Michael Lavery: Just was wondering how much more color you could give us on 2Q. I know you had 1Q guidance specifically and haven’t done that this quarter for the second quarter, but I guess maybe partly just trying to understand the margin acceleration that you need to hit your full year numbers, but the additional spending you’ve called out for the second quarter, how second half heavy should our expectations be? Can you just give us a little bit better feel for the trajectory of how you think the rest of the year plays out?
Wendy Davidson: Yeah, let me start and I’ll turn a little bit over to Lee so he can provide more color. We said all along that the back half of ’24 was where we were really going to see a lift. That’s when we would see our fuel programs start to really lean in, it’s where we would start to see some of the early investments in channel expansion and innovation start to play out. So the shape of the year does very much have a quarter three, quarter four lift compared to a quarter one, quarter two. While we don’t have the discrete impacts in North America, all three of them, we will still have formula impact in quarter two. So I would say you’ll see a modest improvement in quarter two, and then I think you’ll see a more material improvement quarter three, quarter four.
Lee Boyce : Yeah, I guess I would just build upon that. As we go through the balance of the year, as Wendy mentioned, if we start seeing distribution gains specifically in bagged tea, yogurt. The other thing is we’ve invested part of the Hain Reimagined in revenue growth management, so we get the initiatives in way there. The other piece of it really is around innovation. So we see our innovation stepping up promotional improvements in the second half. We’ve got a dedicated team driving improved merchandising execution, so with all of those pieces and kind of the focus on driving fuel as well. We said we’d have a flexible program here, but as we unlock and drive that fuel, you’ll see that take traction if we go through the balance half of the year.
Michael Lavery: Okay, that’s helpful. And can I just add a follow-up on Garden Veggie in club? Just maybe you understand a little better, is there still distribution gains to come? Like say for Costco, would you be in all of them already? Is that a permanent item? Obviously, we’ve seen with ParmCrisps or some other things, there’s at least some volatility you can have there. How should we be thinking about that club piece of unmeasured channels and how it looks over the next few quarters?
Wendy Davidson: Yeah, I would definitely say that, and I think in general, you should never look at anything in club as a permanent item. It’s not really the nature of how that channel works. We feel good about the distribution that we have across all of the club outlets. We are also leaning into incremental distribution to make sure the Garden Veggie is available in all the points of distribution where the customer want it to be and that’s where we are seeing much more of our TDP gain is driving channel expansion. And as we mentioned in our opening remarks, we have some very strong innovation coming in quarter three that’s actually had really great acceptance from our retail environment. So we feel really good that we’ll have new news for Garden Veggie to add to the core news as we drive really good shelf assortments in all the potential points of distributions.
Michael Lavery: Okay, thanks so much.
Wendy Davidson: You bet.
Operator: The next question we have is from Andrew Wolf of CL King. Please go ahead.
Andrew Wolf: Thank you. Good morning. Wendy, sort of following up on your commentary on some innovation coming in Veggie Straws, I think you also use the word something disruptive. Is that something different that you’re referring to? And is that, if I’m right, that it’s different. Is that something that also has been sort of disclosed to the trader? Is that still an internal program that you’re not taking to market yet?
Wendy Davidson: We are really excited. And as you know, Garden Veggie is a core franchise for us. We’re excited to take Garden Veggie into disruptive categories. And so that’s where you will see us, see the innovation. It has been released to the trade for normal customer conversations to drive acceptance for store recess. It’ll begin shipping in late December and you’ll see it on shelves starting in January. We have pushed marketing, a bit of our marketing spend that you would have seen come out of quarter one and we pushed to later period so that we can invest appropriately behind that launch and sustain launch after it’s placed in market. But we’ve had very strong retailer receptivity to it and the consumer research has been incredibly positive. So we’re excited about it as a new platform of innovation under the Garden Veggie franchise.
Andrew Wolf: Got it, thanks for the color. And then on the 535 basis points, gross margin expansion from price and productivity kind of lumped together. Is there any chance that can be a little bit unpacked and between the price and the productivity gains and just a sense of how that’s going to flow going forward? And lastly, just kind of how the conversations are going with the retailers on price, given what, maybe not so much for natural organic, but for most companies, ingredients costs starting to normalize?
Wendy Davidson: Yeah, let me start with your second question and have Lee provide a little color on margin expansion. We, as we said earlier this year, we felt really good about the revenue growth management initiatives that have been put in place and that most of the, I call it may be blunt force instrument around pricing, most of those large broad price actions had already been, had already taken place between International and North America. You’ll actually start to see more of that wraparound and price realization as we go forward. What we’ll — you’ll see more from us is a bit more surgical pricing, price-back architecture, trade optimization, work that we do around net price realization on shelf. And those initiatives are starting to play out as well, but our overall productivity program, we feel is the pipeline is sufficient to offset any inflation that we have coming.
So, all that we’ve sort of factored into the numbers without the need for us to take incremental price.
Lee Boyce : So yeah, so just building on that, I mean, as Wendy said, we’re very focused in on revenue growth management. We don’t have any broad pricing planned in the near term. So, but we continue to kind of evaluate the environment, manage pricing, we are looking at the margin profile. We do expect the pricing to largely cover the inflation. And we talked about an inflation range of 3% to 4%. And I would say we have an exact number, but the majority of our pricing benefits has been communicated with our customers right now. And then from a productivity standpoint, the way you kind of think about it is 3.5% to 4% of our cost of sales. We are obviously looking to drive the outline upside there, as we use that and invest the productivity also as fuel to drive our overall growth.
So those are the kind of the two ways that you can think about it. Again, the inflationary environment from when we set the original guidance hasn’t fundamentally changed. And we think the pricing we’ve got in place right now is appropriate. So those two pieces, again, factor into our overall margin expansion expectations.
