Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the lost distribution in your club channel and the impact on your financials? Also, how does this align with your expanded distribution to Walmart? A: The softness in the quarter was due to reduced store selling in club and some promotional timing variances. Despite this, velocity remains strong, especially in key channels like grocery. We are optimistic about sustainable club distribution for 2025. Meanwhile, we are rolling out to 4,300 Walmart stores, which will include a variety pack to drive trial across channels. The impact on top and bottom lines is mainly due to distribution changes and increased marketing investments to support the Walmart launch.
Q: Could you elaborate on your marketing spend as a percentage of sales and its impact on profitability? A: We are focused on building a sustainable, profitable business and aim for profitability by 2026. Our marketing investments are crucial for driving future sales growth. We are balancing cost savings with reinvestment in marketing to drive brand awareness and distribution gains, which will lead to higher profits. Our productivity initiative allows us to fund these marketing efforts effectively.
Q: The gross margins were stronger than expected. Were there any one-time factors, and how do you view the margin potential going forward? A: The improvement was largely due to better inventory management and reduced excess inventory. We've renegotiated core input costs and rationalized SKUs, setting a higher baseline for gross margins in the mid to upper 40s. While there will be some variability, we continue to focus on driving velocity and value.
Q: Can you discuss the promotional strategies you've been testing and their impact on trade spend? A: We've been testing new strategies around promotion frequency, depth, and breadth. We've seen a 15% increase in lift in grocery tests, which builds confidence in our promotional strategies. We expect to refine these strategies further with the Walmart launch and aim to settle on an effective approach by Q1 2025.
Q: How is the Salted Caramel limited-time offer (LTO) performing, and what insights do you have from digital ad spend? A: It's too early to specify if the excitement is from existing or new customers, but our influencer network has been effective in driving engagement. Our digital campaigns have shown a 5% increase in sales in targeted markets. The Salted Caramel campaign is an example of engaging our base and reaching new consumers, supported by our productivity initiative.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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