J M SMUCKER Co

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide an understanding of our results of operations, financial condition, and cash flows by focusing on changes in certain key measures from year to year, and should be read in conjunction with our consolidated financial statements and the accompanying notes presented in Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in Item 1A. “Risk Factors” in this Annual Report on Form 10-K.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide an understanding of our results of operations, financial condition, and cash flows by focusing on changes in certain key measures from year to year, and should be read in conjunction with our consolidated financial statements and the accompanying notes presented in Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form

Previous wording

We have four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks. These segments in total comprised 86 percent of consolidated net sales in 2025 and represent a major portion of our strategic focus – the sale of branded food and beverage products with leadership positions to consumers through retail outlets in North America. Products within our U.S. retail market segments are primarily sold through a combination of direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, drug stores, military commissaries, mass merchandisers, and distributors. The Sweet Baked Snacks segment includes products distributed across all channels, both domestically and in foreign countries, such as supermarket chains, convenience stores, national mass retailers, discount and dollar stores, club stores, the vending channel, drug stores, and military commissaries. International and Away From Home includes the sale of all products that are distributed in foreign countries through retail channels, as well as domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).

Current wording

We have five reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, Sweet Baked Snacks, and Away From Home. Products within our U.S. Retail reportable segments are primarily sold through a combination of direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, drug stores, military commissaries, mass merchandisers, and distributors. The Sweet Baked Snacks reportable segment includes products distributed across all channels, both domestically and in foreign countries, such as supermarket chains, convenience stores, national mass retailers, discount and dollar stores, club stores, the vending channel, drug stores, and military commissaries. The Away From Home reportable segment includes the sale of all products domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).

Previous wording

Our strategic vision is to engage, delight, and inspire consumers by building brands they love and leading in growing categories. This vision is our long-term direction that guides business priorities and aligns our organization. As a company of iconic brands and new favorites, we will continue to drive balanced, long-term growth, primarily in North America. Further, we will continue to guide the transformation of our business by advancing our strategy of leading in the attractive categories of pet, coffee, and snacking.

Current wording

Our strategic vision is to engage, delight, and inspire consumers by building brands they love and leading in attractive categories. It provides clear long-term direction, aligning the organization and guiding business priorities. As a Company of #1 and leading brands, complemented by emerging, on-trend brands, we will continue to drive balanced, long-term growth, primarily in North America.

Previous wording

Our strategic growth objectives include net sales increasing by a low single-digit percentage and operating income excluding non-GAAP adjustments (“adjusted operating income”) increasing by a mid-single-digit percentage on average over the long term. Related to income per diluted share excluding non-GAAP adjustments (“adjusted earnings per share”), our strategic growth objective is to increase by a high single-digit percentage over the long term. We expect organic growth, including new products, to drive much of our top-line growth, while the contribution from acquisitions will vary from year to year. Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, certain divestiture, acquisition, integration, and restructuring costs (“special project costs”), gains and losses on divestitures, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Due to the unknown and potentially prolonged impact of the inflationary environment and challenged supply network, we may experience difficulties or be delayed in achieving our long-term strategies; however, we continue to evaluate the effects of the macroeconomic environment on our long-term growth objectives.

Current wording

Our strategic growth objectives include net sales increasing by a low single-digit percentage and operating income excluding non-GAAP adjustments (“adjusted operating income”) increasing by a mid-single-digit percentage on average over the long term. Related to income per diluted share excluding non-GAAP adjustments (“adjusted earnings per share”), our strategic growth objective is to increase by a high single-digit percentage over the long term. We expect organic growth, including new products, to drive much of our top-line growth, while the contribution from acquisitions will vary from year to year. Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, certain divestiture, acquisition, integration, and restructuring costs (“special project costs”), gains and losses on divestitures, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Due to a dynamic external environment, we may experience difficulties or be delayed in achieving our long- term strategies; however, we continue to evaluate the effects of the macroeconomic environment on our long-term growth objectives.

Previous wording

Over the past five years, net sales, adjusted operating income, and adjusted earnings per share increased at a compound annual growth rate of approximately 2 percent, 4 percent, and 3 percent, respectively. These changes were primarily driven by an increase in net sales from the acquisition of Hostess Brands, partially offset by the reduction in net sales from the divested Voortman business and certain Sweet Baked Snacks value brands in 2025, Sahale Snacks and Canada condiment businesses in 2024, certain pet food brands in 2023, the private label dry pet food and natural beverage and grains businesses in 2022, and the Crisco® and Natural Balance® businesses in 2021. Net cash provided by operating activities decreased at a compound annual growth rate of approximately 1 percent over the past five years. Our cash deployment strategy is to balance reinvesting in our business through acquisitions and capital expenditures with returning cash to our shareholders through the payment of dividends and share repurchases. Our deployment strategy also includes a significant focus on debt repayment.

Current wording

Over the past five years, both net sales and adjusted operating income increased at a compound annual growth rate of approximately 2 percent, while adjusted earnings per share was flat. These changes were primarily driven by an increase in net sales from the acquisition of Hostess Brands, partially offset by the reduction in net sales from the divested Voortman business and certain Sweet Baked Snacks value brands in 2025, Sahale Snacks and Canada condiment businesses in 2024, certain pet food brands in 2023, and the private label dry pet food and natural beverage and grains businesses in 2022. Net cash provided by operating activities decreased at a compound annual growth rate of approximately 1 percent over the past five years. Our cash deployment strategy is to balance reinvesting in our business through acquisitions and capital expenditures with returning cash to our shareholders through the payment of dividends and share repurchases. Our current deployment strategy also includes a significant focus on debt repayment.

Previous wording

On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands. The total purchase consideration in connection with the acquisition was $5.4 billion, which reflects an exchange offer of all outstanding shares of Hostess Brands common stock at a price of $34.25 per share, consisting of $30.00 in cash and 0.03002 shares of our common shares, based on the closing stock price on September 8, 2023, that were exchanged for each share of Hostess Brands common stock as of the transaction date. The purchase price included the issuance of approximately 4.0 million of our common shares to Hostess Brands’ shareholders, valued at $450.2. In addition, we paid $3.9 billion in cash, net of cash acquired, and assumed $991.0 of debt from Hostess Brands and $67.8 of an other debt-like item, reflecting consideration transferred for the cash payment of Hostess Brands’ employee equity awards. New debt of $5.0 billion was borrowed, consisting of $3.5 billion in Senior Notes, an $800.0 senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”), and $700.0 of short-term borrowings under our commercial paper program to partially fund the transaction and pay off the debt assumed as part of the acquisition. Hostess Brands is a manufacturer and marketer of sweet baked goods brands including Hostess Donettes, Twinkies, CupCakes, DingDongs, Zingers, CoffeeCakes, HoHos, Mini Muffins, and Fruit Pies, and the Voortman cookie brand at the acquisition date. In addition to its headquarters in Lenexa, Kansas, the transaction included six manufacturing facilities located in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana; and Arkadelphia, Arkansas, a distribution facility in Edgerton, Kansas, and a commercial center of excellence in Chicago, Illinois at the acquisition date. During 2025, the acquired business contributed net sales of $1,178.8. We anticipate cost synergies of approximately $100.0, which are expected to be achieved by the end of 2026. To date, we have achieved cost synergies of approximately $86.0, of which approximately $75.0 was achieved during 2025. For additional information, refer to Note 2: Acquisition.

Current wording

On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, a manufacturer and marketer of sweet baked goods brands, including Hostess Donettes, Twinkies, CupCakes, DingDongs, Zingers, CoffeeCakes, HoHos, Mini Muffins, and Fruit Pies, and the Voortman cookie brand at the acquisition date. In addition to its headquarters in Lenexa, Kansas, the transaction included six manufacturing facilities located in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana; and Arkadelphia, Arkansas, a distribution facility in Edgerton, Kansas, and a commercial center of excellence in Chicago, Illinois at the acquisition date. The total purchase consideration in connection with the acquisition was $5.4 billion, which reflects an exchange offer of all outstanding shares of Hostess Brands common stock at a price of $34.25 per share, consisting of $30.00 in cash and 0.03002 shares of our common shares, based on the closing stock price on September 8, 2023, that were exchanged for each share of Hostess Brands common stock as of the transaction date. For additional information, refer to Note 2: Acquisition.

Previous wording

On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM. The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 and $30.0 in 2025 and 2024, respectively, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 during 2025, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Current wording

On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM. The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 and $30.0 in 2025 and 2024, respectively, which were included in the Sweet Baked Snacks reportable segment. Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 during 2025, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Previous wording

On December 2, 2024, we sold the Voortman business to Second Nature. The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 and $65.0 in 2025 and 2024, respectively, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 during 2025, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Current wording

On December 2, 2024, we sold the Voortman business to Second Nature. The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 and $65.0 in 2025 and 2024, respectively, which were included in the Sweet Baked Snacks reportable segment. Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 during 2025, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Previous wording

On January 2, 2024, we sold the Canada condiment business to TreeHouse Foods. The transaction included Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands, inclusive of certain trademarks. Under our ownership, these brands generated net sales of $43.8 and $61.6 in 2024 and 2023, respectively, which were included in the International operating segment. Final net proceeds from the divestiture were $25.3, inclusive of a working capital adjustment and cash transaction costs. Upon completion of this transaction during 2024, we recognized a pre-tax loss of $5.7, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Current wording

On January 2, 2024, we sold the Canada condiment business to TreeHouse Foods. The transaction included Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands, inclusive of certain trademarks. Under our ownership, these brands generated net sales of $43.8 in 2024, which was included in the International operating segment. Final net proceeds from the divestiture were $25.3, inclusive of a working capital adjustment and cash transaction costs. Upon completion of this transaction during 2024, we recognized a pre-tax loss of $5.7, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Previous wording

On November 1, 2023, we sold the Sahale Snacks business to Second Nature. The transaction included products sold under the Sahale Snacks brand, inclusive of certain trademarks and licensing agreements, a leased manufacturing facility in Seattle, Washington, and approximately 100 employees who supported the brand. Under our ownership, the Sahale Snacks brand generated net sales of $24.1 and $48.4 in 2024 and 2023, respectively, primarily included in the U.S. Retail Frozen Handheld and Spreads segment. Final net proceeds from the divestiture were $31.6, inclusive of a working capital adjustment and cash transaction costs. Upon completion of this transaction during 2024, we recognized a pre-tax loss of $6.7, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Current wording

On November 1, 2023, we sold the Sahale Snacks business to Second Nature. The transaction included products sold under the Sahale Snacks brand, inclusive of certain trademarks and licensing agreements, a leased manufacturing facility in Seattle, Washington, and approximately 100 employees who supported the brand. Under our ownership, the Sahale Snacks brand generated net sales of $24.1 in 2024, primarily included in the U.S. Retail Frozen Handheld and Spreads reportable segment. Final net proceeds from the divestiture were $31.6, inclusive of a working capital adjustment and cash transaction costs. Upon completion of this transaction during 2024, we recognized a pre-tax loss of $6.7, within loss (gain) on divestitures – net in the Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

Previous wording

During 2025, we continued to experience input cost inflation and a dynamic and evolving macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, which we anticipate will persist into 2026. Further, the higher costs have required price increases across our business, and we anticipate the price elasticity of demand could remain elevated into 2026 as consumers continue to experience broader inflationary pressures and are selective in their spending. In response to the inflationary pressures, we continue to focus on the delivery of our company-wide transformation initiative to deliberately translate our continuous improvement mindset into sustainable productivity initiatives in order to grow our profit margins and reinvest in the Company to enable future growth and cost savings.

Current wording

During 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, including tariffs, regulatory and policy changes, and shifts in consumer behavior, including health and wellness trends, which could persist into 2027. Further, these higher costs have required price increases across certain areas of our business during 2026 as consumers faced broader inflationary pressures and were selective in their spending. In support of ongoing cost management and earnings growth, we remain focused on executing our company-wide transformation initiative, which is designed to translate our continuous improvement mindset into sustainable productivity gains. These efforts are intended to expand our profit margins while enabling reinvestment in the Company to support future growth and cost savings.

Previous wording

In addition, it is possible significant disruptions in our supply chain could occur if certain geopolitical events continue to impact markets around the world, including the impact of potential shipping delays due to supply and demand imbalances, as well as labor shortages and tariffs. We also continue to work closely with our customers and external business partners, taking additional actions to ensure safety, business continuity, and maximize product availability. We have maintained production at all our facilities and availability of appointments at distribution centers. Furthermore, we have implemented measures to manage order volumes to ensure a consistent supply across our retail partners during periods of high demand. However, to the extent that high demand levels or supply chain disruptions delay order fulfillment, we may experience volume loss and elevated penalties. Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China or Taiwan, we continue to monitor the environment for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions.

Current wording

Additionally, significant supply chain disruptions could arise if certain geopolitical events continue to impact global markets, including the impact of potential shipping delays driven by supply and demand imbalances, labor shortages, and tariffs. We continue to work closely with our customers and external business partners, taking proactive measures to support safety, ensure business continuity, and maximize product availability. Production has been maintained across all facilities, and appointments at distribution centers remain available.

Previous wording

(A)Net sales excluding acquisition, divestitures, and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.

Current wording

(A)Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.

Previous wording

Net sales in 2025 increased $547.4, or 7 percent, which includes incremental net sales in the current year of $669.3 related to the Hostess Brands acquisition, partially offset by $134.0 of noncomparable net sales in the prior year related to divestitures. Net sales excluding acquisition, divestitures, and foreign currency exchange increased $22.8. Net price realization contributed 2 percentage points to net sales, reflecting higher net pricing for coffee, partially offset by lower net pricing for sweet baked goods, dog snacks, and cat food. Volume/mix decreased net sales by 2 percentage points, primarily driven by lower contract manufacturing sales related to the divested pet food brands and decreases for coffee, dog snacks, and sweet baked goods, partially offset by increases for Uncrustables sandwiches and cat food.

Current wording

Net sales in 2026 increased $324.8, or 4 percent, which includes $134.7 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $456.2. Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix decreased net sales by 4 percentage points, primarily driven by decreases for coffee, sweet baked goods, dog snacks, peanut butter, and fruit spreads, as well as the lapping of contract manufacturing sales related to the divested pet food brands in the prior year, partially offset by an increase for Uncrustables sandwiches.

Previous wording

Operating income (loss) decreased $1,979.7, primarily reflecting pre-tax noncash impairment charges of $1,661.6 and $320.9 related to the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, respectively, the $310.1 net pre-tax loss on divestitures, reflecting the $44.2 and $265.9 pre-tax losses on the divestiture of certain Sweet Baked Snacks value brands and the Voortman business, respectively, and an $82.8 increase in selling, distribution, and administrative (“SD&A”) expenses. These impacts were partially offset by the increase in gross profit, a $94.4 decrease in other special project costs primarily related to integration costs associated with the acquisition of Hostess Brands, and lapping a $39.1 charge in the prior year related to the termination of a supplier agreement.

Current wording

Operating income (loss) increased $1,034.1, primarily reflecting a $1.0 billion decrease in impairment charges related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand trademark, the lapping of a $310.1 net pre-tax loss on divestitures in the prior year, and a $32.4 decrease in selling, distribution, and administrative (“SD&A”) expenses, partially offset by the decrease in gross profit.

Previous wording

Our non-GAAP adjustments include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments (“adjusted gross profit”), increased $224.0, or 7 percent, as compared to the prior year, primarily reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and the exclusion of special project costs as compared to GAAP gross profit. Adjusted operating income, which further reflects the exclusion of the noncash impairment charges of $2.0 billion associated with the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, the $310.1 net pre-tax loss on divestitures, and other special project costs as compared to GAAP operating income, increased $188.5, or 12 percent, as compared to the prior year.

Current wording

Our non-GAAP adjustments include the exclusion of amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments (“adjusted gross profit”), decreased $176.4, or 5 percent, as compared to the prior year, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit. Adjusted operating income decreased $146.4, or 8 percent, as compared to the prior year, further reflecting the exclusion of amortization expense, noncash impairment charges, the net pre-tax loss on divestitures in the prior year, and other special project costs as compared to GAAP operating income.

Previous wording

Income taxes increased $68.4 in 2025, as compared to the prior year. The effective income tax rate for 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and the unfavorable permanent impacts associated with the goodwill impairment charges for the Sweet Baked Snacks reporting unit and the sale of the Voortman business, partially offset by favorable noncash deferred tax benefits associated with the integration of Hostess Brands into our Co mpany and certain state legislative changes enacted during the year. The effective income tax rate for 2024 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and unfavorable tax impacts associated with the acquisition of Hostess Brands, partially offset by a favorable tax impact of the sale of the Sahale Snacks business. We anticipate a full-year effective income tax rate for 2026 to be approximately 23.8 percent. For additional information, refer to Note 14: Income Taxes.

Current wording

Income taxes decreased $107.7, or 59 percent, in 2026, as compared to the prior year. The effective income tax rate for 2026 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit and state income taxes. The effective income tax rate for 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to the unfavorable permanent impacts associated with the goodwill impairment charges for the Sweet Baked Snacks reporting unit and the sale of the Voortman business, as well as state income taxes, partially offset by favorable noncash deferred tax benefits associated with the integration of Hostess Brands into our Company and certain state legislative changes enacted during the year. We anticipate a full-year effective income tax rate for 2027 to be approximately 24.4 percent. For additional information, refer to Note 14: Income Taxes.

Previous wording

Divestiture Costs: Total divestiture costs incurred to date related to the divested Sahale Snacks and Canada condiment businesses were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively. We incurred divestiture costs of $0.9 and $5.5 during 2025 and 2024, respectively, which primarily consisted of employee-related costs and a noncash gain related to a lease termination in 2025. As of April 30, 2025, we do not anticipate any additional costs to be incurred related to these divestiture activities.

Current wording

Divestiture Costs: Total divestiture costs incurred to date related to the divested Sahale Snacks and Canada condiment businesses that were divested in 2024 were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges. We did not incur any divestiture costs in 2026 and incurred divestiture costs of $0.9 during 2025, primarily consisting of employee-related costs and a noncash gain related to a lease termination in 2025. We do not anticipate any additional costs to be incurred related to these divestiture activities.

Previous wording

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of the divestitures. We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026. We have recognized total cumulative costs of $6.5 during 2025, primarily consisting of other transition and termination costs. For additional information, see Note 3: Divestitures.

Current wording

As a result of our recent divestitures, we identified opportunities to address certain distribution inefficiencies. We have recognized total cumulative costs of $9.0 related to these efforts, of which $2.5 and $6.5 were recognized during 2026 and 2025, respectively, all of which were cash charges, primarily consisting of other transition and termination costs. We do not anticipate any additional costs to be incurred related to these activities. For additional information, see Note 3: Divestitures.

Previous wording

Integration Costs: Total integration costs related to the acquisition of Hostess Brands are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges, with the majority expected to be cash charges. We have recognized total cumulative integration costs of $184.9, of which $37.5 were recognized during 2025. We anticipate the remaining integration costs will be incurred by the end of 2026 and are expected to be split between employee-related and other transition and termination costs.

Current wording

Integration Costs: We have recognized total cumulative integration costs related to the acquisition of Hostess Brands of $187.4, of which $2.5 and $37.5 were recognized during 2026 and 2025, respectively. These costs primarily consisted of transaction costs, employee-related costs, and other transition and termination charges, the majority of which were cash charges. We do not anticipate any additional costs to be incurred related to these integration activities.

Previous wording

Restructuring Costs: On May 27, 2025, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidate operations into other existing facilities by early calendar year 2026 to further optimize operations for our Sweet Baked Snacks segment. We anticipate incurring approximately $75.0 of costs related to these efforts, consisting of $60.0 in noncash charges for accelerated depreciation and $15.0 in employee-related and other transition and termination costs.

Current wording

Restructuring Costs: During 2026, we closed our Indianapolis, Indiana manufacturing facility, which manufactured Hostess branded products, and consolidated operations into other existing facilities to further optimize operations within our Sweet Baked Snacks reportable segment. We have recognized total cumulative costs of $83.5 during 2026, consisting primarily of employee-related and other transition and termination costs. We do not anticipate remaining charges related to these restructuring activities to be material in 2027.

Previous wording

The raw materials we use in each of our segments are primarily commodities, agricultural-based products, and packaging materials. The most significant of these materials, based on 2025 annual spend, are green coffee, peanuts, oils and fats, flour, sugar, and fruit. Green coffee, corn, certain meals, oils, and grains are traded on active regulated exchanges, and the price of these commodities fluctuates based on market conditions. Derivative instruments, including futures and options, are used to minimize the impact of price volatility for these commodities.

Current wording

The raw materials we use in each of our segments are primarily commodities, agricultural-based products, and packaging materials. The most significant of these materials, based on 2026 annual spend, are green coffee, peanuts, oils, fats, flour, sugar, and fruit. Green coffee, corn, certain meals, oils, and grains are traded on active regulated exchanges, and the price of these commodities fluctuates based on market conditions. Derivative instruments, including futures and options, are used to minimize the impact of price volatility for these commodities.

Previous wording

We source peanuts and oils and fats mainly from North America. We are one of the largest roasters of peanuts in the U.S. and frequently enter into long-term purchase contracts for various periods of time to mitigate the risk of a shortage of this commodity. The oils we purchase are mainly palm, soybean, and peanut. The price of peanuts, protein meals, and oils is driven primarily by weather, which impacts crop sizes and yield, as well as global demand, especially from large importing countries such as China and India.

Current wording

We source peanuts, oils, and fats mainly from North America. We are one of the largest roasters of peanuts in the U.S. and frequently enter into long-term purchase contracts for various periods of time to mitigate the risk of a shortage of this commodity. The oils we purchase are mainly palm, soybean, and peanut. The price of agricultural commodities are primarily driven by weather, which impacts crop sizes and yield, as well as global demand, especially from large importing countries such as China and India.

Previous wording

We have four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks. The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable.

Current wording

We have five reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, Sweet Baked Snacks, and Away From Home. The presentation of Other represents the International operating segment, which does not meet the criteria to be presented as a reportable segment under FASB ASC 280.

Previous wording

The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers, Dunkin’, and Café Bustelo branded coffee; the U.S. Retail Frozen Handheld and Spreads segment primarily includes the domestic sales of Uncustables, Jif, and Smucker’s branded products; the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix, Milk-Bone, Pup-Peroni, and Canine Carry Outs branded products; and the Sweet Baked Snacks segment primarily includes all domestic and foreign sales of Hostess branded products in all channels. With the exception of Sweet Baked Snacks products, International and Away From Home includes the sale of all products that are distributed in foreign countries through retail channels, as well as domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).

Current wording

The U.S. Retail Coffee reportable segment primarily includes the domestic sales of Folgers, Dunkin’, and Café Bustelo branded coffee; the U.S. Retail Frozen Handheld and Spreads reportable segment primarily includes the domestic sales of Uncrustables, Jif, and Smucker’s branded products; the U.S. Retail Pet Foods reportable segment primarily includes the domestic sales of Meow Mix, Milk-Bone, Pup-Peroni, and Canine Carry Outs branded products; and the Sweet Baked Snacks reportable segment primarily includes all domestic and foreign sales of Hostess branded products in all channels. The Away From Home reportable segment includes the sale of all products, with the exception of Sweet Baked Snacks products, domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).

Previous wording

The U.S. Retail Coffee segment net sales increased $102.2 in 2025. Net price realization increased net sales by 5 percentage points, primarily driven by higher net pricing for the Folgers and Café Bustelo brands, partially offset by lower net pricing for the Dunkin’brand. Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreases for the Folgersand Dunkin’brands, partially offset by an increase for the Café Bustelo brand. Segment profit increased $35.9, primarily reflecting higher net price realization, lapping a $39.1 charge in the prior year related to the termination of a supplier agreement, lower marketing spend, and favorable property taxes, partially offset by higher commodity costs and unfavorable volume/mix.

Current wording

U.S. Retail Coffee net sales increased $498.3 in 2026. Net price realization increased net sales by 22 percentage points, reflecting higher net pricing across the portfolio. Volume/mix decreased net sales by 5 percentage points, reflecting decreases for the Dunkin’and Folgers brands, partially offset by an increase for the Café Bustelo brand. Segment profit decreased $93.6, primarily reflecting higher costs, inclusive of commodity costs and tariffs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.

Previous wording

The U.S. Retail Pet Foods segment net sales decreased $159.2 in 2025. Volume/mix decreased net sales by 7 percentage points, primarily reflecting lower contract manufacturing sales related to the divested pet food brands, as the contract manufacturing agreement with Post concluded at the end of 2025, and a decrease for dog snacks, partially offset by an increase for cat food. Net price realization decreased net sales by 2 percentage points, primarily reflecting higher trade spend for cat food and dog snacks. Segment profit increased $57.5, primarily reflecting lower costs and decreased operating and distribution expenses, partially offset by lower net price realization and unfavorable volume/mix.

Current wording

U.S. Retail Pet Foods net sales decreased $63.6 in 2026. Volume/mix decreased net sales by 5 percentage points, primarily reflecting a decrease for dog snacks and the lapping of contract manufacturing sales related to the divested pet food brands in the prior year, partially offset by an increase for cat food. Net price realization increased net sales by 1 percentage point, primarily reflecting higher net pricing for cat food and dog snacks. Segment profit increased $13.7, primarily reflecting higher net price realization and lower marketing spend, partially offset by unfavorable volume/mix.

Previous wording

We acquired Hostess Brands on November 7, 2023, as discussed in Note 2: Acquisition. During 2025, the Sweet Baked Snacks segment contributed net sales of $1,178.8 and segment profit of $219.8. Excluding noncomparable net sales of $669.3 in the current year related to the Hostess Brands acquisition and $66.1 in the prior year related to the divestiture of certain Sweet Baked Snacks value brands and the Voortman business, net sales decreased $61.7, or 11 percent during 2025. Volume/mix decreased net sales by 7 percentage points, primarily reflecting decreases for snack cakes and private label products. Net price realization decreased net sales by 4 percentage points, primarily reflecting lower net pricing across the portfolio. Segment profit increased $81.6 during 2025, primarily reflecting the impact of noncomparable segment profit in the current year related to the Hostess Brands acquisition, partially offset by lower net price realization, unfavorable volume/mix, the impact of noncomparable segment profit in the prior year related to the divestitures, higher costs, and increased marketing spend.

Current wording

Sweet Baked Snacks net sales decreased $207.5 in 2026, inclusive of the impact of $134.7 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands. Excluding the noncomparable impact of the divestitures, net sales decreased $72.8, or 7 percent. Volume/mix decreased net sales by 8 percentage points, primarily reflecting decreases for snack cakes, private label, and breakfast. Net price realization increased net sales by 1 percentage point, primarily reflecting higher net pricing across the portfolio. Segment profit decreased $122.6, primarily reflecting higher costs, unfavorable volume mix, and the impact of noncomparable segment profit in the prior year related to the divested businesses, partially offset by higher net price realization.

Previous wording

Our principal source of funds is cash generated from operations, supplemented by borrowings against our commercial paper program and revolving credit facility. Total cash and cash equivalents increased to $69.9 at April 30, 2025, compared to $62.0 at April 30, 2024.

Current wording

Our principal source of funds is cash generated from operations, supplemented by borrowings against our commercial paper program and revolving credit facility. Total cash and cash equivalents decreased to $58.6 at April 30, 2026, compared to $69.9 at April 30, 2025.

Previous wording

The $19.0 decrease in cash provided by operating activities in 2025 was primarily driven by higher working capital requirements in 2025 and lapping the $42.5 proceeds received from settlement of the interest rate contracts assumed as part of the acquisition of Hostess Brands in the prior year, partially offset by higher net income (loss) adjusted for noncash items in the current year. The cash required to fund working capital increased compared to the prior year primarily driven by an increase in cash used for accrued liabilities reflecting timing of interest payments and a decrease in the payable for transition s ervices agreements entered into in connection with the divestitures and inventories reflecting higher inventory levels and input cost inflation in the current year. These uses of cash were partially offset by an increase in cash from trade receivables due to timing of sales and cash collections and accounts payable due to timing of spend and cash payments.

Current wording

The $263.2 increase in cash provided by operating activities in 2026 was primarily driven by a decrease in cash used for income and other taxes, primarily reflecting the timing of income tax payments and lower taxable income, as well as lower working capital requirements in 2026, partially offset by lower net income (loss) adjusted for noncash items in the current year. The cash required to fund working capital decreased compared to the prior year, primarily driven by lower inventories, reflecting moderation in input cost inflation during the current year, the timing of settling our derivative instruments, and a reduction in payments related to transition services agreements entered into in connection with divestitures. These increases in cash were partially offset by decreases related to changes in trade receivables, reflecting higher sales and the timing of cash collections, and changes in accounts payable, reflecting the timing of spend and cash payments.

Previous wording

Cash used for investing activities in 2025 consisted primarily of $393.8 in capital expenditures, reflecting our investments in the new Uncrustables sandwiches manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities, and also included an increase of $39.4 in our derivative cash margin account balances. These uses of cash for 2025 were partially offset by net proceeds received of $326.0 from the divestiture of certain Sweet Baked Snacks value brands and the Voortman business. Cash used for investing activities in 2024 consisted primarily of $3.9 billion related to the acquisition of Hostess Brands, including $67.8 of consideration transferred for the cash payment of Hostess Brands’employee equity awards, and $586.5 in capital expenditures, primarily driven by investments in Uncrustables sandwiches to support the new manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities. These uses of cash for 2024 were partially offset by proceeds of $466.3 received from the settlement of our equity investment in Post common stock and net proceeds received of $56.3, primarily from the divested Sahale Snacks and Canada condiment businesses, and a decrease of $18.9 in our derivative cash margin account balances.

Current wording

Cash used for investing activities in 2026 consisted primarily of $317.4 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities, partially offset by a decrease of $44.9 in our derivative cash margin account balances. Cash used for investing activities in 2025 consisted primarily of $393.8 in capital expenditures, reflecting our investments in the new Uncrustables sandwiches manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities, and also an increase of $39.4 in our derivative cash margin account balances. These uses of cash for 2025 were partially offset by net proceeds received of $326.0 from the divestiture of certain Sweet Baked Snacks value brands and the Voortman business.

Previous wording

Cash used for financing activities in 2025 consisted primarily of long-term debt repayments of $1,300.0 and dividend payments of $455.4, partially offset by $650.0 of proceeds from long-term debt and a net increase in short-term borrowings of $19.2. Cash provided by financing activities in 2024 consisted primarily of proceeds from long-term debt of $4.3 billion to partially finance the acquisition of Hostess Brands and a net increase in short-term borrowings of $578.2. These proceeds were partially offset by the $991.0 repayment of Hostess Brands’ debt assumed, the $800.0 Term Loan prepayment, dividend payments of $437.5, purchase of treasury shares of $372.8, and an $86.4 payment to terminate the tax receivable agreement assumed with the acquisition of Hostess Brands.

Current wording

Cash used for financing activities in 2026 consisted primarily of long-term debt repayments of $500.0, dividend payments of $464.7, and a net decrease in short-term borrowings of $251.5. Cash used for financing activities in 2025 consisted primarily of long-term debt repayments of $1,300.0 and dividend payments of $455.4, partially offset by $650.0 of proceeds from long-term debt and a net increase in short-term borrowings of $19.2.

Previous wording

As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion, and our rights and obligations to our suppliers are not impacted. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. As of April 30, 2025 and 2024, $340.4 and $384.9 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers. During 2025 and 2024, we paid $1,562.3 and $1,685.5, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

Current wording

As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. As of April 30, 2026 and 2025, $325.1 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers. During 2026 and 2025, we paid $1,270.1 and $1,562.3, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

Previous wording

In March 2025, we also entered into an unsecured revolving credit facility with a group of ten banks, which provides for a revolving credit line of $2.0 billion and matures in March 2030. As a result of the new facility in March 2025, we terminated the previous $2.0 billion revolving credit facility. Additionally, we participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of April 30, 2025, we had $641.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.73 percent.

Current wording

We have available a $2.0 billion unsecured revolving credit facility with a group of ten banks that matures in March 2030. Additionally, we participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of April 30, 2026, we had $421.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.03 percent.

Previous wording

Dividend payments were $455.4 and $437.5 in 2025 and 2024, respectively, and dividends declared per share were $4.32 and $4.24 in 2025 and 2024, respectively. The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.

Current wording

Dividend payments were $464.7 and $455.4 in 2026 and 2025, respectively, and dividends declared per share were $4.40 and $4.32 in 2026 and 2025, respectively. The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.

Previous wording

Absent any material acquisitions, apart from the recent acquisition of Hostess Brands, or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under our revolving credit facility and commercial paper program, and access to capital markets, will be sufficient to meet our cash requirements for the next 12 months, including the payment of quarterly dividends, principal and interest payments on debt outstanding, and capital expenditures. However, as a result of the current macroeconomic environment and the recent acquisition, we may experience an increase in the cost or the difficulty to obtain debt or equity financing, or to refinance our debt in the future.

Current wording

Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under our revolving credit facility and commercial paper program, and access to capital markets, will be sufficient to meet our cash requirements for the next 12 months, including the payment of quarterly dividends, principal and interest payments on debt outstanding, and capital expenditures. However, as a result of the current macroeconomic environment, we may experience an increase in the cost or the difficulty to obtain debt or equity financing, or to refinance our debt in the future. We continue to evaluate these risks, which could affect our financial condition or our ability to fund operations or future investment opportunities.

Previous wording

As of April 30, 2025, total cash and cash equivalents of $56.2 was held by our foreign subsidiaries, primarily in Canada. During 2025, we returned $35.0 of foreign cash to the U.S. from Canada, reflecting intercompany debt repayments, and as a result, there were no tax impacts. There was no other foreign cash repatriated to the U.S. during 2025.

Current wording

As of April 30, 2026, total cash and cash equivalents of $48.6 was held by our foreign subsidiaries, primarily in Canada. During 2026, we returned $42.1 of foreign cash to the U.S. from Canada, which was subject to $2.1 of foreign withholding taxes, while U.S. federal and state income taxes were not significant. There was no other foreign cash repatriated to the U.S. during 2026.

Previous wording

(B)Interest payments consist of the interest payments for our fixed-rate Senior Notes.

Current wording

(B)Interest payments consists of the interest payments for our fixed-rate Senior Notes and Term Loan.

Previous wording

Our other cash requirements at April 30, 2025, primarily included operating and finance lease obligations, which consist of the minimum rental commitments under non-cancelable operating and finance leases. As of April 30, 2025, we had total undiscounted minimum lease payments of $142.1 and $13.8 related to our operating and finance leases, respectively. For additional information, see Note 12: Leases.

Current wording

Our other cash requirements at April 30, 2026, primarily included operating and finance lease obligations, which consist of the minimum rental commitments under non-cancelable operating and finance leases. As of April 30, 2026, we had total undiscounted minimum lease payments of $181.3 and $11.3 related to our operating and finance leases, respectively. For additional information, see Note 12: Leases.

Previous wording

In addition, we have other liabilities which consisted primarily of projected commitments associated with our defined benefit pension and other postretirement benefit plans, as disclosed in Note 9: Pensions and Other Postretirement Benefits. The total liability for our unrecognized tax benefits and tax-related net interest at April 30, 2025, was $3.1 under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes; however, we are unable to reasonably estimate the timing of cash settlements with the respective taxing authorities. For additional information, see Note 14: Income Taxes.

Current wording

In addition, we have other liabilities consisting primarily of projected commitments associated with our defined benefit pension and other postretirement benefit plans, as disclosed in Note 9: Pensions and Other Postretirement Benefits. The total liability for our unrecognized tax benefits and tax-related net interest at April 30, 2026, was $1.8 under FASB ASC 740, Income Taxes; however, we are unable to reasonably estimate the timing of cash settlements with the respective taxing authorities. For additional information, see Note 14: Income Taxes.