The Hershey Company Price & Performance (HSY)

A detailed listing of such risks, and uncertainties can be found in today's press release and the company's SEC filings. Finally, please note that we may refer to certain non GAAP financial measures that we believe provide useful information for investors. The presentation of this information is not intended to be or as a substitute for the financial information presented in accordance with GAAP. Reconciliations for the GAAP results are included in this morning. Press release. Joining me today are Hershey's Chairman and CEO, Michelle Buck and Hershey's Senior Vice President and CFO, Thank you. Our first question is from Andrew Lazar with Barclays.

Great. Thanks so much. Good morning, everybody. Michelle, I know it's it's clearly way too early to get overly prescriptive at this stage on '26, but In the prepared remarks, you do mention positioning the company for balanced top and bottom line growth in 2026 I was really hoping you could just provide maybe just some context around this such as as is growth doable in 2026, if cocoa remains at currently elevated levels? And if so, how do you feel about the ability to take more pricing in 2026 to get there even though we don't yet have a good sense for how the incremental pricing will be received by consumers for this year? I'm really just trying to put some broader parameters around this and sort of what's embedded in your comment about the potential for balanced growth in 2026? Yes, got it. Hey Steve, do you want to just take a crack at that one? Yes, I'd be happy [indiscernible] as implied, when we say balanced growth, we want to eventually get EPS back on algorithm. And so as we look to '26 I mean one of the [indiscernible] relative to commodity. But that said, just like for 2025, when we look at 2026, we expect to use the full suite of levers we have to manage Cocoa price and that includes looking at pricing, that additional productivity and CI savings The includes continuing to drive efficiency in SG and A, and even driving more return for the same dollars The some case on marketing spend.

So all of those things will be in the consideration set as we take a look at what we can do in 2026. We don't wouldn't expect pricing to be easy. That probably would conversation we'd have to have and think about internally the impact but still 80% of our portfolio is less than $4 on the confection side. And so so The would have to be one of the things we take a look at.

Thanks for that. And then maybe talk about what sort of elasticity you're seeing currently as some price has already sort of made its way into the market in 4Q. I asked just because our understanding is that Hershey's taken a sort of a different approach to pricing this year where the company is maybe not fully line pricing across the portfolio, And I wonder if part of not taking prices up in instant consumables is sort of a reflection of elasticity concerns or there's some other sort of strategic intent there?

Sure. So it's a little bit early for to have the full visibility to those results. What I'd say is what we're seeing is elasticity is coming in either on par with our expectations and in some cases [indiscernible] So we are carefully watching that obviously. We have a lot of confidence in our ability to price and we strategically selected where we thought it was best to do that And we certainly always take into account an expectation of where we think Coco will be and as we going to normalize how we factor that into the pricing decisions so that we are really balancing how aggressive we go So we will continue to monitor The, but feel good about what we're seeing to date.

Thanks so much. Thank you. Our next question is from Ken Goldman with JPMorgan. Hi, thank you. In your prepared remarks, you said you're prepared to adjust pricing, price pack architecture, etcetera. If your view on commodity markets evolves. I just wanted to get a little bit more color on what that necessarily means. Is that dependent on how you view underlying supply and demand? Or is it really more dependent on just looking at the futures market and saying, okay, the prices are what they are, right or wrong? Just trying to get a sense of your timeline and how you think about when you might want to make that decision to adjust pricing or make other decisions around formulations and so forth?

But can we take both of those things into account Let me start by talking a little bit about our view on the market and then I'm going to turn it over to Steve to talk a little bit about how we balance those factors. We continue to feel good about what we're seeing in the market fundamentals. We're continuing to see production increase with nearly half of the production today coming from areas outside of Ivory Coast Ghana, We think that's really healthy for the global cocoa supply over time. It's going to be much more diversified. And that diversification is going to provide an inherent resilience just balancing weather factors and geopolitical factors, etcetera. We're continuing to take action to West Africa to continue to help drive resiliency as we diversify our impact it's going to look it's looking different by market. We've made investments in West Africa. We will continue to do that. We've also diversified our supply sources. So we're watching those fundamentals and certainly that is one factor for us. At the same time, we know fundamentals and market price aren't exactly aligned and we certainly take that into account as well. Steve, do you want to talk a little bit more about that?

Yes.

I would just say at the same time that we're still see pricing in Coco as transient right now. We're dealing with the reality on the ground, which to say we're building plans for 2026. We'll be watching the cocoa market in what's happening in reality a lot through the first half of the year. But not waiting even for that before setting plans and again kind of touching all parts of the P and L. In the event we don't see that retrenchment so that we're ready to go for 2026. And as I said earlier, get back to an on algorithm opportunity on EPS.

The other thing we do watch is not only what's the price on the exchange, but what's actually happening to those prices in Origin. And there is some differential The. And so we take that into account as well.

Understood. No, that's helpful. Thank you. And then just a quick follow-up I think you had answered Andrew's question about what you're seeing for elasticities today. It's great to hear that they're on par or maybe in some cases slightly better. What is baked into your guidance? And if you said this, I missed it, but how are you thinking about elasticity as more pricing unfolds throughout this year? So we've baked into our guidance historic last at that minus one level. We'll watch those because we do think that depending on factors, there could be upside, but we think that is the prudent approach for us right now.

Thank you. Thank you. Our next question is from Max Gunport with BNP.

Thank you very much.

I have a follow-up question on the elasticities and the minus one assumptions. I mean, to me, it feels like this is the key unknown for 2025, right? You've got cocoa costs largely locked in, pricing implemented, visibility to cost savings pretty clear. And so could you just give a bit more color on what's informing the minus one and if that applies to your smaller international segment too. Particularly in context of competitor talking about an elasticity level in '25 The would be much more favorable.

So we do see upside if The come in better We again think that it is a prudent stance to take as we work through the volatile consumer marketplace and some of the pressures that we know exist for consumers. And we have also considered greater elasticities in international in the outlook We are not the market leader in many of those markets so not always leading those price increases. So we take a different stance relative to our approach there. I mean, it's a smaller piece of our business, obviously, so it doesn't have nearly as big of an impact, but we do look at it differently.

Great. Thanks very much. And then staying on international, I realize it is a smaller segment, but you had a very strong 4Q. Broad based strength across your markets. The the commentary of low single digit growth heightened competitive activity and 25 stood out. Can you talk a bit more about what the competitive activity is you're seeing in those markets where it's more pronounced and and how you expect to manage through it?

Very much.

Sure. Yes, fourth quarter was strong. They were helped a little bit by a favorable [indiscernible] in a couple of markets where that's was a big holiday. So strong performance there. When you look at the totality of last year, the business was up about The point So I'm more on balance. The 25% outlook doesn't look as as different. We saw, I would say, the highest competitive activity in Brazil and Mexico Brazil in particular was [indiscernible] very intense, a lot of promotion. We had a lot of innovation in market in those markets and that helped. Certainly in the fourth quarter. But again, as we look kind of at the totality of 2025, we expect to see that competition increase and that's really what's informing the growth there.

Thanks very much. Pass it on.

Thank you. Our next question is from Robert Moskow with TD Cowen. Please proceed with your question.

Hi, thanks for the question.

Steve, I think I'll just ask about phasing.

Do you expect your gross margin pressure to be pretty even throughout the quarters or in fourth quarter, are you fully covered for fourth quarter or will they be like another hit in fourth quarter when hedges roll over.

Sure. So for the full year, we're nearly completely covered on Coco. And so we don't expect The be hit It's a kind of new hit from the outlook in the fourth quarter. As you look at the split of gross margin, we're going to have less gross margin pressure in the first half The will be based on our hedging less probably in the neighborhood of under 500 basis points And as we get to the back half, we'll see more impact of those hedge positions are going to be higher priced based on the flow of cocoa. So definitely more in the back half than the first half.

Okay. And just quick follow-up for Michelle. Michelle, are you seeing your competitors take similar actions on pricing you've been very strategic about where you're going to take it. It doesn't sound like you're taking it in its consumables yet. Have you seen similar actions or are there some discrepancies out there?

I guess I'd say overall, I think the category is [indiscernible] Very rational. And we have seen most major players taking pricing, including private label which has also taken pretty aggressive pricing as well. I'd say that pricing has probably been a bit more broad based, though people tend to cycle through parts of their portfolio as they see appropriate. And price 60% at one time and then go to the next piece. We know that we've tried to be just considerate of pressure in certain channels but nothing is off the table for us We are continuously evaluating the entire portfolio.

Okay, got it. Thank you. Thank you. Our next question is from Alexia Howard with Bernstein. Please proceed with your question.

Good morning, everyone.

Good morning.

Okay. So first of all, can I just ask on the sales outlook for 2025, it's obviously fairly muted compared the strong performance this time around? Is that mainly due to the conservative price elasticity assumption or are there other puts and takes in there? So I'd say a couple of things. International was a bit more pressured. So The we would normally see in in our growth algorithm. So that certainly played a role. We're certainly taking into account The volatility in the marketplace, We do anticipate that our consumption will be a bit stronger than shipment. Due to primarily to retailer inventory, North America Confection. And so that's playing a a role as well in addition one fewer shipping day. And we do have some commercial activations that are really coming into play closer to the back half of the year, but those are the key components. Can I come back to the topic or not on this call, to the topic of GLP-one, which has come up in the past, are you seeing any material impact at the moment How are you measuring it? And what's the strategy here as that plays out [indiscernible] Yes. So we are seeing no material impact We are continuously looking externally to get and evaluate data.

We have triangulated both external and internal evidence, including some of the most recent studies like the recent Cornell enumerator studies, and they tend to validate our internal views. We have multiple data sources that also support our view that users of the drugs do not eat disproportionately less of our categories. We do know that there's a broader shift in consumer preference for healthier items that has been underway for some time items that have nutritional claims around low sugar and other things.

And we will continue to evolve our portfolio as we continue to track what's important to consumers.

Next question. Hello? Operator? Thank you. Our next question is from Peter Galba with Bank of America. Please proceed with your question.

Hey, good morning, Michelle and Steve. Thanks for the questions.

Steve, maybe just a follow-up on phasing. On top line. I know you gave color on 1Q and 2Q. In the prepared remarks. But I think there was a comment you just actually just made to Alexi's question around the back half of the year, 4Q maybe has has one less day. Just want to make sure we have all the moving parts on top line as we think about bridging to the 2% The there's some wonkiness in the comps.

Sure. Yes. One quarter, the first quarter has two fewer shipping days, fourth quarter has [indiscernible] And so, they have one extra. So net net, your one day short for the full year. Again, pretty minor between those two, between first half and second half. But overall in the second half, we'd expect low single digit growth. Got it. Helpful. And then, Michelle, maybe if I could switch gears there's commentary about being able to participate in the downside of cocoa markets do fall given your risk caps. You spoke a little bit about I believe, off exchange mechanisms you're seeing some of the competitors are doing. [indiscernible] been some reporting about maybe your own activities that have been outside of the norm. So just wanted to get a deeper understanding of of kind of what you're seeing from that perspective, what instruments you're seeing, you're activity that's maybe been outside the norm? Thanks very much. [indiscernible] So right now, we are seeing very low commercial participation participation on the exchange. [indiscernible] yes, we have been looking at alternatives and options of how we approach our cocoa supply chain. Our focus is really there has been an opportunity to get lower prices in origin versus on the exchange and we're trying to be very opportunistic about how we approach this whole area and take advantage of the market dislocations in a place that we see that we can come in a bit differently.

Steve, anything you would add to that?

No, I think we won't give more specific on the types of instruments, but market dislocation sometimes present opportunities. And so we want to make sure we're Looking everywhere we can for opportunities.

Thank you.

Thank you. Our next question is from Todd Palmer with Citi. Please proceed with your question.

Good morning and thanks for the question. Maybe just starting out, we could circle back to the elastisvia assumption. I just want to make sure I have kind of the starting point, right, when you talk about minus -one, it would be without pricing I guess, what level of growth roughly do you assume as a starting point and then the elasticity starts to trigger And I guess when we think about this coming year, is it different as a starting point than maybe you would have in your term algorithm or relatively normal?

So I would say it is it's largely similar to how we approach it. I mean, we always say we look the impact of pricing and there is a volume conversion curve that you go on once you price and then we build back up from there relative to the programming, that we have to unlock unlock growth and consumption on the brand. And we do that on a pack by pack and our retailer by retailer brand by brand. And that's really what helps to get us to to what that number looks like. So that's how we derive it. The Long Easter helps us this year at somewhat of a starting point. But those programs that we add on top allow us to get better than that minus one.

Understood. Thanks for that. And then just in the prepared remarks, there was reference to a timing benefit in the fourth quarter. Related to inventory valuation. Just any help quantifying this? And then what drove this and whether this has any impact on 2025 at all?

Yes. The impact was about $40,000,000 and it's really related to our new ERP system, which has much finer allocation of cost between inventory and P and L based on what we sell. And so it's sort of a better [indiscernible] With that system and that precision comes a little bit more variability. So as we go through the quarters, we may see a little bit more of that movement than we had in the past. But it's not going to be material and I wouldn't we're not setting our models differently based on that.

Okay. Thank you.

Sure. Thank you. Our next question is from Jim Salera Please proceed with your question. Yes.

Thanks for taking our question.

Michelle, in the prepared remarks, you called out acceleration on the suites portfolio and some successes with the Shack Locusts, Gummies and Valley Rancher. Just in thinking about The drivers of potential upside on the portfolio, if you maybe talk about innovation on the non chocolate portion of the portfolio and how that will play into some of The advertising efforts you have rolling out this year?

Yes, absolutely. So as you know in Q3, we launched in the marketplace a lot of new innovation including Jolly Rancher innovation, Heightened Support, Shackalicious Gummies. And then in Q4, we actually sour strips. So all of those things on sweets were new as of kind of mid to late Q3 into the balance of the year. So as you look at the year of 2025, we're going to get a carryover benefit a pretty strong carryover benefit from those items. In addition to that, we have also recently launched [indiscernible] that's hit the marketplace. So that is new news on innovation in suites for this year. We have new news coming later this year that we haven't yet announced And then we obviously have distribution and velocity opportunities on sour as well. So we have a continued nice lineup of continued news and opportunity on suites as we enter the year and go through the year.

Great.

And then when you have your conversations with retail partners on expanding the suite selection, Is that often incremental space that you didn't add before or is it kind of swapping chocolate for sweets, especially in like the EBD consumption occasion, cash [indiscernible] [indiscernible] Yes. So we under index in suites. We are underdeveloped. So for us, it is an opportunity incremental consumer occasions. So we do look at that as as helping us in that way. It also helps us with our seasons portfolio where we're already quite strong but being able to get some of these innovative suites components into seasons a new opportunity there as well. Thank you. Our next question is from Lia Jordan with Goldman Sachs.

Good morning. Thank you for taking my question. I wanted to ask about the market share declines in everyday chocolate that you noted in the prepared remarks. First, curious how that trended versus last quarter and throughout the quarter? And then as you think about potential drivers for improvement going forward, how much do you think is dependent on an improvement just in The cyclical impulse in the C store channel versus the need to drive bigger innovation like you're planning [indiscernible] competition and newness has just been intensified from smaller players.

Sure.

So I'd say the everyday is getting better. We have significant improvement with suites and we've also seen significant improvement in take home. Some of those improvements were driven by strength in the category and certainly as we lapped some of the retailer specific pressures that we had the prior year and then we lapped through those and got back to a normalized position relative to distribution and merch. That was very helpful. Innovation is an important lever and we are looking across each of our pack types to make sure that we've got that right innovation as there is increased competition for shelf space, having the right innovation within each pack type is incredibly important. So we have dialed up some of the innovation levels and take home this year and we think that The will result in TDPs and growth. Next year really The share outlook is driven by continued acceleration in suites, continued strength in seasons and improvement in every day We do have the biggest innovation that we have had ever on Reese coming to the marketplace And so, more news to come on that later this year. And we'll continue to work with our commercial partners to improve trends in these consumable business.

That's an area of the portfolio that is driven by some of these macro pressures and the consumer pressure, particularly in convenience store, Class of Trade. There's just a little bit of downward category pressure The, We see more momentum and upside on the other areas. But we continue to focus on share there as well.

That's very helpful. Thank you. And The maybe just following up on that C store discussion. It sounded like last quarter you were going to invest more in variety brands and lean into your gold standard planogram. So it sounded like The the channel is still soft, but are you starting to see any improvement as you kind of implement those plans? So we have seen improvement. On our variety portfolio, we saw improvements by about three points in our trends from Q3 to Q4. The are still pressured, but we are seeing some significant improvements and we are in the process of ramping up that gold standard. So that takes some time to implement. So you sell it in It does require a reset by the retailers. So we are continuing to monitor that, but I have a lot of confidence based The the places where we've tested The, it has the impact as the old planogram. So we're confident in those lifts. And we'll continue to see those hit the marketplace as we as we progress through the year.

More of that upside will come closer to midyear into the second half.

Great. Thank you. Thank you. Our next question is from Michael Laber with Piper Sandler.

Thank you and good morning. [indiscernible] You mentioned in your prepared remarks, you're seeing cocoa end users adapting through reformulation. Could you maybe touch on what exactly you're seeing The? And if you are reformulating your [indiscernible] So we have over the last several years always looking at where they're maybe some opportunities on formulation, but it's critically important we maintain the taste profile and the specialness of our Icon it's a place we look at, we test, And in some parts of our portfolio, over time, we've made some changes. We'll continue to look in that space. And I would say in all the changes that we've made thus far, there has been no consumer impact whatsoever. As you can imagine, even on the smallest brand in the portfolio, if we were to make a change of the extent of consumer testing, it's an area we look at, but we definitely want to make sure that we're we're focused on the consumer.

We have been seeing some increased global demand across the market for Cocoa alternatives. So we are seeing some folks who are pressured who perhaps have the opportunity to switch to cocoa butter alternatives. Obviously, we do that where possible, but we're pretty precious about the brands and what they stand for with consumers. Okay.

That's helpful.

Yes, it does create some demand destruction in the market as we see others do that.

Okay, got it. And you touched on something I don't think you've mentioned before, which is The potential Is that How far on the horizon how far off is that? Is that something to kind of consider as a potential substitute or at house should we just think about what role if any of that may play over the The, say, few years?

It's something we're watching very closely. I don't think it is necessarily near term.

But I think it can be a game changer and it's certainly getting a lot of investment right now. So I think it's something to watch.

Okay.

Thanks so much. Thank you. Our next question is from Chris Carey with Wells Fargo Securities. Please proceed with your question.

Hey, good morning, everyone.

Just first Steve, the implied gross margin for Q1 I think is like 41% and maybe roughly 35% for the remainder of the year.

Is it fair to assume that the core differential there is cocoa inflation or are there other considerations that we should be thinking about?

Yes, we'll be for the first The, we'll be down less than 500 basis points more than that like we talked about earlier in the second And yes, the answer to your question, cocoa is really the biggest component. The inflation in the other areas of the other commodities, but also labor, warehousing and so forth, those things are more evenly paced over the year.

Okay, great. And then, Michelle, obviously, you announced plans to transition out of your role, which is exciting. Can you maybe provide any more color or just context on the search process timing and The sorts of capabilities you would be looking for as an organization?

Sure. So we've had a framework for long term succession in place always. As companies always do. Now that I have announced a firm date for my retirement, the search practice The the search process is actively underway, if that is appropriate. We will conduct a very robust search process led by a search committee on the The Certainly, we will be recognizing and paying attention to the fast evolving industry and world that we are all living in and and being very selective to to bring on board somebody who has the right skills, experience, qualifications and people focused to allow us to win during this environment. So I'm confident we will find the right success here and I'm working closely with the Board on that to ensure the right selection and a seamless transition But I am absolutely 100% laser focused in the interim on delivering this 25 plan continuing to execute our transformation and making sure I'm positioning the company for next phase of growth.

Thank you. Our next question is from Rob Dickerson with Jefferies. Please proceed with your question.

Great. Thanks so much.

I guess just around $26,000,000 maybe it's a question more for Steve, Michelle, you can chime in.

I guess What I'm hearing today is, The the price comes down maybe mid crop comes in okay, supply demand dynamic.

Start to settle, maybe demand weakens a little bit, so it kind of pulls it down. I think The direct comment or The line in the prepared remarks, right, that hopefully as you get to 2016, you're kind of more balanced top and bottom line growth.

But then Steve, The kind of heard you also kind of mention on algo. So I'm just trying to gauge a little bit better like how you kind of feel out '26, right? Is it like clearly if cocoa comes down a bunch, then our earnings can go up a bunch.

If it comes down some, then really what we're hoping for is more on algo [indiscernible] once you have a year like this year such that absolute earnings are so far down, To me, kind of the core question is, okay, we could be back [indiscernible] But is there kind of a scenario that has some decent probability around it such that you could be like way above on algo growth and kind of try to get back more of those absolute earnings. That's all I have. Thanks so much.

Sure. Yes. So we see a path even at these cocoa prices to EPS growth for 26%, again on the back of some aggressive actions. That we talked about earlier that we're framing for execution depending on what we see particularly in the first half of this year. And then I think there's an opportunity for outside growth. We get some help from Coco and we see Coco start to backtrack. So those are kind of our operating assumptions The we mean when we say on or when we say that we want to see balanced growth. Next year. That's what we're shooting for. Okay. Okay. And then makes sense. And then I guess just quickly, while I fully respect that you, I don't think ever talk about your hedging practices, Is it fair to assume that kind of like where COCO sits today right, that maybe [indiscernible] you kind of give it a little bit more time before you start to really actively hedge 26. And I think you kind of kind of vaguely touched on that, right? We'll see kind of how it plays out. But if you do think it comes down like my assumption would be kind of wait A bit.

Before you start to hedge.

Yes, we can't comment too much on the timing of the plan for 'twenty six hedging. For competitive reasons, but we've got a great team. They're very close to what's happening in the cocoa markets. And what's happening on exchange, off exchange and other innovative solutions. And so we're going [indiscernible] to take advantage of that. We've got the best The traders out there working this. So we're going to leave it in their hands and we'll get more information as the year progresses.

All right.

Super. See you in Florida.

Thank you. Thank you.

Thank you. Our next question is from John Baumgartner with Mizuho Securities.

Good morning. Thanks for the question.

Michelle, Good morning. I wanted to come back to Alexi's question [indiscernible] down about 5%.

The was a little bit worse than 2023 even though pricing in 2024 was about half the magnitude. And it sounds as though the GLP-1s are not a big driver, but health and wellness may still be having some impact, I guess independently.

So how would you bucket the factors driving chocolate declines at this point between health and wellness, any shift into non chocolate consumption versus savory snacks or maybe just outright demand destruction from prices? It feels like there's a lot going on simultaneously.

Yes. So I'd say there is a lot going on. So I would start and say, if I think about the broad confection category, first of all, sweets has really been a high growth area. So there's been some mix that's been evolving The. Suites delivers on a different palate experience. Suites has a value component to it. So that's been one factor in impacting the overall category and certainly having an impact on chocolate. That's been in place for a while. That's been a longer trend, but continues to be there. I think we've seen a lot of channel evolution So there's been some pressure in some of the primary channels where a lot of chocolate is sold areas like convenience And then there's been some growth in some of the unmeasured channels that have traditionally not been as strong across mainstream chocolate. And so we're shifting our focus is to really accommodate The. And the overall category growth is really strong in those places. And that's an opportunity for us and also I think for the category. I think the consumer focus on health and wellness is also a continuation. I don't see it as a mass [indiscernible] And certainly, we're seeing really nice growth on our Zero Sugar line of products and also our protein line of products, both of which we put a heightened focus on growing.

And we see a lot of opportunity on those going forward. Thanks, Michelle.

Thank you. Our next question is from David Palmer with Evercore ISI.

Please proceed with your question.

Thanks. Good morning, guys. I wanted to ask you about maybe some big picture growth bucket questions. I mean, primarily, I'm curious about seasons and how you're thinking about that this year. It's been a greater area for growth Some tough comparisons maybe have been lapped at this point from COVID. I'm wondering how you're sort of budgeting and forecasting seasons as a grower this year? And then if there's any other commentary from a channel perspective, [indiscernible] also had sort of a post COVID lack of recovery that I think was notable. And I'm wondering how you're thinking about that channel and any other insights? Thanks.

Yes. So we're expecting strength in seasons this year. We've been pretty consistently doing very well during seasons. I think there's a very strong emotional component with consumers that makes them want to participate in seasons regardless of what may be going on in the macro environment. And they love their brands that have part of The traditions and rituals over the years with their families. This year, Easter is advantaged being a late Easter, so that elongates the season and we expect strong growth. We expect to gain share The. And we also continue to believe that we'll do well in the other seasons. As you know, for in the prior year in a season helps to set up success in the following year and we feel good about what we delivered in the seasons this year The give us a good foundation as well going into 2025.

And then any comment on convenience as a channel? Do you think that The will be in line with your forecast broadly or What's your thoughts there?

Yes. I think that convenience will absolutely be in line with our forecast. We are continuing to forecast some pressure in that channel until we see it stabilize more. So we'll lap some parts of that pressure, So that will be a help, lapping it about the summer timeframe. So continued softness until we see that lap.

The makes sense. Thanks very much.

Thank you.

Thank you. This does conclude our question and answer session. You may disconnect your lines at this time.