General Mills Inc (GIS) Q1 2024 Earnings Call Transcript

General Mills Inc (NYSE: GIS) Q1 2024 Earnings Conference Call dated Sep. 20, 2023

Corporate Participants:

Jeff Siemon — Vice President Investor Relations

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Jonathon Nudi — Group President, North America Retail

Kofi Bruce — Chief Financial Officer

Analysts:

Robert Moskow — TD Cowen — Analyst

Ken Goldman — JPMorgan — Analyst

Andrew Lazar — Barclays — Analyst

Jason English — Goldman Sachs — Analyst

Chris Carey — Wells Fargo Securities — Analyst

Rob Dickerson — Jefferies — Analyst

Max Gumport — BNP Paribas — Analyst

Presentation:

Operator

Greetings and welcome to the General Mills Q1 Fiscal ’24 Earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded on Wednesday, September 20, 2023.

I would now like to turn the conference over to Mr. Jeff Siemon, VP of Investor Relations. Please go ahead.

Jeff Siemon — Vice President Investor Relations

Thank you, Frank, and good morning everyone. Thanks for joining us today for our Q&A session on our first quarter fiscal 2024 results. I hope everyone had time to preview our press release, listen to our prepared remarks, and view our presentation materials, which we made available this morning on our Investor Relations website.

It’s important to note that in our Q&A session, we may make forward-looking statements that are based on our current views and assumptions. Please refer to this morning’s press release for factors that could impact forward-looking statements and for reconciliations of non-GAAP information, which may be discussed on today’s call.

I’m here this morning with Jeff Harmening, our Chairman and CEO; Kofi Bruce, our CFO; and Jon Nudi, Group President for our North America Retail segment.

So let’s go ahead and get to the first question. Frank, can you please get us started?

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Ken Goldman with JPMorgan. Please proceed.

Ken Goldman — JPMorgan — Analyst

Hi, thank you. You mentioned that consumers have been shifting purchases to customers and channels, not necessarily tracked by Nielsen. I’m just curious, as this trend has taken place, have you seen any of your more traditional track customers, I guess those FDM, kind of leaning more into price to try and retain traffic in tonnage? And if they’re not yet, is this something maybe we might expect to see just given past history?

Jeff Harmening — Chairman of the Board and Chief Executive Officer

So Ken, this is Jeff Harmening. And you’re right. We did see increased traction in non-measured channels in the first quarter, and we’d expect that to continue throughout the year. But Jon Nudi, why don’t you give a little color commentary on that?

Jonathon Nudi — Group President, North America Retail

Yeah, absolutely, Ken. So we did see non-measured channels grow at a double-digit rate in the quarter, which obviously drove RNS ahead of movement a bit from NAR. As you look at traditional grocery, we’ve seen frequency up a bit, about 5%, but price points up dramatically versus pre-pandemic. And we continue to invest in our SRM tools. And as a result of that, we don’t expect to see deep discounting as we model, our retailers’ model, which just doesn’t add up at the end of the day. So we’re seeing a bit more frequency, but price points up versus pre-pandemic for sure.

Ken Goldman — JPMorgan — Analyst

Got it. And then thank you for that. I guess quickly into the street’s modeling, just looking at 2Q low single-digit organic sales growth, is this kind of a reasonable range within the context of you not providing quarterly guidance, just trying to get a little bit of color there, especially in light of scanner data, maybe suggesting that performance in NAR is heading downward a little bit in recent weeks. I just didn’t know if that’s what you were looking for.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah, Ken. You’re — go ahead, Jon.

Jonathon Nudi — Group President, North America Retail

Go ahead, Jeff.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah, so I think — first of all, you’re right, we’re not going to give guidance on a quarter either for the segment or for the company. But I’ll give you some — a little bit of color commentary on the year and the guidance because I think that probably is important. I mean, importantly, as we look at 3% to 4% sales growth, I think it’s important to remember that, to know that we don’t really expect a huge rebound in our Pet business for the rest of this year. And due to all the factors we’ve talked about. I would say as importantly, our food service business is growing nicely, and we see continued growth in that. And our International business is up really nicely as well. Yes, we had a Haagen-Dazs recall that we were lapping, and Haagen-Dazs has responded nicely up 20%. That’s not the only thing growing. Our European business was up double digits and growing 70% on our bars business in France and our India business and distributor businesses are also growing. And so I think it’s important to note that even while pet didn’t quite meet our expectations for the first quarter, it’s going to be challenging this year. We have two other big segments that are going to do quite well.

As it comes to NAR, we’re executing really well in NAR. I mean, our distribution is up, the quality of our merchandising are up. Our new products are doing well. And you might say, okay, well, then what happened to share performance in the first quarter. And I guess I’d just remind you that our first quarter is our toughest from a share perspective given the pricing that we’re lapping and our competitors’ gains that they made in getting their supply chains back up in order, and ours were already really good. Ours are improving, too. So as we look at the rest of the year in NAR for those listening, and we do expect our volumes to improve. Importantly, they don’t have to get to positive. They just have to improve from where they are now. And part of that is really going to be gaining share as pricing gets lapped, as the competition comparisons getting tougher and as our get easier because of this supply chain channels. And we think, with all of that happening as we continue to execute well, our NAR business will continue to get better throughout the year.

Jonathon Nudi — Group President, North America Retail

Yeah [Speech Overlap] and one thing I want to add some color on it, on-shelf availability. So Jeff touched on that, and our on-shelf availability is better this year than last year, and that’s great. What’s remarkably different is our competitors and particularly private label. So if you look at private label on-shelf availability in categories like grain and RBG, it’s up 10 points year-over-year. So while that was a tailwind for us where we were on the shelf and private label wasn’t, that’s a headwind this year. That comp gets better as we move throughout the year, and that will help us as we expect to see sequential volume improvement.

Ken Goldman — JPMorgan — Analyst

Makes sense. Thanks so much.

Operator

Our next question comes from Robert Moskow with TD Cowen. Please proceed.

Robert Moskow — TD Cowen — Analyst

Hi, everybody. Thanks for the question. I just wanted to know — I guess, two questions. You’ve had some very significant marketing investment in first quarter. But this is a very tough volume environment. And I wanted to know, what’s your plan for marketing investment for the rest of the year? And do you have — would you keep the same amount of pressure on or would you change tactics mid-year if you’re not getting the volume that you expected?

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah Rob, first of all, this is Jeff. Welcome back. Good to hear you again. And Kofi, you want to take this?

Kofi Bruce — Chief Financial Officer

Yeah, yeah. So you’re correct in noting, Rob, that we were up double digits in the first quarter on our media spend. I would expect for the balance of the year based on everything we see right now, we would expect our media spend to grow at least in line with sales in this environment. I think it’s important for us to put support, brand support behind quality ideas still and especially so as we see the environment stabilize.

Robert Moskow — TD Cowen — Analyst

Okay. Can I ask a follow-up? Your snacking business has improved in the quarter. It’s had some ups and downs. And in the press, you were mentioned as being interested in a major snacking company. As you look at your M&A objectives, is snacking a key area in which you want to expand and possibly through M&A?

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah, Rob. So this is Jeff. Clearly, we’re not going to comment, say on rumors or what has or hasn’t transpired in the marketplace no matter whose transaction it is. What I will tell you is that, for us, our objective with M&A really haven’t changed. I mean we’ve been very consistent, maybe boring over the last couple of years. And that we will look to add about 50 basis points of growth if we can through both acquisitions and divestitures. There are things that will be bolt-on in nature, by which I mean what we can use our current capabilities and our knowledge of channels and technology in order to generate both sales growth and some synergies. And we do have the balance sheet in order to be able to do that. But I will also remind you is that we’ve also said we’ve been disciplined, and we are disciplined. And so, to the extent we see something that we like on acquisitions, we’ll certainly do that, but only at pricing that makes sense for our investors. And so I want you to know that no matter what’s transpired over the last little while in M&A, our position hasn’t really changed. And that includes — I’ve also read commentary, are food companies looking at M&A now because their volumes are down. The answer is no. I mean we don’t play the short-term game when it comes in. We go get brands we like, we hold them for a long time. We grow and we’ve been doing that for 165 years, and we’ll continue to do that. And so what isn’t going to be the case is that we see volumes going in a certain direction. Therefore, we have to make up a gap. That’s really not part of our plan.

Robert Moskow — TD Cowen — Analyst

Got it. Makes sense. Thanks, Jeff.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah. Thank you, Rob.

Operator

Our next question comes from Andrew Lazar with Barclays. Please proceed.

Andrew Lazar — Barclays — Analyst

Great. Thanks very much. I guess with the slower result expected in pet sales for the year versus initial expectations, as you talked about, I’m curious if this impacts your sort of Pet capacity expansion plans in any way? You’ve obviously got a lot of work underway in trying to get capacity going and bringing a lot of that in house over the period — the course of the next year or two. Does that get any impact — does that get impacted in any way? And I guess it’s another way of asking it is, do you still see sort of pet as a sort of high single-digit type of sales growth driver over time for the overall portfolio?

Kofi Bruce — Chief Financial Officer

Sure. Appreciate the question, Andrew. This is Kofi. Look, I think the — I’ll start with the back end of your question first. I think we’re still bullish on the long-term prospects for the pet category. As a reminder it’s a $44 billion category. It’s supported by a 1% to 1.5% pet population growth. And we do think the prevailing trend over the long term will be humanization which will drive growth, in particular, benefit premium brands like Blue Buffalo. I think in the short term, we aren’t making dramatic changes to our capacity expansion plans on dry dog food. I think it’s important as we think about that capacity coming online that late this year, we won’t see the benefits this year. We would expect that it will give us longer-term benefits at a minimum of being able to steer more production to internal capacity, which will also help with margin reconstruction on this business over the intermediate term. So we still feel good. We’re still bullish and a net investor on this business and on capacity and certainly for the long-term strategically.

Andrew Lazar — Barclays — Analyst

Got it. And then, Jeff, I know you and others are certainly talking about the expectation to see improving sequentially volume trends as we go forward, just as the industry gets back to maybe a more normal cadence of sort of marketing and merchandising spending now that service levels are back in a better place and such, which it seems logical certainly. But what I still don’t I guess, have a lot of clarity on and maybe because it’s just a lot of little things that add up is why do you think that broadly, industry volumes are still sort of where they are, even as pricing is starting to lap. And maybe it’s just a matter of timing and these things don’t always line up perfectly in a linear way. But I don’t know there’s been lots of different reasons people were traveling, now they’re back at home or back to school or people hunkering down a little bit. I’m just curious if what your most sort of up-to-date thinking on that might be. Thank you.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah. Sure, Andrew. We spent quite a bit of time on this. And it’s very clear to us that there are three broad reasons. And so there’s not one thing. I mean, there are kind of three and broad reasons for what we see in the marketplace now, especially as one looks at Nielsen trends. The first one, we touched upon this a little bit earlier, but we do see quite a bit of growth in non-measured channels. We’re up double digits in NAR, in the first quarter in non-measured channel, for example. And so, that is certainly a piece of why you see Nielsen data as it is.

The second would be that food away from home, not necessarily in a restaurant. Restaurant traffic has been pretty flat. In fact, quick service restaurant traffic has been up. So there’s a move toward value and restaurants, but that traffic has remained relatively flat. What has changed is that we’ve seen a reversion back to people being mobile and more at education, and healthcare, and hotels, and lodging and that sort of thing, which I think is logical. In fact, if you look at the movement data through airports, it’s up year-over-year. Now it’s only back to pre-pandemic levels, but it’s up quite a bit year-over-year. So that would kind of corroborate that thinking. So that’s the second reason. And the third is there’s probably, as we’ve seen another kind of recession, the consumer recessionary periods, even though technically, we’re not in a recession. Consumer behavior, trying to economize. And so that may be going to smaller sizes and things like that, which in the very short term destocks the pantry, but people aren’t eating less. And we don’t anticipate that they will be less. In fact, what I would say is as consumers start to get squeezed, what generally happens is people move more at home. And now the cost of eating out is roughly four times what it is eating at home. And so as consumers get more squeezed, and as people get in there [Indecipherable] routines in the fall, we would think that at-home eating will probably pick up a little bit, we’ll find out. But that’s what we think. And those are the three factors that is very clear to us are driving the current environment.

Andrew Lazar — Barclays — Analyst

Great. Thanks so much.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question comes from Jason English with Goldman Sachs. Please proceed.

Jason English — Goldman Sachs — Analyst

Hey. Good morning folks. Thanks for slotting me in. I have another question on PAT, but not topline. Instead looking at margins, input costs have been stubbornly onerous for you in PAT, not just you, it seems like the industry at large. The rate of inflation, it’s been a little higher and for a lot longer. What’s driving that? And what’s the forward? Like at what point do we start to get some relief there and get to a point where maybe you can get some margin recovery? And second part of my margin question. I know you expanded treat capacity coming into this year with a third-party vendor. Obviously, you don’t need it with what’s happening with treats, is that a take-or-pay agreement? And is that also a contributing factor to your margins? And if so, how big and how long will that headwind persist? Thank you.

Kofi Bruce — Chief Financial Officer

Sure. Sure. Thanks for the question, Jason. Just a couple of thoughts. So I think on the first, as you sort of take the frame on the year, given all of the challenges of the mix of business, we don’t expect the operating profit margins to improve this year. As you think about the structure of inflation, some of the same trends that are driving stickiness in human food inputs are there and present and probably more so in some of the pet inputs. In particular, the conversion costs, which are heavily factored labor, in particular in the inputs in pet food. So that — until we start to see that trend come off, I wouldn’t expect to see any near-term relief on the inflationary pressures on our input basket for pet food. I think on supply chain, our external suppliers, we generally have a pretty flexible structure. So I mean the benefit of the way we structured those contracts is as we need the capacity, we can get access to it. We don’t have a hard floor fixed cost structure where we would be paying if we aren’t using it.

Jeff Siemon — Vice President Investor Relations

Jason, this is Jeff Siemon. I would just add on that second point. We were able to close down an internal factory, so we weren’t adding capacity to the system. We were just reshuffling where that capacity on treats, specifically was located. And this supplier is — we have a strategic partnership. We have our HMM cost savings program built into that contract. So we like what that can do for us from a profitability standpoint on that business.

Kofi Bruce — Chief Financial Officer

And it’s actually a lower-cost alternative to the internal production in this case.

Jason English — Goldman Sachs — Analyst

Got it. That’s really helpful. I appreciate that. And one more question on margins. Food service dipped sequentially. It’s historically looking back, there’s not a lot of seasonality there, but we’ve seen margins slip for two consecutive quarters, and we’re now at 11%. What’s driving the sequential dip? Is there anything unique about this quarter? Or is this like 11% rate, something we should take to the bank for the rest of the year?

Kofi Bruce — Chief Financial Officer

No, I would expect that we will see margins improve on this business. I do think one of the big factors has been the volatility in flour pricing as we’ve worked through this environment, which is a significant — has been a significant headwind in the deconstruction margins. That’s been put and a take as we’ve moved through the past several quarters, including the last couple. I think long-term, the challenge and the opportunity on this business will come from stabilization of the supply chain, giving us access to a more stable HMM delivery. We are seeing that come through closer to our historical levels in the mid-single-digit range on this business. And we’d expect that the pricing benefits from last year’s significant pricing will also help buoy margins as we move through the back of the year.

Jason English — Goldman Sachs — Analyst

Thanks, Kof. I’ll pass it on.

Kofi Bruce — Chief Financial Officer

You bet.

Operator

Our next question comes from Chris Carey with Wells Fargo Securities. Please proceed.

Chris Carey — Wells Fargo Securities — Analyst

Hey. Good morning, everyone. So just on the pet business, you noted SRM and pack size would be one of the methods that you’re using to kind of like stimulate sales. How long does it take to get those right pack sizes in market? And is SRM your current thinking kind of exclusively or are you starting to think about any pricing adjustments beyond just pack size and just overall SRM?

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yes, Chris, on the — good questions. On the pet business, we’re doing a couple of things. First, and someone asked this question earlier about the amount of marketing spend, but also what we’re spending it on. On what we’re spending it on, the first thing I would say is that we’re going back to some more hard hitting advertising that really gives pet parents a very rational reason to believe why Blue Buffalo feeds them like family. The equity has held up well and — and we think in this environment, direct comparative advertising on why exactly pet parents should pay for Blue is really important. So we’re going back to that. That’s the first thing I would say. On the pricing itself from price pack architecture, we’re doing along several lines of our products. I’ll give you just a couple of examples. And in our dry pet food line, we didn’t have a medium size. We had a lot of large sizes but not some medium sizes. So we’re introducing those. And those start rolling out now but it takes a while for them to kind of get going. The same will be in treating. We didn’t — we are introducing some sizes that has some more entry-level price points. That doesn’t mean low margin for us, it just means lower price points. So it’s good for pet parents.

And then in wet food, we’re looking at some variety packs and things like that, which will probably be more weighted toward the back half of the year. So those are just a few examples of things we are doing to make sure that consumers understand the value. What we’re not going to do is disrupt the value proposition of Blue Buffalo, which is a premium brand. And consumers know us a premium brand. We’ve spent lots of money and lots of years making it the best brand in the premium part of the category. And what I can assure you we’ll do is not to drop that.

Chris Carey — Wells Fargo Securities — Analyst

Okay. Very helpful. Just one quick follow-up. In the press release, you noted that gross margin had benefited from favorable mark-to-market. Can you just remind us of the typical hedging strategy and where you fit for the year, basically trying to understand where there might be some variability if we see any move to inputs? Thanks a lot.

Kofi Bruce — Chief Financial Officer

Sure. So as a reminder, our adjusted gross margin, obviously does not include that mark-to-market benefit. So that is an effect of our GAAP reporting where we do not get the hedge accounting treatment on our commodity hedging program. As a reminder, we’re generally trying to hedge out at the beginning of the year at about 50%. So given where we are in the year, we’re about 65% hedged across all of our four businesses and across all the inputs.

Operator

Our next question comes from Rob Dickerson with Jefferies. Please proceed.

Rob Dickerson — Jefferies — Analyst

Great. Thanks so much. Maybe if we just move to cereal for a minute. It sounds like just some various sources, I believe yourselves included, there’s not necessarily a tremendous amount of growth expected in the category over the next few years. So Jeff, I — it’s probably easier to kind of comment on the category maybe reverting right back to kind of pre-COVID dynamics. For the same time, I felt like during that period of time, there was some acceleration for General Mills specifically, just speaking to the quality of the power of the brand. So like your own Cheerios, Cinnamon Toast Crunch, has done really well. So I’m just curious because you think forward, next year, next three years, kind of like why even state that you would think that category might not grow kind of relative to overall food just as a reminder. And then just secondly, just given the power of your portfolio, like within that dynamic, like I guess what’s the conviction level and your ability to continue to gain share like you’ve done for, let’s say, the prior seven years or so? Thanks.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Yeah. Thanks, Rob. Let me provide some commentary and then Jon follow up as necessary. The first reminder, I would let you know is that cereals still the Number 1 item in the morning for breakfast. And it’s almost 20% of breakfast eatings, I guess 19%. So that’s here in the US. So it’s still highly consumed item in the morning. We’ve been doing very well in cereal. As you know that we’ve grown more than 20% over the last five years. We’ve gained share, I think, five years in a row. We have the two biggest brands in the category in Cheerios and Cinnamon Toast Crunch. We have almost 50% of categories new product volume, and I think it’s 47%. And four of the last five big items are from General Mills. So we’re innovating well. We’re developing our equities well, we continue to grow. And so my expectation for our cereal business is that we grow a little bit every year and hopefully take a little bit of share every year. But keeping in growth, what everybody else says, you’ll have to ask the rest of the competitors in the category, but we like Cereal. We like our brands. I love how we’ve been competing. So Jon, anything you want to add to that?

Jonathon Nudi — Group President, North America Retail

I think you hit it well. I mean at the end of the day, we believe in cereal, and we think it’s a great category. As Jeff said, it’s the most widely eaten breakfast in America today. And as Jeff mentioned, we’ve been really performing well across the board. And we plan to continue to do that. As Jeff said, we don’t need to grow a lot. We can grow a little bit and really like the way that the business runs for us, the P&L looks as well. So we’re going to keep investing. We’re more excited today about cereal than we were even a decade ago. As Jeff mentioned, grew share six of the last seven years. We’re the clear share leader today. And again, that we’re have been in the history of the category, and in the last five years or so, and we’ll keep investing and keep growing the category.

The other question we get a lot is, what happens if one of our major competitors gets more focused? And what we would tell you is that’s actually a good thing. If you go back through history when the two major competitors in the category are supporting the category with marketing as well as innovation, the category does better. So we hope that everyone comes to play, and we can continue to grow those categories as we move forward.

Rob Dickerson — Jefferies — Analyst

All right. Superb. And then just a quick clarification question on pet. A lot of the commentary is really around like pet not really improving that much as we get through the year, given the drivers relative to Q1. I believe last year that was Q2, you did have a fairly pronounced inventory de-load. So should we be thinking that kind of starts to revert out some to provide some tailwind to your volume dynamic in Q2 specific to pet or is it basically maybe there was some de-load and then maybe a little bit of reload in Q3? But maybe some of that inventory is just kind of now being sold through kind of as normal without maybe the more traditional kind of year-over-year rebound from a deal, if that makes sense? Thanks.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

The — it makes sense. I guess what I would say is that, one of the things I’ve learned about pet in the short five years we owned it, first of all, it’s a great category and brand, we’ve doubled the business but also trying to go quarter-by-quarter on a business with this much e-commerce and everything else is a tough way to go. So I’m not going to try to prognosticate what happens. But you do bring up the point, we had an inventory de-load last second quarter. That is true. We’re going up against that but it’s also true that inventories vary quite a bit. And as the business has slowed down a little bit, inventory tends to come out of the system. And so we’ll see what happens in the second quarter. But we’re not anticipating a big rebound in the second quarter from what we saw in the first quarter in order for us to hit our guidance.

Rob Dickerson — Jefferies — Analyst

Got it. All right. Thanks so much.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Thanks.

Operator

Our next question comes from Max Gumport with BNP Paribas. Please proceed.

Max Gumport — BNP Paribas — Analyst

Hey. Thanks for the question. As the industry starts to return to quality merchandising and with your own displays were up mid-single digits, we’re hearing that the lift associated with some of these events, especially endcap displays, aren’t proving to be as incremental as might have been anticipated. We’re wondering if you’re seeing this dynamic and also what you think is driving it? Thanks very much.

Jeff Harmening — Chairman of the Board and Chief Executive Officer

Jon Nudi, you want to comment on that.

Jonathon Nudi — Group President, North America Retail

Yeah absolutely. So as we look at and merchandising at large, I mentioned earlier, we see frequency up a bit of mid-single digits but fell down about 10% versus pre-pandemic levels. One of the things, as I mentioned before, we’ve invested in is SRM capabilities. Our competition has as well and our retailers have also. So as all of us are modeling the various pricing actions we can take. I think some of the tactics are different than maybe what we owned pre-pandemic. I think, we all know that driving deep discounts actually drives dollars out of the category. It drives profit out of the category as well. So what you’re seeing is maybe more frequency at higher price points. And as a result of that, maybe the lift on each deal isn’t higher. But at the end of the day, when you add up all of your merchandising across the year, a little bit more frequency with higher price points, actually drives more dollars for the category and our retailers more for us as well. So you are right, we’re seeing slightly smaller lifts off a higher price points. But at the end of the day, we believe it’s a good thing for a category. And again, the big difference, I think, versus maybe in the past are the SRM capabilities that all of us have delivered or developed and pretty sophisticated models now that we all can have a real — a good conversation with retailers on what to expect from a merchandising performance.

Max Gumport — BNP Paribas — Analyst

Makes sense. Thanks very much. I’ll leave it there.

Jeff Siemon — Vice President Investor Relations

Okay. Frank, I think we’re going to wrap it up there. I appreciate everyone’s time on the call this morning. I know we didn’t get to everyone, so please feel free to follow up with any questions throughout the day or the coming days. Look forward to continuing to connect with you, and we’ll look forward to speaking again next quarter. Thanks so much.

Operator

[Operator Closing Remarks]