Financial Data and Key Metrics Changes - The company reported a 5% decline in organic net sales and adjusted EBITDA of $34 million, which is over 20% below last year's performance [14][22] - Adjusted gross margin fell 50 basis points to 21.8% in the third quarter, and adjusted EBITDA margin decreased by 140 basis points to 8.6% of net sales [22][24] - Free cash flow in the third quarter was an outflow of $2 million compared to an inflow of $30 million in the prior year [31] Business Line Data and Key Metrics Changes - In North America, organic net sales declined 10% year over year, primarily driven by lower sales in Snacks and Baby and Kids [25] - International organic net sales grew 0.5% in the quarter, led by growth in Meal Prep and Baby and Kids [26] - Snacks category saw a 13% decline in organic net sales year over year, while Baby and Kids experienced a 6% decline [28] Market Data and Key Metrics Changes - The North American segment accounted for 80% of the top line shortfall, with two-thirds attributed to Snacks [42] - The international segment is expected to improve sequentially in the fourth quarter due to pricing actions and new innovations [26] Company Strategy and Development Direction - The company has initiated a strategic review of its portfolio to maximize shareholder value, retaining Goldman Sachs as a financial advisor [10][62] - The focus is on simplifying operations, enhancing brand innovation, and improving revenue growth management [19][37] - The company aims to reduce overhead spending and strengthen digital capabilities to drive operational productivity [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged disappointing third-quarter results and emphasized the need for clarity, focus, and action moving forward [12][36] - The company expects organic net sales growth for the full year to decline approximately 5% to 6% and adjusted EBITDA to be around $125 million [35] - Management remains optimistic about the future, citing strong brand potential and a growing market for better-for-you products [36][84] Other Important Information - The company has taken $83 million in charges associated with its transformation program, with total charges expected to be between $115 million and $125 million by fiscal 2027 [23] - Interest costs fell 16% year over year to $12 million, driven by lower outstanding borrowings and reduced interest rates [24] Q&A Session Summary Question: Insights on Snacks and Infant Nutrition Categories - Management noted that 80% of the top line shortfall came from North America, with two-thirds from Snacks, and emphasized the need for improved execution and marketing [42][44] Question: Visibility and Forecasting Improvements - Management acknowledged the need for better forecasting and visibility, highlighting investments in the commercial team and digital capabilities [52][53] Question: Strategic Review Details - The strategic review will evaluate a broad range of options to enhance shareholder value, but specifics are not yet available as the process is still early [62] Question: Pricing Strategy in Current Environment - Management confirmed that pricing is under review and emphasized the importance of revenue growth management to address pricing execution issues [93][94] Question: Brand Positioning and Value Creation - Management stated that the focus will be on creating value through innovation and marketing, aiming to charge appropriate prices for their brands [78][79]

Financial Data and Key Metrics Changes - The company reported a 5% decline in organic net sales and adjusted EBITDA of $34 million, which is over 20% below last year's performance [13][20] - Adjusted gross margin fell 50 basis points to 21.8% in the third quarter, and adjusted EBITDA margin decreased by 140 basis points to 8.6% of net sales [20] - Interest costs decreased by 16% year over year to $12 million, driven by lower outstanding borrowings and a reduction in interest rates [22] Business Line Data and Key Metrics Changes - In North America, organic net sales declined 10% year over year, primarily driven by lower sales in Snacks and Baby and Kids [24] - International organic net sales grew by 0.5%, led by growth in Meal Prep and Baby and Kids, despite declines in beverages and snacks [25] - Snacks category saw a 13% year-over-year decline in organic net sales, while Baby and Kids experienced a 6% decline [27] Market Data and Key Metrics Changes - The North American segment accounted for 80% of the top line shortfall, with two-thirds attributed to Snacks [40] - The international segment is expected to improve sequentially in the fourth quarter due to pricing actions and new innovations [25] - The overall snacks category has softened, with only a few brands driving growth during the quarter [40] Company Strategy and Development Direction - The company launched a new strategy called "Hain Reimagined," aimed at streamlining operations and simplifying the product portfolio [6][9] - A formal process to review the company's portfolio has been initiated to maximize shareholder value, with Goldman Sachs retained as a financial advisor [9] - The focus is on five key drivers: simplifying the business, accelerating innovation, implementing strategic revenue growth management, driving operational productivity, and enhancing digital capabilities [16][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the third quarter results were disappointing and emphasized the need for clarity, focus, and action moving forward [11][12] - The company expects organic net sales growth for the full year to decline approximately 5% to 6%, with adjusted EBITDA around $125 million [33] - Management remains optimistic about the future, citing strong brands in attractive categories and a commitment to continuous improvement [34][35] Other Important Information - The company took charges totaling $8 million associated with restructuring, with total transformation program charges expected to be between $115 million and $125 million by fiscal 2027 [21] - Free cash flow in the third quarter was an outflow of $2 million, compared to an inflow of $30 million in the prior year [29] - The company closed the quarter with cash on hand of $44 million and net debt of $665 million, with a net leverage ratio of 4.2 times [30][31] Q&A Session Summary Question: Insights on Snacks and Infant Nutrition Categories - Management acknowledged underperformance in Snacks, attributing 80% of the top line shortfall to North America, with two-thirds from Snacks [40][41] - They noted execution challenges and category softness, but expressed confidence in brand health and upcoming marketing efforts [41][42] Question: Visibility and Forecasting Improvements - Management indicated that investments in the commercial team and digital capabilities would enhance forecasting and visibility [50][51] Question: Strategic Review Details - The strategic review aims to evaluate the strategy and portfolio to maximize shareholder value, with no specifics available yet as the process is early [58][59] Question: Pricing Strategy and Market Environment - Management confirmed that pricing is under review and emphasized the need for improved execution in revenue growth management [90][91] Question: Brand Positioning and Value Creation - Management stated the importance of creating value in brands through innovation and marketing, aiming to charge appropriate prices based on brand value [76][77] Question: Right to Win and Competitive Environment - Management expressed confidence in the company's right to win, emphasizing the need for brand renovation and innovation to support growth [78][80]