Once Upon A Farm Pbc Q1 FY2026 earnings call

• Feel it's a good time to be on offense with the brand, household penetration at 5.8%, strong repeat and consumer connection. - Plan to reinvest into marketing and infrastructure spend. - No significant changes in competitive landscape, still performing well. - Innovation like meat, bone broth and legume pouches in coolers, coolers becoming more productive with these items, products tested well with strong potential for repeat.

Mentioned mixing heavier into snacks versus pouches and club business, expecting higher top line sales and EBITDA, with consideration of mix impact on margin. No specific absolute financial figures or detailed revenue contribution % provided.

• Expect higher top line sales and carry down into EBITDA number. - Disciplined with given guidance, hope to do better through the year. - Confident in mid-teens adjusted EBITDA margin structure in mid-term. - Set guidance conservatively, consumption running mid to low 30s, toward end of first quarter and April higher, planning to increase expectations as go through year.

• No significant changes in competitive landscape mentioned, but general business risks exist. - Consumer uncertainty and potential impact on pricing if needed.

Q: Maybe on a related follow-up, what are you seeing in the competitive environment?

A: There's been no significant changes in the competitive landscape on the last call. We're still twice as productive on a dollar sales per point across like pack sizes there, continuing to perform really well. We're not seeing any change really in our categories income in the promotional intensity either.

Q: Maybe just to start out, I did want to ask on pricing actions and maybe your thoughts as you look forward in kind of this more inflationary environment, but also, right, one where maybe the consumer, there's some uncertainty. Price mix up over 20% in the quarter. It sounded in the prepared remarks like that was driven by price increases, maybe not as much mix, but maybe just update on what you saw in the quarter with that and kind of how you think about pricing as we look forward.

A: First, on the first quarter and the price mix, that was really – we took a price increase in our pouches in 25. That price increase was effective end of Q2 and – and really became effective in Q3, Q4 of 25. What we're doing is we're copying against where we have a price increase built into 26. We're copying against a quarter that does not have the price into it. So that's why the price volume increase was, price mix was showing higher in Q1. But we are looking at, We believe that if the economy and price pressure keeps going up, we have the capability of taking pricing down the road. Our brand is fairly inelastic. We don't anticipate a price increase having any impact on our velocity, our growth of the business. So we are keeping that in mind. We're looking at opportunities on very strategic price increases potential for the future if we want to be able to take them. But at this point, we have nothing. We're not looking to do a price increase in the immediate future, but we may look at that opportunity down the road.

Q: Follow-up just on maybe some of the promotional timing that you referenced. We did see the slower kid pouch growth. Is that where the promotional timing really was most in effect? And kind of how do you see promotional cadences as we look out over the course of this year?

A: Yeah, we're not changing anything significant in our promotional cadence. We leaned in a little bit more aggressively in the first quarter to do things like get display and just get extra – placement and visibility for the brand at retail, tags up in places where we knew that there were going to be millions of consumers that were going to be hearing about the brand for the first time. And we wanted to make sure that we were very visible in store. And we accomplished that. You know, it's not always just price. It can be signage in store. It can be a whole bunch of different tools that you use. And we've done those. But we don't expect on our corp house business any change really at all in the overall cadence of promotion in that business. or in the depth or frequency at all. That business is in a really healthy place and the trends are really continuing to grow as we've improved packaging, we've improved placement, we've moved more of our products from singles to multi-packs and positioned in a better AUP position against consumers across all channels. And so the trends are good there, we just need to continue them. And we see that in the data every month now and we just want to keep that trend going.

Q: My question is kind of around the innovation. You launched or announced, you know, a lot of a lot of innovation. And you mentioned, John, kind of the meat-based, meat and bone broth and legume pouches. And what I'm interested in is, number one, where those are going in and how far along you are in that process of getting those into the coolers. Do those Does that product all go into the baby aisle cooler? Is some of that going into the dairy set? And then kind of a follow-up to that, where you do have that in market today, what is that doing to the productivity of those coolers?

A: Sure. So we ended the quarter with about 3,700 coolers in market. Larry mentioned in his commentary, or I mentioned in my commentary, I'm sorry, that we would be about 5,000 coolers by the end of the year. These meat, bone broth, and legume pouches are all focused on going into those coolers. We started getting placements in some significant numbers of coolers in the April timeframe. and it'll take a quarter or two with resets and just the shelf work required to get them into all those coolers. Our goal would be to have those items in all of those coolers by the end of, you know, a couple quarters from now. The interesting thing is we have basically daily or weekly insight into the velocity that's coming out of these coolers, and literally the moment these products have hit the coolers, the coolers have become at least 20% more productive just on those items coming in, and in some cases, significantly more. And that, of course, is all in the timeframe we're talking about, John, is all trial, right? I mean, they get in there and you got a week, that's all trial. We don't know what repeat is yet. However, these products tested extremely well, and we have a pretty strong, well-proven methodology for testing products and anticipating how the repeats going to be we expect repeat to be really strong and for these coolers to be extremely incremental to our assortment we do have in the in those coolers that I mentioned where we've got the velocity information and the productivity information we know that it's extraordinarily incremental to our assortment as you would expect right these are meat bone broth protein position pouches going into the assortment that we had there and that did not have that in the assortment before. So it makes sense it would be very incremental as well.

Q: I guess first off, just obviously fiscal first quarter sales growth, almost 44%, well above consensus for the quarter. And you basically flowed through, I think, a little more than that upside at the midpoint to the full year guide. With that said, I guess the implied growth rate right at the midpoint for the balance of the year is now about 29%, which is a step down from the first quarter. And I'm just trying to get a sense of, you know, how much of that is simply conservatism versus the fact that, you know, the 1Q comp was also a bit softer this versus something maybe more discreet you're seeing in the rest of the year that would kind of result in the deceleration?

A: No, we want, you know, our approach, Andrew, is to set our guidance conservatively. Our consumption, as was mentioned in the prepared comments, is running in the mid to low 30s, and toward the end of the first quarter and into April, it's been higher than that. We just want to make sure that we're setting ourselves up to continue to increase expectations as we go through the year. There's absolutely nothing in our business that shows any kind of deceleration right now. In fact, it's the exact opposite. But we also want to make sure we're planning conservatively, guiding conservatively, and making sure that we can deliver against the commitments we're making to our shareholders.

Q: Just a couple of questions. Hi. I wanted to ask, there's a sales beat But there's also higher costs for freight and for fuel. After the extra cost, is there money left over for reinvestment? That seems like a pretty big number for fuel inflation. I just want to see exactly how much extra is being put back into the business.

A: Yeah, Rob, there is extra that the way we're modeling it, there is extra to be able to be put back into the business, specifically into marketing for the year. We're looking at $3 to $4 million with the potential of going up from, you know, potentially move from adjusted EBITDA back into investment into the company for driving and, you know, really into the year 26 and really setting us up for 27 for the year.

Q: The second question was, you mentioned yourself that you got a lot of attention from the IPO. Is one of the reasons for conservatism that it might have spiked a lot of trial or one-time use and it's unclear whether the repeat will be there in 2Q and 3Q? I'm sure you're very confident that it will be, but is there any way of gauging how much extra sales you got from all that attention?

A: Well, you know, we know there was obviously a lot of engagement with the brand during the IPO from an earned media standpoint. We could see it online. We could see it in press hits, all that stuff. There's no question about that. We get repeat rate information from our panels on a monthly basis. Through the whole quarter, we saw increases in our repeat rates and engagement. And, you know, I would just say if you just kind of look at the, The way the products are turning out there, it feels really solid to us. We also want to make sure that we're just setting the bar at a place where we can plan around it for contingencies, things like that, that could happen in the economy that we have not seen yet and we're not expecting, but we also want to make sure that we're careful in the way that we plan. And our objective and goal would be to continue to increase our outlook as we go through the year. That's been our philosophy. And, you know, we want to build and earn some credibility around calling our numbers. And that's why we've taken this approach with our forward guidance. Even though you could argue from a consumption standpoint, we could have taken those numbers higher. I'd much rather take them up later based on actual execution versus, you know, just, you know, extrapolation.