Financial Data and Key Metrics Changes - The company reported a 6% decline in net sales, leading to a significant margin drop of 390 basis points in the quarter, with a snack segment margin of only 7% [14][15][16] - The company anticipates a slight improvement in margins in Q3, but expects a more substantial recovery in Q4 due to stabilization in bakery performance and lower marketing expenses [15][39] Business Line Data and Key Metrics Changes - The snacks segment is focusing on three key areas: Goldfish, Fresh Bakery, and Salty snacks, with Goldfish showing momentum but facing challenges in Fresh Bakery execution [10][11] - The company expects snacks to decline about 4% in the second half of the fiscal year, with a slight improvement anticipated in Q4 [40][41] Market Data and Key Metrics Changes - The competitive landscape in the salty snacks category has intensified, prompting the company to adjust its pricing strategy and promotional activities [12][30] - The company is experiencing mixed results in distribution, with gains in Goldfish but neutral performance in chips due to competitive pressures [76][77] Company Strategy and Development Direction - The company is focusing on improving competitiveness through pricing adjustments, promotional activities, and innovation in its product portfolio [12][32] - There is a strong emphasis on capital allocation towards debt reduction and maintaining cash flow, with no plans for share buybacks in the near term [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the operating environment, particularly in the snacks segment, but remains optimistic about the potential for growth in key brands like Goldfish and Rao's [61][90] - The company is committed to stabilizing its top line and improving margins through operational efficiencies and cost reductions [88] Other Important Information - The company is investing in its Goldfish manufacturing capacity, but has faced challenges in volume growth, impacting margins [67] - The introduction of Campbell's Condensed Sauces is expected to complement existing products and cater to evolving consumer cooking behaviors [91] Q&A Session Summary Question: Insights on snacks performance and competitive strategies - Management highlighted the need for surgical promotional strategies in the salty snacks category to remain competitive against larger rivals [30][32] Question: Fresh bakery execution challenges - Management noted that manufacturing and distribution disruptions, exacerbated by winter storms, have impacted fresh bakery performance, but improvements are being seen [19][20] Question: Capital allocation priorities - The company is prioritizing debt reduction and cash flow preservation, with no immediate plans to increase dividends or engage in share buybacks [22][23] Question: Pricing strategies in meals and beverages - Management confirmed that there will still be positive net price realization in the second half, although it may not be as significant as in previous periods [95] Question: Future growth expectations in snacks - Management expressed confidence in the potential for growth in Goldfish and other key brands, despite current challenges in the snacks segment [61][64]

Financial Data and Key Metrics Changes - The company reported a net sales decline of 6% in the quarter, leading to a significant margin drop of 390 basis points, primarily due to lower sales and ongoing investments in marketing and SG&A [14][22][24] - The snack segment margin was reported at 7%, which was unexpected and attributed to the sales decline and fixed cost deleverage [14][22] Business Line Data and Key Metrics Changes - In the snacks category, Goldfish maintained momentum, while Fresh Bakery faced execution challenges, impacting overall performance [10][11] - The Salty snacks segment is experiencing heightened competitive intensity, necessitating a focus on pricing competitiveness and promotional activities [12][13] Market Data and Key Metrics Changes - The company is seeing mixed results in distribution, with some gains in Goldfish but neutral results in the chips category due to competitive pressures [73] - The overall snacks portfolio is expected to decline by about 4% in the second half of the fiscal year, with slight improvements anticipated in Q4 [39][62] Company Strategy and Development Direction - The company is focusing on stabilizing its bakery operations and improving competitiveness in the snacks segment through pricing and promotional strategies [12][14] - There is a commitment to capital allocation prioritizing debt reduction over share repurchases, with a focus on maintaining dividend levels and managing cash flow tightly [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential for growth in the Goldfish brand and the cookies segment, despite overall market challenges [60][62] - The company anticipates continued pressure on consumption growth in the meals and beverages segment, with expectations of flat to slightly negative growth in the second half of the fiscal year [94] Other Important Information - The company is investing in its business to ensure sustainable improvements in execution and service levels, particularly in the Fresh Bakery segment [20] - The introduction of Campbell's Condensed Sauces is expected to complement existing products and cater to evolving consumer cooking behaviors [88] Q&A Session Summary Question: Insights on the snacks segment and competitive dynamics - Management acknowledged the need for a surgical approach to pricing and promotional strategies in the snacks category, particularly in response to competitive pressures [30][32] Question: Fresh Bakery execution challenges - The company faced manufacturing and distribution disruptions exacerbated by winter storms, but improvements are being seen through cross-functional team efforts [19][20] Question: Capital allocation priorities - The focus will be on debt reduction, with no share buybacks planned and a commitment to maintaining dividends [22][24] Question: Pricing and consumption expectations in meals and beverages - Positive net price realization is expected in the second half, but overall consumption growth may be flat to slightly negative [92][94]

Earnings Presentation Q2 Fiscal 2026 1 Rebecca Gardy Chief Investor Relations Officer Welcome Today's Agenda Mick Beekhuizen Chief Executive Officer Business Update Todd Cunfer Chief Financial Officer Financial Results and Outlook 2 Safe Harbor Regarding Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations regarding our future results of operations, economic perf ...