Yasmine Deswandhy

Yasmine Deswandhy asked for clarification on the turkey business, specifically bridging the fiscal 2025 impact (headwind or tailwind) given previous years' headwinds, and inquired about raw material inflation in Q4 and the 2026 quarterly outlook.

Answer

President John Ghingo explained that despite increased costs in 2025, successful pricing on ground turkey and a strong second-half recovery, coupled with better-than-expected whole bird prices, resulted in a net benefit for turkey in 2025. Interim CFO Paul Kuehneman confirmed Q4 raw material inflation was 500 basis points but directed to Jeff for further internal discussions on the 2026 quarterly outlook.

Yasmine Deswandhy asked if the reduced net sales expectation for frozen handheld and spreads was solely due to a weaker Q2 or if spreads weakness would offset Uncrustables' acceleration. She also inquired if the SKU rationalization for sweet baked snacks extending into Q3 would impact top-line stabilization expectations for the second half.

Answer

Tucker Marshall, Chief Financial Officer, confirmed that the reduced outlook for frozen handheld and spreads (over $80 million full-year) is largely driven by the spreads portfolio, while Uncrustables continues to grow towards a billion-dollar brand. Mark Smucker, CEO and Chair of the Board, clarified that Uncrustables' Q2 performance was impacted by lapping strong merchandising from the prior year, expecting double-digit growth in the back half with new innovations. For sweet baked snacks, Tucker Marshall stated that Q3 would complete SKU rationalization, with expectations for flat to slightly down comparable sales in Q3, followed by low single-digit growth in Q4.

Yasmine Deswandhy asked if the reduced net sales expectation for frozen handheld and spreads was solely due to weaker Q2 results, or if spreads' challenges would offset Uncrustables' acceleration. She also questioned if sweet baked snacks' SKU rationalization extending into Q3 would impact top-line stabilization expectations for the second half.

Answer

Tucker Marshall, Chief Financial Officer, clarified that the business is being called down by over $80 million for the full year, with half in Q2 and the balance in the back half, largely driven by the spreads portfolio. He confirmed Uncrustables is still growing and on track to be a billion-dollar brand. Mark Smucker, Chief Executive Officer and Chair of the Board, attributed Uncrustables' Q2 performance to lapping strong merchandising last year and expects double-digit growth in the back half, supported by innovation. For sweet baked snacks, Tucker Marshall expects flat to slightly down comparable sales in Q3, followed by low single-digit growth in Q4.

Yasmine Deswandhy inquired about BellRing Brands' longer-term strategy regarding portfolio expansion into other convenient nutrition categories like bars or breakfast offerings, and any changes in capital allocation priorities, particularly concerning M&A, given a recent board appointment.

Answer

President and CEO Darcy Davenport affirmed confidence in RTD shakes and powders, citing significant growth opportunities and white space. She noted participation in other categories (e.g., pancakes, waffles, cereal) through licensing to maintain organizational focus. CFO Paul Rode confirmed unchanged capital allocation priorities: investing in the business, maintaining an asset-light model, aggressive share repurchases (near-term), and M&A as a mid-to-longer-term priority.

Yasmine Deswandhy asked about BellRing Brands' longer-term strategy regarding portfolio expansion (e.g., bars, breakfast offerings) given the expanding convenient nutrition category, and any changes in capital allocation priorities, particularly M&A, in light of a recent board appointment.

Answer

Darcy Davenport, President and CEO, BellRing Brands, reiterated focus on RTD shakes and powders, citing a demand landscape study confirming significant growth opportunity. She noted participation in other categories (pancakes, waffles, cereal) through licensing to keep the organization focused, and confirmed no plans to re-enter bars. Paul Rode, CFO, BellRing Brands, stated capital allocation priorities haven't shifted much: first, investing in the business; second, share repurchases as a near-term priority; and M&A as a mid-to-longer-term priority, with the new board member bringing M&A expertise.

Yasmine Deswandhy of Bank of America Merrill Lynch asked for a qualitative assessment of the company's confidence in achieving above-algorithm top-line growth in fiscal 2026.

Answer

CEO Darcy Horn Davenport expressed strong confidence, highlighting that fiscal 2025 was the first year where all demand drivers (full product line, promotions, marketing) were fully active after years of lapping capacity constraints. She reiterated the long-term commitment to 10-12% top-line growth and emphasized the advantages of being the market leader in a rapidly expanding category.

Yasmine Deswandhy asked for an updated view on cost inflation for fiscal '26 and requested further clarification on the products driving the shipment-consumption gap in the Grocery & Snacks segment.

Answer

CFO Dave Marberger declined to provide fiscal '26 inflation guidance, citing market volatility, but noted Q3 inflation was 4%. CEO Sean Connolly reiterated that the Grocery & Snacks gap was primarily shipment timing. Dave Marberger added that Swiss Miss was a key factor, as shipments occurred in Q2 while strong consumption, driven by weather, occurred in Q3.