What changed in this filing

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Item 1A. Risk Factors

2026-02-13 compared with 2025-02-14 · 65 added, 56 removed, 332 unchanged (27% of the section changed)

22 unchanged sentences

The Company’s sales are dependent on purchases by several large customers and any significant decline in these purchases or pressure from these customers to reduce prices could have a negative effect on the Company’s future financial performance.

Although the Company has long-established relationships with many customers, the Company generally does not have any long-term supply or binding contracts or guarantees of minimum purchases with its largest customers.

Although the Company has long-established relationships with many customers, the Company generally does not have long-term supply or binding contracts or guarantees of minimum purchases with its largest customers.

Purchase commitments by these customers are generally made using individual purchase orders.

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The Company also faces the risk that its competitors will introduce innovative new products that compete with the Company’s products.

In addition, sales generated by new products or line extensions could cause a decline in sales of the Company’s existing products.

In addition, sales generated by new

products or line extensions could cause a decline in sales of the Company’s existing products.

If new product development and commercialization efforts are not successful, the Company’s financial results could be adversely affected.

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There can be no assurance that investments in e-commerce and omni-channel infrastructure and technology will result in increased sales through e-commerce or otherwise.

The Company’s plans to execute its turnaround plan and restructuring initiatives, improve productivity, reduce complexity and costs may not be successful, which would materially adversely affect its financial results.

The Company’s plans to execute its turnaround plan and restructuring initiatives, improve productivity and reduce complexity and costs may not be successful, which would materially adversely affect its financial results.

The Company is executing a turnaround plan to build a global, next generation consumer products company that can unleash the full potential of its brands in a fast-moving omni-channel environment.

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The Company may use artificial intelligence in its business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and could adversely affect the Company’s business.

The Company’s use of artificial intelligence (“AI”) tools in its operations and systems poses inherent risk and could adversely affect the Company’s operations and financial conditions.

The Company’s use of AI tools in its operations and systems poses inherent risk and could adversely affect the Company’s operations and financial conditions.

The Company’s success may increasingly become dependent on its ability to effectively leverage AI to support its operational efficiencies, such as in supply chain and support functions, and its product development and marketing capabilities.

The Company may be outpaced by its competitors in their more successful or earlier adoption of AI solutions, which could negatively affect the Company’s commercial competitiveness.

Use of AI exposes the Company to risks that such AI solutions may be deficient, produce inaccurate or misleading output, become inoperable or subject the Company to cybersecurity and data privacy breaches, all of which could lead to operational disruptions, flawed decision-making, increased costs, and an inhibited ability to improve product development and marketing through the use of AI, and could

impact the Company’s operational effectiveness and financial condition.

Additionally, the use of certain AI solutions could put the Company’s own information and intellectual property rights at risk or expose the Company to risk of infringing third parties’ intellectual property or other rights.

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The Company cannot guarantee that its security efforts will prevent attacks and resulting breaches or breakdowns of the Company’s, or its third-party service providers’ databases or systems notwithstanding whether the Company takes reasonable steps to prevent such attacks.

The Company’s operations, especially its retail operations, involve the storage and transmission of employees’, customers’ and consumers’ personal and sensitive information, such as credit card and bank account numbers.

The Company’s operations, especially its retail operations and employee benefits administration, involve the storage and transmission of employees’, customers’ and consumers’ personal and sensitive information, such as credit card and bank account numbers.

The Company’s payment services may be subject to credit card and other payment fraud schemes, including unauthorized use of credit cards, debit cards or bank account information, identity theft or merchant fraud.

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In addition, if the Company’s service providers, suppliers or customers experience a breach or unauthorized disclosure or system failure, their businesses could be disrupted or otherwise negatively affected, which may result in a disruption in the Company’s supply chain or reduced customer orders or other business operations, which could adversely affect the Company.

The Company may face particular data protection and privacy risks in connection with the European Union’s Global Data Protection Regulation, the California Consumer Privacy Act and other privacy laws and regulations.

The Company may face particular data protection and privacy risks in connection with privacy laws and regulations globally.

The Company is subject to laws of various jurisdictions where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor, investor, employee or other stakeholder information and personal data, including but, not limited to, the General Data Protection Regulation of the European Union, the California Consumer Privacy Act, and various other privacy laws and regulations.

The Company may be subject to additional regulations, such as the

European Union AI Act, that specifically affect the use of personal information in the context of AI systems.

The Company may be subject to additional regulations, such as the European Union AI Act, that specifically affect the use of personal information in the context of AI systems.

The changes introduced by these laws and regulations increase the complexity of regulations enacted to protect business and personal data, subject the Company to additional costs and have required, and may in the future require, costly changes to the Company’s security systems, policies, procedures and practices.

These laws and regulations may grant, among other things, individual rights to access and delete personal information, and the right to opt out of the sale of personal information.

These laws and regulations may grant, among other things, individual rights to access and delete personal information and the right to opt out of the sale of personal information, causing the Company to incur costs and operational inefficiencies.

These laws and regulations can also impose significant forfeitures and penalties for noncompliance and afford private rights of action to individuals under certain circumstances.

Any failure to manage data privacy in compliance with applicable laws and regulations could result in significant regulatory investigations, fines, and sanctions, consumer and class action litigation, commercial litigation, prolonged negative publicity, data breaches, declining customer confidence, loss of key customers, employee liability, and other unfavorable consequences.

The Company’s operating results can be adversely affected by inflation, changes in the cost or availability of raw materials, labor, energy, transportation and other necessary supplies and services, as well as the impact of tariffs.

The Company’s success is dependent, in part, on its continued ability to reduce its exposure to or mitigate the impact of increases in the cost of raw materials, finished goods, energy, transportation and other necessary supplies and services through a variety of programs, including periodic purchases, future delivery purchases, long-term contracts, sales price adjustments and certain derivative instruments, while maintaining and improving margins and market share.

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Pricing and availability of finished goods, raw materials, energy, transportation and other necessary supplies and services for use in the Company’s businesses can be volatile due to numerous factors beyond its control, including general, domestic and international economic conditions, natural disasters, labor costs, production levels, competition, consumer demand, import duties and tariffs, currency exchange rates, international treaties, and changes in laws, regulations, and related interpretations.

Specifically, evolving trade policies could continue to make sourcing products from foreign countries difficult and costly, as the Company sources a significant amount of its products from outside of the U.S.

For example, in early 2025, the current U.S.

presidential administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico and Canada, all of which were subsequently postponed prior to becoming effective, and China, and has proposed additional new tariffs that may be implemented in the future.

Given the Company’s reliance upon non-domestic suppliers, any significant changes to the U.S.

trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on its ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.

The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S.

Any new or additional tariffs on goods imported to the U.S.

from China, Mexico, Canada, or other countries, or products imported into the European Union or other non-U.S.

markets, could also increase the cost of some of our products and reduce our margins.

The Company’s operations and financial condition can be adversely impacted by global macroeconomic environment, including the impact of tariffs imposed by the U.S.

and retaliatory tariffs imposed by other countries.

Evolving trade policies could continue to make sourcing products from foreign countries more difficult and costly, as the Company sources a significant amount of its products from outside of the U.S.

In 2025, the current U.S.

presidential administration announced and/or imposed a series of new tariffs on foreign imports into the U.S., including without limitation significant tariffs on products manufactured in China.

Tariffs on imports into the U.S., most significantly from China, and retaliatory tariffs on exports from the U.S.

to other countries, have increased costs for the Company and could impact the level of trade between the U.S.

and its various trading partners around the globe in general.

The Company continues to deploy a mitigation strategy designed to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing.

However, the rate or duration of these tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S.

and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets, and there can be no assurance as to the extent to which the Company will be able to offset the impact through mitigation actions.

Given the Company’s reliance upon non-domestic suppliers, new or additional tariffs on goods imported to the U.S.

from China, Mexico or other countries, or products imported into the European Union or other non-U.S.

markets, or other significant changes to the U.S.

trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on the Company’s ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.

Unfavorable shifts in industry-wide demand for the Company’s products could result in inventory valuation risk.

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If inventories on hand are in excess of demand or slow moving, appropriate write-downs may be recorded.

In addition, the Company writes off inventories that are considered obsolete based upon changes in customer demand, product design changes including those required by new product regulation, that result in existing inventory obsolescence, or new product

introductions, which eliminate demand for existing products.

In addition, the Company writes off inventories that are considered obsolete based upon changes in customer demand, product design changes including those required by new product regulation,

that result in existing inventory obsolescence, or new product introductions, which eliminate demand for existing products.

Remaining inventory balances are adjusted to approximate net realizable market value.

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The Company cannot be certain that obsolete or excess inventories, which may result from unanticipated changes in the estimated total demand for its products, will not affect it beyond the inventory charges that have already been recorded.

The Company may not be able to attract, retain and develop key talent.

The Company’s ability to successfully execute its turnaround plan and its future performance depends in significant part upon the continued service of its executive officers and other key leaders.

The loss of the services of one or more executive officers or other key employees could have a material adverse effect on the Company’s business, prospects, financial condition and results of operations.

The Company’s success also depends, in part, on its continuing ability to attract, retain and develop highly qualified talent deeper in the organization.

Global competition for talent is intense and has increased in recent years amidst emerging labor trends, including but not limited to expanded remote work options.

There can be no assurance that the Company can attract, engage or retain its key employees or highly qualified talent in the future.

The Company’s ability to attract, retain and develop critical talent, including readiness for emerging technologies such as AI, is essential to executing its strategic objectives and sustaining long-term performance.

The Company’s success depends significantly on the continued contributions of executive leadership and other key personnel.

The loss of the services of one or more of these individuals could materially and adversely affect the Company’s business, financial condition, and operating results.

Additionally, maintaining a pipeline of highly skilled talent across all levels of the organization is critical as global competition intensifies and workforce expectations evolve, including remote work flexibility and technology-driven roles.

Failure to attract, retain, or upskill employees—particularly in areas requiring AI proficiency, could impair our ability to innovate, adapt to market changes, and achieve operational goals.

Damage to the Company’s reputation or loss of consumer confidence could have an adverse effect on the Company’s business .

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As a result, consumers of our brands could confuse our products with these counterfeit products, which could cause them to refrain from purchasing our brands in the future and in turn could impair our brand equity.

Finally, there has been an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters.

From time to time, the Company announces certain initiatives regarding its focus areas, which may include environmental matters, human capital, sustainability, packaging, responsible sourcing and social investments.

In 2024, the Company published its Corporate Citizenship Report which included updates on many of these focus areas and goals for certain areas.

Finally, there has been an increased focus from certain investors, customers, consumers, employees, and other stakeholders, as well as legislative bodies and regulatory agencies, concerning corporate citizenship and sustainability matters.

From time to time, the Company announces certain initiatives regarding its focus areas, some of which may be required in accordance with applicable laws, and which may include environmental matters, human capital, sustainability, packaging, responsible sourcing and social investments.

The Company could fail, or be perceived to fail, in its achievement of such initiatives and goals or it could fail in accurately reporting its progress on such initiatives and goals.

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The Company has substantial indebtedness, which could materially and adversely affect the Company and its financial position, including decreasing its business flexibility, impacting its ratings and increasing its borrowing costs.

At December 31, 2024, the Company had $4.6 billion in outstanding debt, reflecting a decrease of approximately $300 million versus December 31, 2023.

At December 31, 2025, the Company had $4.67 billion in outstanding debt, reflecting an increase of approximately $100 million versus December 31, 2024.

The Company’s substantial indebtedness has, and could continue to have, important consequences for the Company, including:

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• requiring the Company to comply with financial and non-financial covenants in its debt documents that may place restrictions on business activities and, if breached, subject the Company to cross-default and acceleration provisions.

In addition, if the Company is unable to timely reduce its level of indebtedness, the Company will be subject to increased demands on its cash resources, which could decrease its collateral coverage ratios, increase its leverage ratios, lower its credit ratings, result in a breach of covenants or otherwise adversely affect the business and financial results of the Company going forward.

If the Company is unable to timely reduce its level of indebtedness, the Company will be subject to increased demands on its cash resources, which could decrease its collateral coverage ratios, increase its leverage ratios, lower its credit ratings, result in a breach of covenants or otherwise adversely affect the business and financial results of the Company going forward.

The Company is a party to a $1.00 billion credit revolver maturing in August 2027 (the “Credit Revolver”), which requires compliance with certain financial covenants (as more fully described in Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations ).

The failure of the Company to achieve anticipated financial results at any point during the term of the Credit Revolver, due to an economic downturn or otherwise, could result in a failure to satisfy one of more financial covenants under the Credit Revolver.

The Company’s ability to continue to comply with these financial covenants is dependent upon the Company’s future operating and financial performance, which may be affected by economic conditions and other factors beyond our control.

A failure to maintain the Company’s financial covenants and to subsequently remedy a default would impair our ability to borrow under the Credit Revolver and, absent a waiver of such default by the lenders under the Credit Revolver or an amendment or replacement of the Credit Revolver with alternative financing, potentially subject the Company to cross-default and acceleration provisions in its debt documents, which would have a significant adverse effect on the Company’s business, financial condition and operating results.

While the majority of the Company’s debt is fixed, fluctuations in interest rates can increase borrowing costs on the portion that is variable, and interest rate increases on this portion of the Company’s debt could have a material adverse effect on the Company’s business.

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The credit ratings assigned to the Company also impact the interest rates paid on short- and long-term financing.

For example, the Company’s credit ratings were downgraded in both 2024 and 2023 by each of Moody’s Corporation and S&P Global Inc.

which resulted in a coupon step-up of certain of the Company’s outstanding senior notes.

In addition, credit ratings can also affect the terms of debt agreements to include more restrictive covenants which may further restrict our business operations or limit our ability to raise additional capital due to our covenant restrictions then in effect.

For example, in November 2024, the Company issued $750 million of aggregate principal amount of 6.375% senior notes due 2030 and $500 million of aggregate principal amount of 6.625% senior notes due 2032, and such notes contain covenants that are more restrictive than the senior notes that the Company has historically issued.

For example, the Company’s credit ratings were downgraded in both 2025 and 2024 by each of Moody’s Corporation (“Moody’s”) and S&P Global Inc.

(“S&P”) which resulted in a coupon step-up of certain of the Company’s outstanding senior notes.

In addition, credit ratings can also affect the terms of debt agreements to include more restrictive

covenants which may further restrict our business operations or limit our ability to raise additional capital due to our covenant restrictions then in effect.

For example, in November 2024, the Company issued $750 million of aggregate principal amount of 6.375% senior notes due 2030 and $500 million of aggregate principal amount of 6.625% senior notes due 2032, and in May 2025, the Company completed the offering and sale of $1.25 billion of 8.500% senior notes due 2028 (collectively the “Notes”).

These Notes include covenants that limit the ability of the Company and its subsidiaries to incur or guarantee additional debt, create or permit certain liens, redeem or repurchase certain debt, consummate certain asset sales, make certain loans and investments, consolidate, merge or sell all or substantially all of the Company and its subsidiaries assets, enter into certain transactions with affiliates and pay distributions on, or redeem or repurchase the Company’s capital stock, subject in each case to certain qualifications and exceptions, including the termination of certain of these covenants upon the Notes receiving investment grade credit ratings.

There is no guarantee that debt or equity financings will be available in the future to fund future acquisitions, developments, or general operating expenses, or that such financing will be available on terms consistent with our historical agreements or expectations.

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The Company is required by the SEC to establish and maintain effective internal control over financial reporting that provides reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements in accordance with U.S.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent

limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

generally accepted accounting principles (“GAAP”).

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.

Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

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During the years ended December 31, 2025, 2024 and 2023, the Company recorded non-cash impairment charges related to goodwill and indefinite-lived intangibles of $340 million, $345 million and $339 million, respectively.

Future events or factors may occur that could adversely affect the fair value of the Company’s assets and require impairment charges, including, but not limited to, divestitures of certain businesses or product lines, strategic decisions made in response to changes in economic and competitive conditions, the impact of the economic environment on the Company’s sales and customer base, a material adverse change in the Company’s relationship with significant customers or business partners, or a sustained decline in the Company’s stock price.

In the event any such impairment indicators become known or are present, the Company may be required to perform impairment tests based on changes in the economic environment and other factors, and these tests could result in impairment charges in the future.

As there is minimal difference between the estimated fair values and the carrying values of some of the Company’s intangible assets as a result of recent impairment charges, future impairment charges may occur.

As there is minimal difference between the estimated fair values and the carrying values of some of the Company’s intangible assets as a result of recent non-cash impairment charges, future non-cash impairment charges may occur.

See Critical Accounting Estimates in Item 7 and Footnotes 1 and 6 of the Notes to Consolidated Financial Statements for further discussion.

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For example, in 2023, the Company entered into a settlement with the SEC, which concluded an investigation primarily relating to the Company’s sales practices and certain accounting matters between the third quarter of fiscal year 2016 and second quarter of fiscal year 2017.

Under the terms of the settlement, the Company neither admitted nor denied the SEC’s findings and agreed to pay a civil penalty of approximately $13 million.

Under the terms of the settlement,

the Company neither admitted nor denied the SEC’s findings and agreed to pay a civil penalty of approximately $13 million.

Responding to governmental investigations, voluntary document requests, subpoenas or actions by regulatory bodies is time-consuming, expensive and disruptive to the Company’s operations and could divert the attention of management and key personnel from the Company’s business operations.

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Changes in laws, regulations and related interpretations may alter the environment in which the Company does business.

This includes changes in environmental, data privacy, competitive and product-related laws, as well as changes in accounting standards, taxation and other regulations.

This includes changes in environmental, data privacy, competition and product-related laws, as well as changes in accounting standards, taxation and other regulations.

Accordingly, the Company’s ability to manage regulatory, tax and legal matters (including environmental, human resource, product liability, patent and other intellectual property matters), and to resolve pending legal and environmental matters without significant liability could require the Company to record significant reserves in excess of amounts accrued to date or pay significant fines during a reporting period, which could materially impact the Company’s results.

In addition, new regulations may be enacted in the U.S.

or abroad that may require the Company to incur additional personnel-related, environmental or other costs on an ongoing basis, significantly restrict the Company’s ability to sell certain products, or incur fines or penalties for noncompliance, any of which could adversely affect the Company’s results of operations.

As a U.S.-based multinational company, the Company is also subject to tax regulations in the U.S.

or abroad that may introduce compliance uncertainty and may require the Company to incur additional personnel-related, environmental or other costs on an ongoing basis, significantly restrict the Company’s ability to sell certain products, or incur fines or penalties for noncompliance, any of which could adversely affect the Company’s results of operations.

As a U.S.-based multi-national company, the Company is also subject to tax regulations in the U.S.

and multiple foreign jurisdictions, some of which are interdependent.

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will enact legislation to adopt Pillar Two, many countries in which we operate have adopted the legislation, and other countries are in the process of introducing legislation to implement Pillar Two.

The Company’s

current income tax impact of Pillar Two is immaterial, however we will continue to monitor both U.S.

and international legislative developments to assess for any potential impacts.

On June 18, 2019, the U.S.

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Although the Company believes its tax estimates are reasonable, the final outcome of tax audits and related litigation could be materially different than that reflected in its historical income tax provisions and accruals.

There can be no assurance that the resolution of any audits or litigation will not have an adverse effect on future operating results.

There can be no assurance that the resolution of any audits

or litigation will not have an adverse effect on future operating results.

See Footnote 11 of the Notes to the Consolidated Financial Statements for further information.

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When the Company is required to remove, or voluntarily removes, its products from the market, the Company might have large quantities of finished products that it is unable to sell.

Company also faces exposure to product liability claims if one of its products is alleged to have resulted in property damage, bodily injury or other adverse effects.

The Company also faces exposure to product liability claims if one of its products is alleged to have resulted in property damage, bodily injury or other adverse effects.

In addition to the risk of substantial monetary judgments or fines or penalties that may result from any governmental investigations, product liability claims or regulatory actions could result in negative publicity that could harm the Company’s reputation in the marketplace, adversely impact the value of its end-user brands, or result in an increase in the cost of producing the Company’s products.

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Such class action suits could result in substantial monetary judgments and, injunctions related to the sale of products and could potentially tarnish the Company’s reputation.

Although the Company maintains product liability insurance in amounts that it believes are reasonable, that insurance is, in most cases, subject to significant self-insured retentions for which the Company is responsible, and the Company cannot assure you that it will be able to maintain such insurance on acceptable terms, if at all, in the future or that product liability claims will not exceed the amount of insurance coverage.

Although the Company maintains product liability insurance in amounts that it believes are reasonable, that insurance is, in most cases, subject to significant self-insured retentions for which the Company is responsible, and the Company cannot assure that it will be able to maintain such insurance on acceptable terms, if at all, in the future or that product liability claims will not exceed the amount of insurance coverage.

The Company does not maintain insurance against many types of claims involving alleged product defects other than personal injury or property damage.

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The Company currently either self-insures or administers a high retention insurance program for most product liability risks.

The Company cannot give assurance that its future product liability experience will be consistent with its past experience or that claims and awards subject to self-insured retention will not be material.

The Company cannot give assurance that its future

product liability experience will be consistent with its past experience or that claims and awards subject to self-insured retention will not be material.

See Footnote 17 of the Notes to Consolidated Financial Statements for a further discussion of these and other regulatory and litigation-related matters.

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These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition, and results of operations.

Likewise, a failure to comply with any current or future sustainability-related reporting requirements, as established by regulators in the U.S., Europe and beyond, may result in loss of business, regulatory penalties, litigation, and/or reputational damage.

Likewise, a failure to comply with any current or future sustainability-related

reporting requirements, as established by regulators in the U.S., Europe and beyond, may result in loss of business, regulatory penalties, litigation, and/or reputational damage.

Expectations relating to environmental, social and governance considerations expose the Company to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors