minor activity in Q3, and another significant period in Q4 for back-to-school. She noted fiscal 2025 marked a return to this full promotional schedule.

Jim Salera requested the comparable sales components for Olive Garden, specifically breaking out mix and traffic, and details on any noticeable changes in Olive Garden's consumer demographics. He also asked about the outperformance of LongHorn Steakhouse versus fine dining, seeking insights into potential aspirational guests or lapping easier comparisons.

Answer

CFO Raj Vennam reported Olive Garden's same-restaurant sales at 4.7%, with traffic growth of 2.8% (including catering) and pricing of 2.6%, noting some negative mix offset by Uber Direct fees. CEO Rick Cardenas attributed LongHorn's success to its strategy, pricing, and food quality, suggesting it might be taking share from fine dining due to high grocery beef prices. He noted improving trends in fine dining, potentially clearing COVID impacts.

Jim Salera requested the comparable sales components for Olive Garden, specifically breaking out mix and traffic, and details on the consumer demographics (income, age, group sizes) accessing the brand through new avenues. He also asked about the read-through from LongHorn's continued outperformance and fine dining's improving trends, questioning if it's due to aspirational guests or easier comparisons.

Answer

CFO Raj Vennam provided Olive Garden's comparable sales breakdown: 4.7% sales, -1.7% traffic (2.8% with catering), and 2.6% pricing. CEO Rick Cardenas reiterated increased growth across income levels above $50K and in the 55+ age group, with a pullback in those earning less than $50K and younger. He attributed LongHorn's success to its strategy, pricing, food investment, and steak cooking, suggesting it might be benefiting from high beef prices driving consumers from home. Fine dining trends are improving, potentially clearing COVID impacts, with good value at Ruth's Chris and Capital Grille, and LongHorn might be taking some share from fine dining.

Jim Salera requested a breakdown of LongHorn Steakhouse's same restaurant sales between traffic and ticket, and asked about the expected trend of the pricing gap relative to inflation. He also inquired if the value-focused menu expansion, similar to Olive Garden's smaller portions, could be seen at LongHorn or other brands.

Answer

Raj Vennam, CFO, reported LongHorn's traffic was up 3.2% and check was up 2.3% (with 2.5% pricing and 20 basis points negative alcohol mix). He expects Darden's pricing to be approximately 100 basis points below total inflation in Q2, with the gap narrowing in Q3 and Q4. Rick Cardenas, President and CEO, stated that the smaller portion initiative is currently Olive Garden-focused, and other brands would consider it in the future based on learnings.

Jim Salera asked for a breakdown of LongHorn Steakhouse's comparable sales between traffic and ticket, and whether the pricing gap below inflation is expected to continue. He also inquired if value-focused menu expansions, similar to Olive Garden's lighter portions, might be introduced at LongHorn Steakhouse.

Answer

Raj Vennam, SVP & CFO, reported LongHorn's traffic was up 3.2% and check was up 2.3%, with pricing at 2.5% and a 20 basis point negative mix from alcohol. He expects Darden's Q2 pricing to be 100 basis points below inflation, narrowing later in the year. Rick Cardenas, President, CEO & Director, stated that the lighter portion initiative is currently Olive Garden-focused, with other brands potentially implementing similar strategies after evaluating its success.

Jim Salera of Stephens Inc. requested a traffic and ticket breakdown for Olive Garden's quarterly performance and asked about the customer impact of the 'Buy One, Take One' promotion. He also inquired about the planned promotional cadence for fiscal 2026.

Answer

CFO Raj Vennam detailed Olive Garden's comp, noting underlying traffic was over 2% (closer to 3% including catering), with pricing at 2.7% and positive mix. He stated 'Buy One, Take One' attracts both new and frequent guests without hurting margins. President & CEO Rick Cardenas added that while specific promotional plans are competitive, Olive Garden has a proven ability to react to the market environment and will continue to invest in marketing.

Representing Jim Salera, Tyler Klaus asked how Darden's marketing mix has evolved since pre-COVID times and inquired about the company's exposure to potential tariffs on kitchen equipment and building materials.

Answer

President and CEO Ricardo Cardenas explained that marketing is now a lower percentage of sales and more focused on brand-building with existing menu items. The media mix has shifted slightly more to digital, but TV remains crucial for Olive Garden. CFO Raj Vennam estimated that any tariff impact on building materials would be in the low-to-mid single-digit percentage range, and not a double-digit impact on kitchen equipment.

Jim Salera asked for details on Goldfish's performance, specifically whether it has lost households or seen a step back in consumption frequency among existing households, and what the focus of incremental marketing will be to reignite growth in the snack segment.

Answer

CEO Mick Beekhuizen confirmed that Goldfish is critical for snack segment growth. He noted that household penetration is relatively stable, but buy rate has felt more pressure. Marketing efforts will focus on clear brand messaging, innovation (e.g., Goldfish pretzel), strategic price-pack architecture to provide value (as seen with multi-pack growth during back-to-school), and strong omnichannel execution to drive buy rate.

Jim Salera asked about the portion of the portfolio considered 'splurge-worthy' and whether a portfolio pivot was needed for recovery. He also inquired if Rao's production could be shifted to the U.S. to mitigate tariff impacts.

Answer

President, CEO & Director Mick Beekhuizen characterized the company's strategy as 'surgical' innovation and brand support rather than a complete portfolio reset, noting many brands are already well-positioned. He stated that improved consumer confidence would lift the entire category. Executive VP & CFO Carrie Anderson addressed the production question by stating that the company is exploring all levers to mitigate tariffs, including strategic inventory management, supplier partnerships, and product cost optimization, without confirming a specific production shift for Rao's.

The analyst asked about the outlook for the foodservice business in fiscal 2026, considering consumer behavior and QSR trends, and also inquired about the company's exposure and strategy regarding rising soybean oil prices.

Answer

The company expects a modestly improving foodservice environment with traffic approaching flat, driven by value offerings and the chicken category. Regarding soybean oil, which is about 10% of COGS, they have been actively hedging and do not see it as a significant headwind for the upcoming year, as the price movements are within their expectations and managed through strategic positions.

Jim Salera of Stephens Inc. requested a debrief on why the Takis collaboration fell short after a strong start and asked for an update on the performance of the new Wednesday LTO compared to past collaborations.

Answer

Interim CEO & CFO Ken Cook explained that the Takis promotion saw a drop-off after week one due to lower-than-expected secondary trial. He identified this as a learning opportunity to conduct more robust testing on future collaborations to optimize elements like duration. He stated that the Wednesday collaboration, which just launched, is performing in line with expectations.

Jim Salera of Stephens Inc. asked if the expected 2025 traffic improvement would come from Wendy's-specific efforts or general industry recovery, and what the company assumes for industry messaging between value and experience.

Answer

CEO Kirk Tanner stated the improvement will be a combination of both, as they expect the industry to improve but their primary goal is to outperform the category. He noted that value remains critical for consumers, and Wendy's will leverage its Biggie Bag platform, which he described as a high-quality value proposition. The company plans to innovate on this platform to elevate the value experience for customers.

Jim Salera asked about the expected growth pacing for Alani Nu in the second half of the year against tougher comps and requested an update on its household penetration.

Answer

CFO Jarrod Langhans acknowledged that comps will be tougher for Alani but expects solid growth to continue, driven by the core portfolio and upcoming LTOs. CEO John Fieldly reiterated the household penetration figures, stating the combined portfolio is at 43%, with Alani at 22% and Celsius at 34%. He emphasized that both brands have a significant runway for growth and are attracting new consumers.

Jim Salera from Stephens Inc. asked about the drivers behind the strong growth in shelf-stable plant-based milk, which appears disconnected from syndicated data. He sought to understand if the growth stems from existing customers gaining share or from new brands entering the category and choosing SunOpta.

Answer

CEO Brian Kocher explained that tracked channel data is uncorrelated with their performance as it represents less than 20% of the total category, with foodservice and club channels being the primary growth drivers. He confirmed the growth is heavily weighted towards SunOpta's existing customers gaining significant market share, though new entrants also contribute. Kocher emphasized the strength of the entire diversified portfolio, including broth and fruit snacks.

Jim Salera asked about the drivers behind the strong growth in shelf-stable plant-based milk, which appears disconnected from syndicated data. He questioned whether the growth stems from existing customers gaining market share or from new brands entering the category and choosing SunOpta as a partner.

Answer

CEO Brian Kocher explained that tracked channel data is not representative, as it covers less than 20% of the category and misses significant growth in foodservice and club channels. He noted that one club customer's sales alone exceed the entire tracked channel volume. Kocher confirmed the growth is more heavily weighted towards SunOpta's existing customers gaining share, while also emphasizing the strong performance of the company's diversified portfolio, including fruit snacks and broths.

Jim Salera of Stephens Inc. asked about the drivers behind the strong growth in shelf-stable plant-based milk, which contrasts with syndicated data. He sought to understand if growth stems from existing customer share gains or the entry of new brands into the category.

Answer

CEO Brian Kocher explained that tracked channel data is not representative, as it comprises less than 20% of the category and misses the larger, high-growth foodservice and club channels. He confirmed growth is driven primarily by their existing customers gaining significant market share, but noted that SunOpta benefits regardless. Kocher also highlighted strong performance across the diversified portfolio, including broth and tea.

Jim Salera inquired about the potential for persistent challenges from durable trends like return-to-office mandates and high housing costs on dog ownership, and whether this might lead to a strategic pivot toward cat food.

Answer

CEO Billy Cyr acknowledged these trends as cyclical headwinds that currently suppress pet acquisition among younger generations. However, he stated the company's focus remains on controllable factors like advertising, innovation, and operational execution. While interested in the growing cat food market, he clarified that it requires a different strategy and product format, and is not a primary focus for the current year.

Jim Salera from Stephens Inc. asked about the potential long-term challenges from durable trends like return-to-office and high housing costs on dog ownership. He also inquired about the potential for more innovation in the cat food category.

Answer

CEO Billy Cyr acknowledged these trends as cyclical headwinds, particularly affecting pet adoption by younger generations, but stated the company's focus remains on controllable factors like advertising and innovation. Regarding cat food, he noted that while the market is attractive and growing, developing products for cats is complex and not a primary focus for this year, though they remain interested in the opportunity long-term.

Jim Salera from Stephens Inc. inquired about the growth drivers and runway for the Boulder Canyon brand in conventional channels. He also asked for details on the composition of new households contributing to the company's record household penetration.

Answer

CEO Howard Friedman stated that Boulder Canyon's growth is broad-based across geographies and channels, with significant runway remaining as its ACV is still only around 49%. He suggested it could become a multi-hundred-million-dollar brand. Regarding household penetration, he hypothesized that growth is driven by the company's 'Power Four' brands entering new geographies, supported by strong trial and repeat rates that validate the expansion strategy.

Jim Salera from Stephens Inc. inquired about TreeHouse's innovation strategy, asking whether private label primarily follows branded innovation and if increased branded innovation could detract from private label's focus. He also asked if TreeHouse's scale provides a structural advantage over peers in innovation.

Answer

CEO Steven Oakland described TreeHouse's innovation model as being a 'fast follower' of established branded trends, citing examples like seasoned pretzels and cold brew coffee. He affirmed that the company's balance sheet, size, and scale provide a significant competitive advantage, especially in a high-cost capital environment, allowing them to invest and acquire capabilities faster than smaller competitors.

Jim Salera of Stephens Inc. requested more detail on the record new unit openings, asking about the mix between established and expansion markets and whether the Smart Kitchen could enable higher restaurant density. He also asked for a preview of marketing plans for the upcoming football season, particularly with increased visibility on third-party delivery platforms.

Answer

President and CEO Michael Skipworth described the development as highly diversified, with Q2 openings across 46 states. He clarified that the Smart Kitchen strengthens existing strategies to capture more market share rather than directly enabling higher density. For the fall, Skipworth noted that Q4 will see the highest media investment of the year, with plans to continue leveraging successful partnerships like the NFL and NBA without a fundamental shift in strategy.

Asked about the impact of competitor value messaging on new customer acquisition, the 2025 marketing strategy, the company's average ticket size, and the expected contribution from pricing in the 2025 comp guidance.

Answer

Wingstop continues to see record new guest acquisition and high retention, indicating its value proposition of quality and value resonates despite competitor promotions. The average ticket is in the low-to-mid $20s. Pricing is expected to be at the low end of the typical 1-2% range for 2025.

Jim Salera asked for an update on the average number of Quest SKUs at retail and future targets, as well as whether a 36-37% gross margin range is a fair assumption for fiscal 2026 given commodity and tariff headwinds.

Answer

CEO Geoff Tanner stated there is no specific target SKU count for Quest, emphasizing a significant runway for distribution growth both in and out of its core aisle. CFO Chris Bealer declined to provide a specific FY26 gross margin range due to uncertainties like tariffs but noted H1 will be challenged. Tanner reiterated the company's long-term goal is a high-30s gross margin, which they aim to recover via productivity and pricing.

Inquired about the intra-quarter sales cadence for Q3, the components of the same-store sales decline (traffic, price, mix), and the long-term growth potential for asset-light models like franchising and licensing.

Answer

The executives confirmed a sales pattern of a weak July followed by a stronger August and a slightly weaker September. They broke down the comp for STK, noting a traffic decline and a negative mix shift that offset pricing. For the long term, they see significant growth potential in asset-light models, targeting over 100 managed/licensed STKs and 50-100+ franchised Benihana locations.

Jim Salera inquired about the avocado supply-demand dynamics for the fall, evidence of consumer demand shifts from inflation, the status of the new management team, and the volume contribution from the new Jalisco facility.

Answer

President and CEO Brian Kocher explained that supply and demand are rebalancing, making it difficult to gauge true consumer elasticity in a supply-constrained market, although some retailers did reduce promotions at peak prices. He confirmed the new leadership team is fully in place. Kocher also clarified that the Jalisco facility provides strategic sourcing optionality and cost arbitrage opportunities rather than having a specific volume target, which was about 10-12% of Mexican volume in August and could reach 25% in the near term.