Jeff Zadoks: To the first part of your question, there is some of what you described that’s driving the decline this year. We were able, in the fourth quarter of last year, to take advantage of AI impacting our competitors sooner than it impacted us. So we were able to pick up some volume that wouldn’t have been our normal volume. Also, as Matt said in his comments, there were some timing in this quarter, that will we expect will leak into the first quarter of ’24. But your comment about AI last year was certainly a variable. With regard to competition, there is always been competition in precooked, which is our margin driver as you know in eggs. We’re by far the leader in the category. We continue to be the leader in the category.
We’re not seeing really a huge amount of change at that end of the spectrum. I would say there’s probably more competition at the lower margin side of the equation to higher end. So I would say that it’s comparable to what it has been, we continue to have the majority of the share for large-scale customers, it’s difficult for them to get the volume from our competitors that they need. I don’t want to be too rosy about it, there is obviously competition. But thus far we’ve had a tremendous amount of success in maintaining our business and growing it not only recently, but over time.
Matthew Smith: Thanks for that, Jeff. I can leave it there and pass it on.
Operator: Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Your line is now open.
Michael Lavery: Thank you. Good morning.
Jeff Zadoks: Good morning.
Michael Lavery: I just wanted to touch on Refrigerated Retail margins. I know in some — kind of a supply-constrained environment you relied more heavily on external production. Where does that sit now? Those margins were a little softer than we’d expected this quarter. Can you maybe touch on, what some of the drivers are and how to think about that bouncing back or not? And am I right that at least in sort of ordinary times in the fourth quarter had a little bit of a seasonal lift. Can you just unpack some of the moving parts there?
Jeff Zadoks: Let me start with the second or the last part of that question first. Fourth calendar quarter, there is the seasonal lift for this segment not fourth fiscal quarter. So the Thanksgiving and Christmas holiday are the peak of the seasonality for the side dish business. And in fact fourth fiscal quarter tends to be one of the lower periods of time for that segment. But to your — to the first part of your question, the bigger drivers for the margin this quarter from where you might have thought they were going to land, it was less about the co-packing volume and more about the incremental investments that we made in the business. So between incentives and advertising that we incrementally put back into the business, gives about a $6 million to $8 million hit to the fourth quarter margin in that business. So, I think if you put that back in, it would be much closer to what you were anticipating.
Michael Lavery: Yeah, it helps.
Jeff Zadoks: And then, to just finish out the comment, you would expect to see a step-change because of seasonality in the first fiscal quarter from where we ended the fourth quarter in that segment.
Michael Lavery: Okay, great. That’s helpful. And just on Pet, can you confirm your guidance excludes the perfection Pet Foods deal and can you just touch on what — any update on timing and what contribution we should expect from that when it does close?
Jeff Zadoks: So, confirming our numbers do not include that. So we will likely with our first quarter earnings, we will update — we will update our guidance assuming the transaction closes. And in terms of timing, we expect it’s going to close in this fiscal quarter, so sometime between now and the end of the year, you can probably guess what’s the most likely date. But I don’t want us jump the gun there. And was there another part of the question?
Matt Mainer: I think just the $25 million a year is what we called out as the run rate of EBITDA and that’s unchanged.
Michael Lavery: Okay, great. Thanks so much.
Operator: Thank you. Our next question comes from the line of Jason English with Goldman Sachs. Your line is now open.
Jason English: Hey, good morning folks. Thanks for slotting me in.
Jeff Zadoks: Hey, Jason.
Jason English: And Rob, my thoughts are with you, best wishes for a speedy recovery. And — so the business, congrats to the Foodservice team and their execution as well as the integration to the [indiscernible] business, it’s great to see the success. Some of the soft spots, I’d rather focus there. I think you mentioned in prepared remarks, you expect all retail businesses to be growing next year by top and bottom line. We exited the year and have been a weak spot within Refrigerated Retail and it suggests there’s a price gap problem that you may have to invest in to close. So can you elaborate on what’s going on there and how you get to a top and bottom-line growth trajectory next year with — in light of those headwinds. And similarly on Weetabix, I think you mentioned some margin drag from trade-down, but the margin step-down this year has really been astounding, particularly in the fourth quarter.
Can you unpack more of the drivers there what’s caused the weakness? Thank you.
