Advantage Solutions Inc. (NASDAQ:ADV) Q2 2023 Earnings Call Transcript

Jason English: Okay. And yes that makes sense in terms of the cut-ins and the merchandise interest with all the CPG companies the same in innovation. The other side of the sales equation you do have a commission-based business. And as we look across the branded landscape volumes have been exceptionally soft, and we’ll quickly be at a point where price is de minimis if not negative for some categories. What is the — that seems to have — those seem to have a negative expectation for the commission side of your business. What is your outlook there? And if you can remind us how big that is in context of your overall sales segment?

Dave Peacock: Yeah. Commission side to be as much as about 25%. So we’ve got other contracts in place that are not commission-based. And look you obviously have to negotiate those commission rates, as well in light of the activities we’re performing in the market and the same inflationary pressures that we’re facing. So we still have some opportunities there. And from an aggregate as you zoom out what we do and the services we provide from a total of someone’s cost of goods sold can be pretty small. And so when you look at their margins for instance some of the pricing actions probably have pretty minimal impact. But yes, we are seeing volumes the same thing you’re seeing Jason in the market slip for a lot of the manufacturers and the desire to get increased traffic and increased volume.

And I think that increased volume leads to a lot more out-of-aisle merchandising opportunities, which plays into one of our strengths as well as what we do both for CPGs and for retailers. So it does create more demand for what we’re doing and an opportunity to continue to grow our business.

Jason English: Understood. Thanks, guys. Thank you for your time. I’ll pass it on.

Dave Peacock: Thanks, Jason.

Operator: Thank you. As there are no further questions, I would now hand the conference over to Dave Peacock Chief Executive Officer for closing comments.

Dave Peacock: Thanks a lot guys. Look, it was a quarter that we’re pleased with. At the same time, we’re never satisfied with our results. So we remain committed to focusing on those things that can get us to getting a balance sheet where we’re much more in a stronger position relative to our debt. And look the future for our business is bright. We’ve talked about some of the things through the Q&A that we feel are helping drive demand and create some tailwinds. So we remain optimistic and again really appreciative of the great work our team did in the last three months.

Operator: Thank you. The conference of Advantage Solutions has now concluded. Thank you for your participation. You may now disconnect your lines.