Good day, and welcome to the Conagra Brands Second Quarter Fiscal Year 2026 Earnings Q&A Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Matthew Nieses. Please go ahead.

Good morning, everyone, and thank you for joining us. Once again, I'm joined this morning by Sean Connolly, our CEO, and Dave Marberger, our CFO. We may be making some forward-looking statements and discussing non-GAAP financial measures during this Q&A session. Please see our earnings release, prepared remarks, presentation materials, and filings with the SEC in the Investor Relations section of our website for descriptions of our risk factors, GAAP to non-GAAP reconciliations, and information on our comparability items. I'll now ask the operator to introduce the first question.

Our first question is from Andrew Lazar with Barclays. Please go ahead.

Great. Thanks so much. Happy holidays, everybody. Good morning, Andrew. Good morning. Maybe to start off, you've mentioned in the prepared remarks that you're seeing some of the delayed shipments materialize in December. On top of this, you've got easier comparisons starting in frozen, a return to full merchandising, and a full innovation slate that you've talked about. And then some pricing in Staples brands with, so far, expected elasticity. So I guess all in, would you be expecting positive year-over-year organic sales in fiscal 3Q? Or are there other things in the third quarter that we need to keep in mind?

All right. Let me break that down for you. Yes, like what I'm seeing so far in December, as we mentioned in the prepared remarks. And I like where we sit going into the second half here with some momentum. We don't provide formal quarterly guidance, but I will say that overall, we do expect organic net sales growth in the second half. And as for the quarterly flows, if you incorporate the information we're sharing today into your models, you will get a more accurate balance between Q3 and Q4. Dave, you want to add any color to that?

Yes. I mean, Andrew, I think you hit it with the shift in the kind of the trade inventory from Q2 to Q3. Wrapping the supply constraints from the prior year and then wrapping the unfavorable Q3 trade adjustment a year ago. They're the three big things.

Great. Thank you for that. And then, earlier this week, Sean, another food company mentioned a higher cost of volume. Shoppers are increasingly sort of waiting to buy more of their needs on promotion. It's not the depth or frequency to change much. It's just the amount of a product being sold on deal. And it's partially, at least, seems to be coming at the expense of base or sort of full-price volume. I'm just curious if you're seeing the same thing at this point or expect to? You have some vagaries obviously because you're getting back to full merchandising in the back half that you didn't have last year. But just trying to get a sense of what you're seeing more broadly in the industry with regard to that sort of dynamic. Thank you.

Yes, good question. I saw that regarding cost of volume, we have not seen what you just described. We built our plan to invest margin for continued upward volume inflection in frozen and snacks. Coming into the year, when we built the plan, we fully understood the cost of that inflection from last year when we strung together six straight quarters of consistent volume progress prior to running into those temporary supply constraints in frozen that we've talked about previously. So what we're seeing this year is unfolding very consistent with our expectations, which, of course, was based on last year's experience. In terms of both costs and lifts.

Thanks so much. See you in February.

See you soon. Thank you.

Our next question comes from Tom Palmer with JPMorgan. Please go ahead.

First, I just wanted to clarify on the annual outlook. You reiterated sales and operating margin. You did take down Arden. I think the $30 million is around 5¢ to EPS if I'm doing the math right. So I guess I'm just trying to bridge, I know there is a range here, but is there something that kind of helps to elsewhere in the P&L that helps to make up for Ardent? Thank you.

Yes, Tom, this is Dave. You can see, through the first half, our operating profit and our operating margin performance is good. Now there's a lot of puts and takes in terms of performance both for this quarter and the first half. But we feel good about the momentum. We've had some favorability with the tariff timing that was more Q1. We've had some favorability in chicken inflation. Although we're seeing some offsets with beef and pork. And importantly, our core productivity programs are really on track. So we feel good about that. We feel good about the second half. And Sean just talked about we're forecasting positive organic sales growth for the second half. We do have some headwinds from absorption. We talked about that in the call. And that's just simply us being really diligent in managing our working capital, our inventories because we're really tracking well on cash flow and we want to make sure that we deliver those numbers. So just given the momentum we have, Tom, and kind of how we plan the year, we think that we can cover the shortfall in Ardent and still stay in the EPS range.

Yeah. And Tom, it's Sean. Just to remind everybody of one other factor. We guided to a wider range this year than we normally do. Because we were very clear-eyed that it's a volatile environment. And there can be things that unfold that are very difficult to predict. That's one of the reasons we put out a broader range this year. So that we could navigate things like what you've seen in Ardent in the trading piece of the business and still hit our guidance. So we like where we are.

Okay. Thanks for that color. And look, I appreciate more coming here in calendar 2026, but I did want to just ask on Project Catalyst. As we think about its potential impact and implementation, should we be thinking about like in some past programs you've had very clear cost savings targets and then any sort of like stepped-up spending be it CapEx related or other types of investments that we should start thinking about? Thank you.

Sure. Let me give you just some more color on Catalyst. So in CPG, you've got big core business processes that for the better part of a century have been heavily manual in nature. And therefore not perfect, let's put it that way. Now, with technology kind of being democratized for even industries with our margin structure, the access to technologies to automate a lot of these business processes is kind of in an unprecedented place. And that's a pathway to more effectiveness and more efficiency going forward. So we've got a fully dedicated team led by some of my most senior leaders to make sure that we implement this. And it's basically a reengineering of core business processes using factoring, especially AI, for more effectiveness and more efficiency. There undoubtedly will be time to complete the project, there will be cost to complete the project. Then there will be a return on the project. And based on what we're seeing after being at this for several months, we're very excited about the potential. And during calendar '26, we'll unpack this in more detail for our investors.

Okay. Thank you.

Our next question comes from David Palmer with Evercore. Please go ahead.

Great, great. Thank you. Just one big picture question. Just looking across your big two retail segments, consumption trends, on a two-year basis would seem to imply a return to growth in the second half of this fiscal year. But then again a modest decline in the first half of fiscal 2027. Strong growth on snacks, and we've got a very strong snacks marketing plan. In the back half of the year to continue the momentum we've got, especially on Slim Jim and Fatty. So that's already growing robustly. Frozen, I know you've had a write-up recently on Frozen, and you could see in our prepared materials today wouldn't pay too much attention to Q2 year on year in frozen because we had a block frozen quarter in Q2 last year. And our goal this quarter in Frozen was to reclaim the market share that we basically loaned out to a competitor when we had supply constraints beginning last winter. And as you could see in the market share charts today, we've clawed back almost all of that. Our biggest business, frozen single-serve meals, almost up to 53, which is pretty much the high watermark for us there. So on a two-year basis, when you factor out the fact that we had a huge quarter last Q2 and we didn't repeat the same promotions this quarter, it's actually a very impressive quarter with good upward momentum. And as you look at the back half of the year on that business on frozen, you're going to have more high-quality promotional activity than we had last year because we were basically out of business on promo last year. And the baseline is looking good as well. And we've got good innovation and things like that. So we've got good momentum in the underlying trends on our frozen business. Vegetable, I think, is back to a record share. And we've got a really good program in the second half. So, that all bodes well. Obviously, it's too early to talk about '27 right now. We're gonna have very good momentum on frozen as we go into '27. And snack is already, as I said, growing at near mid-single digits. Great. Very helpful. Thank you.

Our next question comes from Peter Galbo with Bank of America. Please go ahead.

Hey, guys. Good morning. Thanks for the question. Sean, I just wanted to get your perspective. You've now had two of your largest peers not only talk about, but start to enact price cuts. And just asking kind of for your crystal ball into the back half of fiscal 2026 and even into early 2027, what that potential activity from some of your largest peers could mean for the group? And do you think it translates to some of the actions you all may need to take? Obviously, considering that you've announced some pricing in some of the Staples portfolio? Would just love your perspective on that, please.

Sure. I'll try to give you some color on that, Pete. We don't have a tremendous amount of overlap with some of the other big food companies that you've seen. And in frozen, we're far and away the market leader in our big business. And in our specific snacks categories like meat snacks and seeds, we really don't interact with a lot of the other big food companies. But the way to think about pricing with respect to Conagra Brands is that we have not rolled back price in order to move volume. What we effectively have done on frozen and snacks is we did not take pricing. Inflation-justified pricing to protect margins. We kept pricing where it was so that we could then layer on a very reasonable and high-quality promotional business that's consistent with what we've done in years past, and get those businesses to growth. And that's what we've seen. So we've seen the desired inflection and in some parts of the business, we're already back to growth. Without lowering list price. We just deferred taking inflation-justified pricing because we were focused on moving volume. So it's a little bit of a different nuance than lowering prices in order to move volume. And when you look at our percent volume sold on deal and you look at depth of discount, you do not see anything beyond what we've done historically. If anything, we're more conservative than what we've done historically. So I guess the net of that is I would say, the volume inflection we're seeing is very efficient. And that's good. And that makes me feel good about this cost to volume concept and how we feel about our guidance. We've seen favorability in chicken. But we're forecasting increased costs in beef and pork. And so we have some offsets there. We see some favorability in tariffs. But remember, more than 50% of our tariff exposure is on tinplate. And there's been no change to those tariff levels. And also, the areas where we've seen some of the tariff come down, our mitigation has come down as well. So it's not a significant impact on the overall year. So I would say our original kind of inflation guidance of 7% and net of five and a half is still where we are.

And, Dave, just sorry for clarification. You ran at about 5% gross inflation in the second quarter if I look at Slide 24. That was it was yes, it was closer to 7% because that's the margin impact. That you see on the bridge. So we were first inflation around a little bit south of seven.

Okay. Very much, guys.

Our next question comes from Max Gumford with BNP. Please go ahead.

Hey, thanks for the question. Your prepared remarks mentioned that 3Q operating margins are expected to be below 2Q levels due to A&P and then also some absorption headwinds associated with reducing inventory. I realize you've framed A&P as going to over 3% of sales in 3Q. But is there any way to size the magnitude of the absorption headwind that you'll see in March? Thanks very much.

Yeah, what I would say is you look at gross margin, Q3 it will be similar to where we landed in Q2. Maybe a little bit better. But again, there's a lot of puts and takes with absorption and absorption timing. So we don't like to get too specific on the quarter. The big impacts, if you look at Q3 operating margin relative to Q2, is over 3% A&P and SG&A as a percentage of net sales will be higher than Q2 as well. So they're really the two drivers. Gross margin is going to be pretty much in line with what we delivered Q2.

Great. Thanks very much. And then longer-term question. Just looking back at your gross margin over time, clearly, it was running in the high 20% pre-COVID. It looks set to end this year around the 24% level. So several hundred basis points below historical levels. And I recognize there's reasons for that. There's investments you've made this year that you're and there's also meaningful inflation that you're not offsetting with price given the consumer environment. I'm just wondering as we look out over the next several years, is there anything that you're seeing that would prevent you from getting back to a high 20% gross margin level? Thanks very much.

Well, we plan on clawing our way north on gross margin. So we absolutely expect margin expansion going forward, particularly in frozen, and the building blocks have not changed. It starts with productivity. So our productivity is running now at about 5%, which is very strong. At some point, we're going to get inflation relief here, hopefully back to a typical 2% level. The third piece is the advancement of our supply chain resiliency investments, including our chicken plants. And over time, we're going to have the ability to repatriate the outsourced production, which will be another tailwind to margins. And we are taking pricing in certain categories as you saw in our documents today. And then the last thing I'll point to is Project Catalyst. This reengineering of our core business processes using technology will be another meaningful contributor. So between those actions and the ongoing efforts to reshape the portfolio for faster growth and better margins, we do expect good margin expansion following FY26.

Okay. Great. Thanks very much. Our next question comes from Robert Moskow with TD Cowen. Please go ahead.

Hey, thanks for the question. Dave, I wanted to ask about the assumption of a 100 basis point headwind in 2Q and the extent to which it can reverse in the third quarter. Because some of it sounds like it's the thought that retailers are just not ordering as much in relation to consumption, then they're going to do in the third quarter because they don't have to worry about the SNAP issues or other issues. But retail inventories have been notoriously difficult to predict. Is there a risk here that retailers just decide to go forward with less inventory than normal for the rest of the year just because they want to be more efficient? And if so, it may be more so in the frozen area than in the shelf-stable? Thanks.

Hey, Rob, it's Sean. I'll give you my color on this. So the way to think about our company, our portfolio is we've got a baseline of volume that is pretty steady across all twelve months of the year. But we also then on top of that baseline, starting usually in the fall, there is another line, which is the seasonal promotional build because we have a lot of seasonal products in the Conagra Brands portfolio. Products that are huge traffic builders at our retailers. So, the retailers have that promotional seasonal volume build in terms of what sells, what scans through, in their base. And every year, they are determined to wrap that essential during the seasonal successfully, meaning at least achieve what they delivered a year ago if not grow a year ago. And promotions are absolutely period to get to that level of absolute volume. So the promotional volume always comes. The seasonal inventory build always comes. It's usually just a dynamic of does that build fall into Q2? Or does that build fall into Q3? And sometimes it's linked to Thanksgiving timing and whether or not Thanksgiving is in Q2 or Q3. Sometimes it's linked more to the promotional calendar. And is the promotional calendar queued up if not grow a year ago. And promotions are absolutely in their base. And every year, they are determined to wrap that successfully, meaning at least achieve what they delivered a year ago so that it's earlier, like it was last year where we had our uniquely a function of the government shutdown and kind of the SNAP pause. Because what I believe it happened with some retailers is anticipating a slowdown in consumer takeaway because of the SNAP pause, manage their working capital too. And there's no reason to build inventory if you've got a pause on the near-term horizon, you can build it later. And so we've already got most of December in the books here, and so we've had a chance to see how orders are shaping up. And it's unfolding in a manner very consistent with what I just described.

Okay. Helpful. Thanks, Sean.

Thank you. Our next question comes from Alexia Howard with Bernstein. Please go ahead.

Good morning, everybody. Can I ask about innovation? Firstly, are there any numbers you can put around where you're at? And I assume that you're now significantly above where you were a few years ago during COVID. Are you now at a sort of level that you feel comfortable with? Maintaining, or is there more increase to come? And then sticking with the innovation theme, I wanted to ask about how you're leaning into the health and wellness trends. It seems as though there's a lot of health and wellness themes going on out there, Walmart has said that they're going to eliminate dirty additives from the whole of their private label portfolio. We've got potential food labeling, front-of-pack legislation coming in. Dietary guidelines coming up as well. I remember you talking about GLP-one unpacked labels. How is that all going? And what are the priorities from here?

Yes, great question, Alexia. Innovation performance over the last several years has just gotten better and better and better every year and it was good to start with. So we've wrapped really good innovation years. And each year, we make progress in innovation, both in terms of TPDs that we're able to secure but also velocity per TPD has gotten better and better. And this year is better than last year, and last year was better than the year before. So I'm very pleased with where we are on innovation, and we'll continue to share more about some of the success stories that we've had with innovation. But I think your second question speaks to also what's driving a lot, not all, a lot of the innovation success. There's undoubtedly a lot of consumer focus these days on health and wellness. And has been the case for fifty years. Kind of the definition of what does good health and wellness food look like in 2026 is different than it looked ten years ago. Which is different than it looked twenty years before that. So right now, and wellness is heavily, as everybody knows and can see, heavily about protein. So the presence of protein in products is hugely important to consumers. That's a major part of our benefit bundle that we've baked into a lot of our innovations. I would say, secondly, clean label continues to be really important as well as vegetable nutrition. So if you think about our portfolio with brands like Birds Eye Vegetables, which are just awesome vegetables frozen at the peak of ripeness, you think about protein, meat sticks, as well as seeds, you think about our frozen businesses like Healthy Choice, which are incredibly clean label, incredibly healthy, high in protein, low in sugar, low in carbs, things like that. It's very well positioned. And so I probably feel like our portfolio is as well positioned today as it's been to compete in a world that's very focused on health and wellness. And one of the things I find most interesting about the double click on that is its young consumers. Young consumers, which we over-index with, are more focused on health and wellness than I've seen in a while. And it is playing right into some of our tailwind businesses, like our protein-focused brands. And that's a real positive. And you see it in categories outside of food, like they're drinking less, things like that. And so you get a good return when you can secure young consumers because you keep them around a lot longer. And we've had really good progress with our young consumers and that's helping us, because obviously young consumers also tend to be lower-income consumers because they're just getting started in their career, and we have a lot of good value products.

Very helpful. Thank you very much. I'll pass it on.

Than they were three years ago. Relatively speaking, it's hard to beat the value and the quality that our products offer. And that value message is that really value as a priority area is being very woven into our innovations themselves. Some of our innovations coming this year will be more value-oriented. And our marketing messages will be value-oriented. And we think, given the inflection we've already got, that will continue to push some of the light or lapsed users back into the franchise and continue to help drive our organic sales growth.

Okay, great. And then I just have one quick follow-up on the weather piece in the quarter, specifically around related to the slow start to winter. Now that we've shifted to much colder weather across the US, just seeing if there's any color commentary around, quarter-to-date trends. Have those normalized with your expectations or anything to think through there?

Yeah. Weather outlook certainly changed in the last couple of weeks. That's great for us. As I mentioned, just to put a fine point on this, there were two weather things in the quarter that we noticed and they're tangible. So we'll just kind of unpack them. One is this hurricane thing. Probably wondered, what is this hurricane thing? Well, we've had hurricanes for ten years. That hit the Continental U.S. And when we have hurricanes hit the Continental U.S., we sell a lot of food in Florida, particularly canned food, also along the Gulf Coast, sometimes the East Coast. And so that's kind of captured in our base. And last year, we had an unusually high hurricane quarter. We did not plan for that this year, but we planned for a normal quarter. We didn't get any hurricane. So that's fortunate for the people along the coastline but it was a little different than we planned. So that was a bit of a headwind. And then the question around when does the cold weather roll in, tends to affect when do we start to see that seasonal ramp-up in our canned food cooking ingredients portfolio, like tomatoes or even canned chili? And so it always comes. It's a question of is it going to come early October? Is it going to come November? So it came a little later than normal, but obviously since the quarters turned, you've seen very cold weather. And you already know what that does to businesses like Cocoa and canned tomatoes and chili. So, yeah, that's another timing factor.

Okay, great. Thank you.

Our next question comes from Meghan Clapp with Morgan Stanley. Please go ahead.

Hi, good morning. Thanks for squeezing me in. I just had a quick follow-up to Tom's question earlier. On the EPS outlook. You mentioned you seem confident on offsetting the shortfall from Ardent. The range is still quite wide. Sean, you mentioned it was wider than normal coming into the year. So you just help us understand what are kind of the key swing factors or uncertainties that remain that justified keeping the EPS range wider now that we are halfway through the year rather than narrowing it? Thanks.

Yeah. I wouldn't overthink keeping it wider. We are just at Q2. So, when we narrow the range historically, it's usually in the back half of the year. As we move toward the end of the year, it's usually not in the first quarter even after the second quarter. So I wouldn't read much more into that other than we're just now finishing up the second quarter, and we got the second half to go. And we'll update that range again next quarter.

Okay. And then maybe just another follow-up on think it was Andrew's question at the beginning. So you talked about in the and in your prepared remarks, the two-year consumption trends in refrigerated and frozen inflecting back to positive. Know that the reported numbers are pretty noisy, and I know you don't want to provide guidance, but as we look to Q3 and just consider the momentum you're seeing in consumption on a two-year and all of these timing shifts and what we'll see in terms of the shipment timing benefit. Would you expect that two-year reported trend in R and F to accelerate versus the first half? I'm just trying to get a sense because the street does imply a bit of a deceleration. So just trying to understand how to think about that segment in particular given the noise. Thanks.

I just I think you can expect a good second half in Frozen. I mean, it's not a lot more complicated than the underlying trends or inflecting northward. Our market shares are either already back to the high watermark or very close to it. The programming that we've got in the marketplace in the next quarter will be stronger than we've had not only in the last quarter, but significantly stronger than a year ago because a year ago, we were basically out of business in the quarter on promotions because of the supply constraints. So all of that lends itself to high-quality underlying momentum in the third quarter and in the second half.

Okay, great. Thanks, Sean.

Thank you. Our next question comes from Chris Carey with Wells Fargo. Please go ahead.

Hey, guys. Just regarding the, you know, inflation, for this year, you know, like, there's some puts and takes but it's basically tracking you know, to where you thought. Is there any reason why it shouldn't be back in that you know, 2% range going into next year based on what we can see today? Are there anomalies with the timing of some of pork and beef inflation that you're seeing? Are there tariff carryover into next year with inventory? I think the comment was we'd like to get back to range over time, but I just wondered if there were anomalies that you're thinking about that would prevent you from getting there going into next year.

No, Chris. You know, I feel like I'm more cautious on prognosticating about inflation now than probably have ever been. But we've looked back one hundred years at these inflation super cycles and when you hit these kind of peaks on any individual commodity that have been a downward slope on the other side of that hill. We just have not as an industry experienced unprecedented, you usually see that yet. Skewed toward proteins, which, of course, remained high. But in our case, it's been a bit more challenging than some portfolios in that we're heavily proteins go up, they usually come down. So at some point, it's going to normalize here. At some point, very soon, we're going to have a lot of this stuff baked into our base already. So you could really start to see some relief in the P&L if things start to break our way.

Okay. We'll see how it goes. From a just from a portfolio standpoint, little bit bigger picture. We've seen a ton of activity in the food sector with portfolio changes. What's going on in the environment right now? Can you just give us the latest on Conagra Brands' approach to its portfolio, you know, how you think through portfolio opportunities one way or the other, and just how the balance sheet and your leverage targets factor into your medium-term objectives. Just any context would be helpful.

Sure. Well, first of all, just to remind the listeners on the call, we have done probably more M&A than most of the companies in our space over the last ten years and that includes inbounds and a lot of divestitures, even separations. So we're quite familiar with that. And of course, prior to being here, I was at Sara Lee where we had a split and we stood up two independent companies. And had a good outcome. So, Dave and I and the Board are always thinking of everything under the sun in terms of ways to create value for our shareholders. And we are not the slightest bit entrenched in any way. If there is a clear path to creating value, we will pursue it, and we have done that in the past. So reshaping has always been part of our game plan, and that has included inbounds from time to time. I don't see us doing that anytime soon because we're focused on debt reduction. But it's also included outbounds. And we only recently completed the divestiture of Chef Boyardee. And while we sold some EPS with that, felt like it was the right thing to do for the portfolio long term. So we'll continue to look at our options there. And if we see a clear pathway to value creation, we are always eagerly in pursuit of that.

Okay. Thanks, Sean.

Our next question comes from Scott Marks with Jefferies. Please go ahead.

Hey, good morning all. Thanks so much for taking our questions. Wanted to ask about the completion of the Baked Chicken facility. Could you just remind us how you're thinking about the cadence of repatriating some of that production and how we should be thinking about the magnitude and cadence of the margin improvement from those actions.

Sure. I'll make a quick comment, and then I'll flip it to Dave. But it's amazing. Chicken's always been an important part of our portfolio, but chicken's just been on fire over the last several years. And our historic business was mostly kind of roasted or baked chicken and that's where we ran into some of the supply challenges last year. We got some quality inconsistencies. We fixed those. That's done. So the baked chicken project is complete and we like the way that looks and that's great. But as you know, we also, in the last year, had some tremendous success with our new Banquet Mega Filets, which is a fried chicken product that basically looks a lot like a Chick-fil-A product. And that's an area where we've had limited capacity going forward. So we've elected to make some additional investments there to increase our capacity. It will take some time to build that out. But that's super exciting because chicken as a protein has just been on fire. And in part, because beef has been so expensive for the consumer. But I would say, even overall, when you look at food service trends and the success of Chick-fil-A and Raising Cane's, things like that, it's just been undeniable. So we're very excited about that being a continued tailwind for us and getting those capabilities in-house enables us to make these products in the most efficient way possible with the best margin. Dave, you want to add to that?

Yes. So we're as we communicated at the beginning of the year with our guidance, we had estimated completing this line, this production at the end of the second quarter, which we have. So now we're in transition of bringing volume back in from the third party. As you can imagine, there's a transition there. And we build inventories and we deplete inventory. So but all of that was built into our guidance, our margin and profit forecast for fiscal 2026. So we're on track and that's incorporated into what we've guided to.

Understood. And then just quickly, second question for me. There was a pretty sizable impairment charge taken in the quarter. I don't believe I saw any details in the press release. So wondering if you could just share any insight around that. Thanks.

Sure. So we had a obviously have had a sustained decline in our stock price and market cap. And so the way that you do impairment accounting if there is a triggering event and this would qualify for where your stock and market cap over an extended period of time is lower, you have to go back and do all the analysis you do for goodwill impairment and brand impairment. So always do this work in our Q4 every year. So the last time we did it was at the end of our third quarter or fourth quarter last fiscal year. We had to do that in the second quarter. And when we went through that process, given the macro backdrop, which has impacted the stock price, obviously, we've made the decision to increase our discount rate. So a lot of our forecasts were the same. And as you see, we're holding our guidance. So we feel good about where the business is going. It's in line with expectations. But because we changed our discount rate, that drove the impairment. So it's really just marking kind of book down to the fair value.

Understood. Thanks so much. Happy holidays.

Thank you. At this time, there are no more questions. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.