Financial Data and Key Metrics Changes - The company's Q1 2026 net sales were $368 million, with an adjusted EBITDA of $20 million, consistent with expectations and similar to Q4 2025 [20][21] - Organic net sales declined by 6% year-over-year, showing a sequential improvement from an 11% decline in Q4 [20][21] - Adjusted gross margin decreased to 19.5%, down approximately 120 basis points year-over-year, primarily due to lower volume mix and cost inflation [20][21] - SG&A expenses decreased by 8% year-over-year to $66 million, representing 17.8% of net sales compared to 18.1% in the prior year [20][21] Business Line Data and Key Metrics Changes - In North America, organic net sales declined by 7%, driven by lower volume in snacks, but growth was seen in beverages, baby and kids, and meal prep [23] - International organic net sales declined by 4%, primarily due to lower sales in baby and kids, partially offset by growth in meal prep [24] - Snacks organic net sales were down 17% year-over-year, while baby and kids saw a decline of 10% [25][26] Market Data and Key Metrics Changes - In North America, tea and yogurt grew double digits at key online retailers, while the beverages category saw a 2% organic net sales growth driven by tea [17][26] - Internationally, Hartley's Jelly Pops and Sun Pops showed strong performance, particularly in September [17] Company Strategy and Development Direction - The company is focused on stabilizing sales, improving profitability, optimizing cash, and deleveraging the balance sheet [5][17] - A turnaround strategy is anchored in five key actions: streamlining the portfolio, accelerating brand renovation and innovation, implementing strategic revenue growth management and pricing, driving productivity and working capital efficiency, and strengthening digital capabilities [7][32] - The company plans to eliminate approximately 30% of its SKUs in North America by fiscal 2027 to improve supply chain efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior is shifting towards value-seeking due to tighter budgets, impacting shopping patterns [43] - The company expects to see improvements in organic sales in the second half of the fiscal year, particularly in snacks and baby and kids categories [37][39] - Management is optimistic about the innovation pipeline and marketing investments planned for the second half of the year [30][32] Other Important Information - The company has taken $14 million in charges associated with restructuring, with total charges to date amounting to $103 million [21] - Free cash flow for the quarter was an outflow of $14 million, an improvement from an outflow of $17 million in the prior year [27] - The company closed the quarter with cash on hand of $48 million and net debt of $668 million, an increase from $650 million at the beginning of the fiscal year [28] Q&A Session Summary Question: Expectations for organic sales in Q2 - Management anticipates some moderation in the year-over-year rate of decline in organic sales in Q2, with a focus on improvements in the second half [37] Question: Elasticity of pricing in North America - Early data indicates that pricing on tea is in line with expectations, while baby category pricing is slower to roll through but also appears to be in line [39] Question: Consumer behavior in the current environment - Management noted a shift towards value-seeking behavior among consumers, with a focus on delivering value through better-for-you products [43]

Financial Data and Key Metrics Changes - The company's Q1 2026 net sales were $368 million, with an adjusted EBITDA of $20 million, consistent with expectations and similar to Q4 2025 [20][21] - Organic net sales declined by 6% year-over-year, showing a sequential improvement from an 11% decline in Q4 2025 [20][21] - Adjusted gross margin decreased to 19.5%, down approximately 120 basis points year-over-year, primarily due to lower volume mix and cost inflation [20][21] Business Line Data and Key Metrics Changes - In North America, organic net sales declined by 7%, driven by lower snack sales, but growth was seen in beverages, baby and kids, and meal prep [23] - The snacks category experienced a 17% decline in organic net sales, while baby and kids saw a 10% decline, attributed to industry-wide softness [25][26] - Adjusted EBITDA in North America increased by 37% to $17 million, driven by productivity savings and reduced SG&A expenses [23] Market Data and Key Metrics Changes - International organic net sales declined by 4%, primarily due to lower sales in baby and kids, partially offset by growth in meal prep [24] - International adjusted gross margin was 15.7%, approximately 530 basis points below the prior year, with adjusted EBITDA decreasing by 38% [24] Company Strategy and Development Direction - The company is focused on stabilizing sales, improving profitability, optimizing cash, and deleveraging the balance sheet [5][17] - A turnaround strategy is being executed, emphasizing five key actions: streamlining the portfolio, accelerating brand renovation and innovation, implementing strategic revenue growth management, driving productivity, and strengthening digital capabilities [7][33] - The company plans to eliminate approximately 30% of its SKUs in North America by fiscal 2027 to improve supply chain efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, expecting stronger performance driven by marketing investments and pricing actions [29][30] - The company is addressing consumer behavior shifts towards value-seeking, ensuring that its products provide nutritional value and quality [43][44] - Management noted that while there are challenges, the focus remains on executing the turnaround strategy and improving financial flexibility [32][33] Other Important Information - The company has taken $14 million in charges related to restructuring, with total charges to date amounting to $103 million [21] - Free cash flow for the quarter was an outflow of $14 million, an improvement from an outflow of $17 million in the prior year [27] - The company closed the quarter with cash on hand of $48 million and net debt of $668 million, reflecting seasonal funding needs [28] Q&A Session Summary Question: Expectations for organic sales in Q2 - Management anticipates moderation in the year-over-year rate of decline in organic sales for Q2, with a focus on improvement in the second half [36] Question: Pricing elasticity in North America - Early data indicates that pricing on tea aligns with expectations, while baby category pricing is slower to roll out but also appears in line with expectations [38][39] Question: Consumer behavior in the current environment - Management noted a shift towards value-seeking behavior among consumers, with a focus on delivering value through better-for-you products [43][44]

Financial Data and Key Metrics Changes - The first quarter net sales were $368 million, with an adjusted EBITDA of $20 million, consistent with expectations [20][21] - Organic net sales declined by 6% year-over-year, showing sequential improvement from an 11% decline in Q4 [22] - Adjusted gross margin was 19.5%, a decrease of approximately 120 basis points year-over-year, driven by lower volume mix and cost inflation [22] - SG&A expenses decreased by 8% year-over-year to $66 million, representing 17.8% of net sales [22][23] - Adjusted net loss was $7 million, or $0.08 per diluted share, compared to an adjusted net loss of $4 million or $0.04 per diluted share in the prior year [24] Business Line Data and Key Metrics Changes - In North America, organic net sales declined by 7%, primarily due to lower volume in snacks, but growth was seen in beverages, baby and kids, and meal prep [25] - Adjusted EBITDA in North America increased by 37% to $17 million, with an adjusted EBITDA margin of 8.3% [25] - International organic net sales declined by 4%, driven by lower sales in baby and kids, partially offset by growth in meal prep [26] - International adjusted gross margin was 15.7%, approximately 530 basis points below the prior year, with adjusted EBITDA of $13 million [26] Market Data and Key Metrics Changes - Organic net sales growth in snacks was down 17% year-over-year, while baby and kids saw a decline of 10% [27] - Beverages category experienced a 2% growth year-over-year, driven by tea in North America [28] - Meal preparation organic net sales growth was flat year-over-year, with strength in yogurt offset by softness in meat-free products [28] Company Strategy and Development Direction - The company is focused on stabilizing sales, improving profitability, optimizing cash, and deleveraging the balance sheet [5][19] - A turnaround strategy is anchored in five key actions: streamlining the portfolio, accelerating brand renovation and innovation, implementing strategic revenue growth management and pricing, driving productivity and working capital efficiency, and strengthening digital capabilities [8][34] - The company plans to eliminate approximately 30% of its SKUs in North America by fiscal 2027 to improve supply chain efficiency [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, expecting stronger top and bottom-line performance compared to the first half [31] - The company is stepping up marketing investments and anticipates benefits from SG&A work and pricing actions to build throughout the year [32] - Management acknowledged challenges in the consumer environment but emphasized the value proposition of their health and wellness products [41][42] Other Important Information - Free cash flow for the quarter was an outflow of $14 million, an improvement from an outflow of $17 million in the prior year [29] - The company closed the quarter with cash on hand of $48 million and net debt of $668 million, an increase driven by seasonal funding of working capital [30] Q&A Session Summary Question: Anticipation of organic sales in Q2 - Management expects some moderation in the year-over-year rate of decline in organic sales in Q2, with a focus on improvement in the second half [37] Question: Elasticity of pricing actions in North America - Early data indicates that pricing on tea is in line with expectations, while baby category pricing has been slower to roll out [39] Question: Consumer behavior in the current environment - Management noted a shift towards value-seeking behavior among consumers, with a focus on delivering value through better-for-you products [41][42]