The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Ryan Meyers - Lake Street Capital Markets - Analyst
: Hey, guys. Thanks for taking my questions. As we think about the revenue for the fourth quarter, obviously, traditionally, we'll see a step down
from the third quarter. Do you expect that trend will continue here in Q4? Or are some of the recent customer wins with Walmart and even Costco
enough to offset what we traditionally see here sequentially? Really, any commentary on Q4 would be helpful.
Question: Ryan Meyers - Lake Street Capital Markets - Analyst
: Okay. Got it. And then thinking about the gross margins, you called out the 400 basis point impact from the construction related costs and the
remainder was commodity. Have you guys seen any improvements in the commodity pricing yet? And then as a follow-up to that, when do you
think you'll see the full impact to the margin improvement from the recent CapEx project?
Question: Ryan Meyers - Lake Street Capital Markets - Analyst
: Got it. That sounds good. Thanks for taking my questions.
Question: Eric Des Lauriers - Craig-Hallum Capital Group LLC - Analyst
: Great. Thank you for taking my questions. First one for me, just a bit of a follow-up on gross margins here. So obviously, chicken prices, commodity
prices, overall headwind in the quarter. Backing out, the construction headwinds, about mid-20%s gross margins.
Do you need commodity prices to improve to get you back to your high 20%s gross margin target or some of these things that you just mentioned,
contracts and other areas of efficiency, can those in and of themselves get you back to that high 20%s target? And then just on the new longer-term
target of the low 30%s. Just wondering what might need to happen to get you into that range? Thanks.
Question: Eric Des Lauriers - Craig-Hallum Capital Group LLC - Analyst
: Thank you. That's very helpful. And then just in terms of the new longer-term targets of the low 30%s, I guess this parlays into the next question I
have. Just wondering if you have any other CapEx projects earmarked for the quarters ahead? And if so, could you just talk about how we should
be thinking about those? Are these as intensive of an installation process as we saw this year?
So I guess just a comment overall on any new CapEx projects over the next couple of quarters and then the ability to what you need to do to get
to the low 30%s longer-term target. Thanks.
Question: Eric Des Lauriers - Craig-Hallum Capital Group LLC - Analyst
: Great. Thank you for taking my questions. Yeah, it's very helpful. Thank you.
Question: Anthony Vendetti - Maxim Group - Analyst
: Thank you. Yeah, Just a couple of questions on the revenues and then the Northeast region. So if you could talk about what specifically -- was it a
particular customer like Walmart, a Costco that drove the outperformance in revenues this quarter? And then -- or was it a region? You mentioned
west of Mississippi, I think it's 47% of revenues.
And then also on the regions, I think the Northeast was down 12.6%. Any specific reason there, what's going on in the Northeast region? Obviously,
we made up for that in other regions. So maybe if you can tie all that together? Those are my questions. Thanks.
Question: Anthony Vendetti - Maxim Group - Analyst
: Okay. So just the last follow-up on that is the Northeast region, what do you think accounted for the decline there?
Question: Anthony Vendetti - Maxim Group - Analyst
: Okay. Great. I appreciate the call. (multiple speakers)
I'll hop back in the queue. Yes. No problem. Thanks.
Question: George Kelly - ROTH Capital Partners - Analyst
: Hey, everybody. Thanks for taking my questions. First one is just on the quarterly impact from pricing. Curious how much of that 10% growth was
driven from pricing? And then you talked in your prepared remarks about planning to take additional pricing. I was just curious how much you
plan on taking and when?
Question: George Kelly - ROTH Capital Partners - Analyst
: Okay. That's helpful. Thank you. And then two additional quick unrelated follow-up questions. First, can you just comment on what you're seeing
with respect to M&A, multiples? Are there things you're being shown, et cetera?
Just a quick update there? And then second question. You laid out the construction and commodity improvement and some internal measures to
improve your gross margin. I know that's really put a damper on the gross margin this year, some of these unexpected things have really limited
your ability to accelerate trade spend.
And I'm curious with what you see now, do you think next year in fiscal year '26, you'll have an ability to really accelerate trade spend? And that's
all I had. Thank you.
Question: George Kelly - ROTH Capital Partners - Analyst
: Understood. Thank you.
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