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| Statement |
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| And we successfully raised the depth of those promotions again, which is helping us drive through the 11% pricing that we saw in Q1 |
| So, very strong gross margin quarter led to a higher EBITDA |
| Today's results reflect sector-leading volume-driven net sales and profit growth with meaningful margin expansion as a result of excellent operational execution |
| We have generated a very strong momentum in the Rao's mega brand, which we expect to continue through the second quarter and balance of the year |
| Given our robust Q1 results and the continued momentum in our business, we are raising our guidance for net sales and adjusted EBITDA |
| Robust trends for the Rao's brand continued in Q1 |
| Rao's grew net sales 38% surpassing $600 million on an LTM basis and for the first time ever achieved the number one dollar share in the food channel |
| The primary driver of this growth was the substantial gain in household penetration up 120 basis points versus Q4 for the total franchise and up nearly 100 basis points for SaaS |
| These gains represented the largest quarterly increase in household penetration in the last three years benefiting from robust distribution growth, which was up 22% for Sovos in the quarter as well as higher brand awareness that was driven by a substantial increase in marketing |
| We're very pleased with elasticities, which have continued to be better than historical and better than what we had modeled, especially on the radios business |
| So we're pleased with our pricing is |
| In SaaS, we grew dollar consumption 22% with units up 16% both well ahead of the category |
| We also delivered sustained growth in frozen entrees, soup and pasta with combined retail dollars up 46% in the quarter with each of these Rao's businesses growing distribution, household penetration and dollars well ahead of their respective categories resulting in market share gains |
| And the pricing has been well accepted by our retailers as well as our consumers |
| And our most recent non-safe launch into frozen pizza although still in the early stages is delivering in line with our expectations and we are excited about the retailer and consumer interest we have received thus far |
| I mean, really, really, I mean as you recall from the last quarter, I mean, I stated we're beginning really strong out of the gates as we began Q1 following a very strong 2022, Q4 momentum honestly even stronger than expected |
| So we're in really good shape for the type of growth we've been seeing on the soft business that, it's 30% plus |
| Turning to noosa, the brand grew net sales 8% in the quarter, driven by strong performance in non-measured channels |
| Our core eight-ounce offering grew dollar consumption 9%, outperforming the category on a unit basis and benefiting from distribution and velocity |
| But right now, as I said in the prepared remarks that we are at or above target on our sauce and yogurt business and significantly better than a year ago and approaching target on a frozen business for search |
| But we're pleased our promotional strategies have been consistent across the year |
| So we have the strongest repeat in the category |
| Our total frozen entrées business inclusive of Michael Angelo's and Rao's, grew net sales 10% in the quarter with consumption up 11%, which was ahead of the category |
| With healthy inventories, significantly better service and increased brand investments we are growing distribution and velocity in our Sovos Brands frozen business and remain confident there is a long runway ahead for growth |
| Broadly speaking, our increased investments in marketing, R&D, selling and supply chain, are driving robust sales and profit results for our company |
| So we're -- regardless of price we're showing growth across all income cohorts and growing robustly in the lower and middle income cohorts |
| And given the inflation in the store Rao's Sauce compares very, very favorably to a host of commonly purchased items in the food store |
| So, we've got very, very strong upside on both |
| And the key driver there is just a very healthy distribution gains up 22% year-on-year TDPs with more than one-quarter of our top 20 accounts growing GDP double digits for a brand that size |
| I want to commend the team, on their performance in the quarter helping to deliver over 200 basis points of gross margin expansion and 30% adjusted EBITDA growth |
| Statement |
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| With many more at-home eating occasions today, than prior to COVID and traffic trends at restaurants remaining under pressure from cautious consumers |
| It's a business that we had mentioned that we had some -- when I say capacity, it's more around supply constraints that caused capacity issues that led to some service degradation |
| Michael Angelo's net sales were down 6% in the quarter with the launch of sauce, partially offsetting the proactive decision, to exit certain lower-margin frozen SKUs |
| And then, we all said this already last year, where in Q1 of last year shipments our net sales was well below consumption |
| While we did experience the largest quarterly household penetration gains in three years on Rao's sauce our household penetration is still less than half the level of several competitors, unit share is below 7% and awareness of 58% is well below the greater than 90% levels for peers |
| And Michael Angelo's declined 5.6%, primarily as a result of exiting certain channel-specific lower-margin SKUs |
| If you recall there was a fire at our dry pasta supplier that we used for frozen and glass shortage, due to the war or in crane center |
| So we've seen a little bit of unit fall off there |
| We also continue to expect that elasticities will normalize albeit at a slower pace than we previously anticipated |
| And I'll just compare it because in Q1 of last year, we did have pinch points less because of like the more supply constraints |
| I guess in light of the new top line guidance and your comment about maybe some costs mitigating a little bit faster than you had expected |
| And the brand remains highly underpenetrated and undershared in each of its non-sauce businesses |
| Correct me, if I'm wrong on that |
| Pricing, of course, falls off across the year versus the pricing we saw flow through in Q1 |
| First, we knew household penetration would increase |
| Yes, last year in Q1, we had some spongiservice outages |
| So we may launch a product at a lower margin |
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