What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-27 compared with 2024-11-26 · 196 added, 152 removed, 265 unchanged (57% of the section changed)

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(Dollars and shares in millions, unless otherwise noted, except per share data)

This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three and six months ended October 31, 2024 and 2023.

This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three and nine months ended January 31, 2025 and 2024.

All comparisons presented are to the corresponding period of the prior year, unless otherwise noted.

On October 22, 2024, we entered into a definitive agreement to sell the Voortman business to Second Nature.

We expect the transaction to close during the third quarter of 2025, subject to customary closing conditions.

The transaction includes products sold under our Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who support the business.

Under our ownership, the Voortman business generated net sales of approximately $65.0 in 2024, which represents a partial year of net sales reported in the Sweet Baked Snacks segment results following the acquisition on November 7, 2023.

On January 31, 2025, we entered into a definitive agreement to sell certain Sweet Baked Snacks value brands to JTM.

We expect the transaction to close during the fourth quarter of 2025.

The transaction includes certain trademarks and licenses, the manufacturing facility in Chicago, Illinois, and approximately 400 employees who support the business.

Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $30.0 in 2024, which represents a partial year of net sales reported in the Sweet Baked Snacks segment results following the acquisition of Hostess Brands on November 7, 2023.

The transaction is valued at approximately $40.0, subject to a working capital adjustment.

As of October 31, 2024, the disposal group met the criteria to be classified as held for sale, and as a result, a valuation allowance was established to reflect the fair value of the disposal group less costs to sell, which was based on the expected proceeds and the estimated carrying value of the net assets to be disposed.

The valuation allowance was included within assets held for sale – net in the Condensed Consolidated Balance Sheet and the estimated pre-tax loss on the disposal group was included within loss (gain) on divestitures – net in the Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

As of January 31, 2025, the disposal group met the criteria to be classified as held for sale, and as a result, a valuation allowance was established to reflect the fair value of the disposal group less costs to sell, which was based on the expected proceeds and the estimated carrying value of the net assets to be disposed.

The valuation allowance was included within assets held for sale – net in the Condensed Consolidated Balance Sheet, and the estimated pre-tax loss on the disposal group of $42.6 was included within loss (gain) on divestitures – net in the Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

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.

Net proceeds from the divestiture were $290.5, net of a preliminary working capital adjustment and cash transaction costs.

During the second quarter of 2025, the disposal group met the criteria to be classified as held for sale, and as a result, an estimated pre-tax loss of $260.8 was recognized within loss (gain) on divestitures – net in the Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

Upon close of the transaction during the third quarter of 2025, the pre-tax loss was adjusted to $268.4, reflecting the fair value of the disposal group as of the transaction date.

On January 2, 2024, we sold the Canada condiment business to TreeHouse Foods.

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The valuation allowance was included within loss (gain) on divestitures – net in the Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

Upon close of the transaction during the third quarter of 2024, the pre-tax loss was adjusted to $5.7, reflecting the fair value of the disposal group as of the transaction date.

On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands.

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New debt of $5.0 billion was borrowed, consisting of $3.5 billion in Senior Notes, an $800.0 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 brand.

Hostess Brands is a manufacturer and marketer of sweet baked goods brands and included Hostess Donettes , Twinkies , CupCakes , DingDongs , Zingers , CoffeeCakes , HoHos , Mini Muffins , and Fruit Pies , and the Voortman brand at the acquisition date.

In addition to its headquarters in Lenexa, Kansas, the transaction included six manufacturing facilities located in Emporia, Kansas;

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Columbus, Georgia;

Indianapolis, Indiana;

Indianapolis, Indi ana;

and Arkadelphia, Arkansas, a distribution facility in Edgerton, Kansas, and a commercial center of excellence in Chicago, Illinois.

During the first half of 2025, the acquired business contributed net sales of $649.2.

During the first nine months of 2025, the acquired business contributed net sales of $927.8.

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 $42.0, of which approximately $31.0 was achieved during the first half of 2025.

To date, we have achieved cost synergies of approximately $64.0, of which approximately $53.0 was achieved during the first nine months of 2025.

On November 1, 2023, we sold the Sahale Snacks business to Second Nature.

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The valuation allowance was included within loss (gain) on divestitures – net in the Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

Upon close of the transaction during the third quarter of 2024, the pre-tax loss was adjusted to $6.7, reflecting the fair value of the disposal group as of the transaction date.

On April 28, 2023, we sold certain pet food brands to Post.

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We recognized a pre-tax loss of $1.0 billion upon completion of this transaction in 2023.

During the first half of 2024, we finalized the working capital adjustment and transaction costs, which resulted in an immaterial adjustment to the pre-tax loss.

During the first half of 2024, we finalized the working capital adjustment and transaction costs, which resulted in an immaterial adjustment to the pre-

Furthermore, during the first quarter of 2024, we entered into equity forward derivative transactions under an agreement with an unrelated third-party to facilitate the forward sale of the Post common stock.

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Trends Affecting our Business

During the first half of 2025, we continued to experience input cost inflation and a dynamic macroeconomic environment, which we anticipate will persist through the remainder of 2025.

Further, the higher costs may require price increases across our business, and we anticipate the price elasticity of demand will remain elevated during 2025 as consumers continue to experience broader inflationary pressures.

During the first nine months of 2025, we continued to experience input cost inflation and a dynamic macroeconomic environment, which we anticipate will persist through the remainder of 2025.

Further, the higher costs have required price increases across our business, and we anticipate the price elasticity of demand will remain elevated during 2025 as consumers continue to experience broader inflationary pressures.

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.

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.

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.

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Results of Operations

Three Months Ended October 31, Six Months Ended October 31,

Three Months Ended January 31, Nine Months Ended January 31,

2025 2024 % Increase (Decrease) 2025 2024 % Increase (Decrease)

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% of net sales 40.2 % 36.9 % 38.9 % 36.9 %

Operating income $ 169.7 $ 298.9 (43) $ 519.2 $ 602.4 (14)

Operating income (loss) $ (594.0) $ 297.4 n/m $ (74.8) $ 899.8 (108)

% of net sales (27.2) % 13.3 % (1.1) % 15.1 %

Net income (loss):

Net income (loss) $ (24.5) $ 194.9 (113) $ 160.5 $ 378.5 (58)

Net income (loss) per common share – assuming dilution $ (0.23) $ 1.90 (112) $ 1.51 $ 3.69 (59)

Net income (loss) $ (662.3) $ 120.4 n/m $ (501.8) $ 498.9 n/m

Net income (loss) per common share – assuming dilution $ (6.22) $ 1.13 n/m $ (4.72) $ 4.81 n/m

Adjusted gross profit (A)

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Refer to “Non-GAAP Financial Measures” in this discussion and analysis for a reconciliation to the comparable GAAP financial measure.

Three Months Ended October 31, Six Months Ended October 31,

Three Months Ended January 31, Nine Months Ended January 31,

2025 2024 Increase

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Hostess Brands acquisition (20.1) — (20.1) (1) (669.3) — (669.3) (11)

Voortman divestiture

— (20.2) 20.2 1 — 0 (20.2) 20.2 —

Canada condiment divestiture — (10.4) 10.4 — — (43.8) 43.8 1

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This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.

Net sales in the second quarter of 2025 increased $332.6, or 17 percent, which includes incremental net sales in the current year of $315.5 related to the Hostess Brands acquisition, partially offset by $28.9 of noncomparable net sales in the prior year related to divestitures.

Net sales excluding acquisition, divestitures, and foreign currency exchange increased $46.5, or 2 percent.

Favorable volume/mix contributed 2 percentage points to net sales, primarily driven by increases for the Uncrustables , Meow Mix , Café Bustelo , and Jif brands, partially offset by lower contract manufacturing sales related to the divested pet food brands and a decrease for the Dunkin’ brand.

Net price realization contributed 1 percentage point to net sales, primarily reflecting higher net pricing for the Folgers brand, partially offset by lower net pricing for the Meow Mix brand.

Net sales in the first six months of 2025 increased $652.5, or 17 percent, which includes incremental net sales in the current year of $649.2 related to the Hostess Brands acquisition, partially offset by $57.5 of noncomparable net sales in the prior year related to divestitures.

Net sales in the third quarter of 2025 decreased $43.2, or 2 percent, which includes incremental net sales in the current year of $20.1 related to the Hostess Brands acquisition, partially offset by $30.6 of noncomparable net sales in the prior year related to divestitures.

Net sales excluding acquisition, divestitures, and foreign currency exchange decreased $28.5, or 1 percent.

Volume/mix decreased net sales by 5 percentage points, primarily driven by decreases for coffee, dog snacks, and lower contract manufacturing sales related to the divested pet food brands, partially offset by an increase for Uncrustables sandwiches.

Net price realization contributed 3 percentage points to net sales, primarily reflecting higher net pricing for coffee.

Net sales in the first nine months of 2025 increased $609.3, or 10 percent, which includes incremental net sales in the current year of $669.3 related to the Hostess Brands acquisition, partially offset by $88.1 of noncomparable net sales in the prior year related to divestitures.

Net sales excluding acquisition, divestitures, and foreign currency exchange increased $34.9, or 1 percent.

Favorable volume/mix contributed 1 percentage point to net sales, primarily driven by increases for the Uncrustables , Meow Mix , and Café Bustelo brands, partially offset by lower contract manufacturing sales related to the divested pet food brands and a decrease for the Dunkin’ brand.

Net price realization was neutral to net sales, as higher net pricing for the Folgers , Jif , and Café Bustelo brands was mostly offset by lower net pricing for the Meow Mix , Dunkin’ , and Milk-Bone brands.

Operating Income

The following table presents the components of operating income as a percentage of net sales.

Three Months Ended October 31, Six Months Ended October 31,

Net price realization contributed 1 percentage point to net sales, reflecting higher net pricing for coffee, partially offset by lower net pricing for cat food and dog snacks.

Volume/mix decreased net sales by 1 percentage point, primarily driven by lower contract manufacturing sales related to the divested pet food brands and decreases for coffee and dog snacks, partially offset by an increase for Uncrustables sandwiches.

Operating Income (Loss)

The following table presents the components of operating income (loss) as a percentage of net sales.

Three Months Ended January 31, Nine Months Ended January 31,

2025 2024 2025 2024

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Amortization 2.5 2.5 2.5 2.3

Goodwill impairment charge 36.3 — 12.1 —

Other intangible assets impairment charge 9.5 — 3.2 —

Other special project costs 0.5 4.4 0.4 1.8

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Other operating expense (income) – net (0.6) (0.1) (0.3) 0.5

Operating income 7.5 % 15.4 % 11.8 % 16.1 %

Operating income (loss) (27.2) % 13.3 % (1.1) % 15.1 %

Amounts may not add due to rounding.

Gross profit increased $161.9, or 22 percent, in the second quarter of 2025, primarily reflecting the noncomparable benefit of Hostess Brands, favorable volume/mix, higher net price realization, and lower costs, partially offset by the noncomparable impact of divestitures.

Operating income decreased $129.2, or 43 percent, primarily driven by the $260.8 pre-tax loss on the Voortman business disposal group classified as held for sale, a $57.2 increase in selling, distribution, and administrative (“SD&A”) expenses, and a $16.2 increase in amortization expense, mostly attributable to the addition of Hostess Brands.

These unfavorable impacts were partially offset by the increase in gross profit and lapping a $39.1 charge in the prior year related to the termination of a supplier agreement.

Gross profit increased $55.0, or 7 percent, in the third quarter of 2025, primarily reflecting higher net price realization, lower costs, and the noncomparable benefit of Hostess Brands, partially offset by unfavorable volume/mix and the noncomparable impact of divestitures.

Operating income (loss) decreased $891.4, primarily reflecting noncash impairment charges of $794.3 and $208.2 related to the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, respectively, and the $50.2 net pre-tax loss on divestitures, reflecting the $42.6 pre-tax loss on the disposal group of certain Sweet Baked Snacks value brands classified as held for sale and a $7.6 adjustment to the Voortman brand disposal group.

These impacts were partially offset by an $88.8 decrease in other special project costs, primarily related to integration costs associated with the acquisition of Hostess Brands, and the increase in gross profit.

Our non-GAAP financial measures are adjusted to exclude 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 $129.2, or 17 percent, as compared to the prior year, primarily reflecting an unfavorable impact of the exclusion of a $38.0 change in net cumulative unallocated derivative gains and losses, as compared to GAAP gross profit.

Operating income excluding non-GAAP adjustments (“adjusted operating income”) increased $105.2, or 27 percent, as compared to the prior year, further reflecting the exclusion of the $260.8 pre-tax loss for the assets held for sale, amortization expense, and other special project costs.

Gross profit increased $304.3, or 22 percent, in the first six months of 2025, primarily reflecting the noncomparable benefit of Hostess Brands, favorable volume/mix, higher net price realization, and lower costs, partially offset by the noncomparable impact of divestitures.

Operating income decreased $83.2, or 14 percent, primarily driven by the $260.8 pre-tax loss on the Voortman business disposal group classified as held for sale, a $133.7 increase in SD&A expenses, a $32.4 increase in amortization expense, mostly attributable to the addition of Hostess Brands, and an $11.0 increase in special project costs primarily related to integration costs associated with the acquisition of Hostess Brands.

These unfavorable impacts were partially offset by the increase in gross profit and lapping the $39.1 charge in the prior year related to the termination of a supplier agreement.

Adjusted gross profit increased $317.3, or 23 percent, as compared to the prior year, reflecting the exclusion of special project costs and the change in net cumulative unallocated derivative gains and losses, as compared to GAAP gross profit.

Adjusted operating income increased $221.4, or 31 percent, as compared to the prior year, further reflecting the exclusion of the $260.8 pre-tax loss for the assets held for sale, amortization expense, and other special project costs.

Gross profit excluding non-GAAP adjustments (“adjusted gross profit”) decreased $9.1, or 1 percent, as compared to the prior year, primarily reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses as compared to GAAP gross profit.

Operating income (loss) excluding non-GAAP adjustments (“adjusted operating income”) increased $6.3, or 1 percent, as compared to the prior year, further reflecting the exclusion of the noncash impairment charges of $1.0 billion associated with the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, the $50.2 net pre-tax loss on divestitures, and other special project costs.

Gross profit increased $359.3, or 16 percent, in the first nine months of 2025, primarily reflecting the noncomparable benefit of Hostess Brands, higher net price realization, lower costs, and favorable volume/mix, partially offset by the noncomparable impact of divestitures.

Operating income (loss) decreased $974.6, or 108 percent, primarily reflecting noncash impairment charges of $794.3 and $208.2 related to the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, respectively, the $311.0 net pre-tax loss on divestitures, reflecting the $42.6 pre-tax loss on the disposal group of certain Sweet Baked Snacks value brands classified as held for sale and the $268.4 pre-tax loss on the divested Voortman business, and a $127.1 increase in selling, distribution, and administrative (“SD&A”) expenses.

These impacts were partially offset by the increase in gross profit, a $77.8 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.

Adjusted gross profit increased $308.2, or 14 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 increased $227.7, or 19 percent, as compared to the prior year, further reflecting the exclusion of the noncash impairment charges of $1.0 billion associated with the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, the $311.0 net pre-tax loss on divestitures, and other special project costs.

Interest Expense

Net interest expense increased $63.6 and $131.9 in the second quarter and first six months of 2025, respectively, primarily due to increased interest expense related to the new Senior Notes issued during 2024 to partially finance the acquisition of Hostess Brands.

Net interest expense decreased $4.4 during the third quarter of 2025, primarily reflecting a decrease in interest expense related to the Term Loan that was prepaid in full during the fourth quarter of 2024.

Net interest expense increased $127.5 during the first nine months of 2025, primarily due to increased interest expense related to the new Senior Notes issued during 2024 to partially finance the acquisition of Hostess Brands.

For additional information, refer to Note 9:

Debt and Financing Arrangements.

The effective income tax rates for the three months ended October 31, 2024 and 2023, were 136.7 and 21.9 percent, respectively, and for the six months ended October 31, 2024 and 2023, were 48.7 and 22.4 percent, respectively.

The increase in the effective income tax rates, as compared to the prior year, was primarily due to an unfavorable permanent tax impact and the recognition of a taxable outside basis difference reflecting the reversal of our indefinite reinvestment assertion on the Voortman Cookies Limited entity, both associated with the classification of the Voortman business as held for sale during the second quarter of 2025.

During the three and six months ended October 31, 2024, the effective income tax rate varied from the U.S.

statutory income tax rate of 21.0 percent primarily due to the unfavorable impacts of the classification of the Voortman business as held for sale.

During the three and six months ended October 31, 2023, the effective income tax rate varied from the U.S.

statutory income tax rate of 21.0 percent primarily due to state income taxes, partially offset by the recognition of a deductible outside basis difference related to the divestiture of the Sahale Snacks brand, which was classified as held for sale as of October 31, 2023.

We anticipate a full-year effective income tax rate for 2025 of approximately 34.0 percent.

Income taxes decreased $75.3, or 100 percent, during the three months ended January 31, 2025, as compared to the prior year.

The effective income tax rate for the third quarter of 2025 varied from the U.S.

statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit, partially offset by the reversal of the deferred tax liability upon completion of the sale of the Voortman Cookies Limited entity, and a favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.

The effective income tax rate for the third quarter of 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.

Income taxes decreased $32.3, or 18 percent, during the nine months ended January 31, 2025, as compared to the prior year.

The effective income tax rate for the first nine months of 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 charge for the Sweet Baked Snacks reporting unit and the sale of the Voortman business, partially offset by the favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.

The effective income tax rate for the first nine months of 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.

For additional information, refer to Note 4:

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Total divestiture costs incurred to date related to the divested Sahale Snacks and Canada condiment businesses were $7.2, which included $4.3 and $2.9 of employee-related and other transition and termination costs, respectively, all of which were cash charges.

We incurred divestiture costs of $0.1 and $0.4 during the three and six months ended October 31, 2024, respectively, primarily consisting of employee-related costs.

As of October 31, 2024, we have incurred the majority of the anticipated costs related to these divestitures and expect costs incurred during the second half of 2025 to be minimal.

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of the divestiture of certain pet food brands.

We incurred divestiture costs of $1.3 and $1.7 during the three and nine months ended January 31, 2025, respectively, primarily consisting of employee-related costs.

As of January 31, 2025, we have incurred the majority of the anticipated costs related to these divestitures and expect minimal costs to be incurred during the remainder of 2025.

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of the recent 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, with approximately half of the costs expected to be recognized in 2025.

We have recognized total cumulative costs of $0.9, of which $0.8 and $0.9 were recognized during the three and six months ended October 31, 2024, respectively.

We have recognized total cumulative costs of $3.1, of which $2.1 and $3.0 were recognized during the three and nine months ended January 31, 2025, respectively, primarily consisting of other transition and termination costs.

Integration Costs :

Total integration costs related to the acquisition of Hostess Brands are anticipated to be approximately $210.0 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 $182.3, of which $7.8 and $34.9 were recognized during the three and nine months ended January 31, 2025, respectively.

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.

We have recognized total cumulative integration costs of $174.5, of which $15.1 and $27.1 were recognized during the three and six months ended October 31, 2024, respectively.

For further information on these costs, refer to Note 5:

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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 and Voortman branded products in all channels.

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).

Three Months Ended October 31, Six Months Ended October 31,

Three Months Ended January 31, Nine Months Ended January 31,

2025 2024 % Increase

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Retail Pet Foods 423.0 465.2 (9) 1,268.1 1,370.2 (7)

Sweet Baked Snacks 315.5 — n/a 649.2 — n/a

Sweet Baked Snacks 278.6 300.3 (7) 927.8 300.3 n/m

International and Away From Home 298.6 299.4 — 891.2 899.1 (1)

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Retail Pet Foods 116.8 109.5 7 353.5 288.0 23

Sweet Baked Snacks 70.6 — n/a 145.0 — n/a

Sweet Baked Snacks 54.8 68.0 (19) 199.8 68.0 n/m

International and Away From Home 61.6 50.4 22 178.2 147.0 21

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Retail Pet Foods 27.6 23.5 27.9 21.0

Sweet Baked Snacks 22.4 n/a 22.3 n/a

Sweet Baked Snacks 19.7 22.6 21.5 22.6

International and Away From Home 20.6 16.8 20.0 16.3

Retail Coffee

Retail Coffee segment net sales increased $18.3 in the second quarter of 2025.

Net price realization increased net sales by 3 percentage points, primarily driven by higher net pricing for mainstream roast and ground and instant coffee.

Volume/mix was neutral to net sales, as a decline for the Dunkin’ brand was mostly offset by increases for the Café Bustelo and Folgers brands.

Segment profit increased $31.7, primarily reflecting lapping the $39.1 charge in the prior year related to the termination of a supplier agreement and higher net price realization, partially offset by higher commodity costs.

Retail Coffee segment net sales increased $16.6 in the first six months of 2025.

Net price realization increased net sales by 1 percentage point, 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 was neutral to net sales, as increases for the Café Bustelo and Folgers brands were mostly offset by a decline for the Dunkin’ brand.

Segment profit increased $34.2, primarily reflecting lapping the $39.1 charge in the prior year related to the termination of a supplier agreement, higher net price realization, and lower marketing and selling expenses, partially offset by higher commodity costs.

Retail Coffee segment net sales increased $13.1 in the third quarter of 2025.

Net price realization increased net sales by 9 percentage points, primarily driven by higher net pricing for the Folgers and Café Bustelo brands.

Volume/mix decreased net sales by 7 percentage points, reflecting decreases for the Folgers and Dunkin’ brands, partially offset by an increase for the Café Bustelo brand.

Segment profit increased $0.8, primarily reflecting higher net price realization and favorable property taxes, mostly offset by higher commodity costs and unfavorable volume/mix.

Retail Coffee segment net sales increased $29.7 in the first nine months of 2025.

Net price realization increased net sales by 4 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 Dunkin’ and Folgers brands, partially offset by an increase for the Café Bustelo brand.

Segment profit increased $35.0, primarily reflecting higher net price realization, lapping the $39.1 charge in the prior year related to the termination of a supplier agreement, lower marketing spend, favorable property taxes, and lower selling expense, partially offset by higher commodity costs and unfavorable volume/mix.

Retail Frozen Handheld and Spreads

Retail Frozen Handheld and Spreads segment net sales increased $20.9 in the second quarter of 2025, inclusive of the impact of $8.2 of noncomparable net sales in the prior year related to the divested Sahale Snacks business.

Excluding the noncomparable impact of the divestiture, net sales increased $29.1, or 6 percent.

Volume/mix contributed 8 percentage points to net sales, primarily reflecting increases for Uncrustables sandwiches and Jif peanut butter.

Net price realization decreased net sales by 2 percentage points, primarily reflecting higher trade spend for Uncrustables sandwiches.

Segment profit decreased $12.4, primarily reflecting higher costs, lower net price realization, pre-production expenses related to the new Uncrustables sandwiches manufacturing facility, and higher marketing spend, partially offset by favorable volume/mix.

Retail Frozen Handheld and Spreads segment net sales increased $53.7 in the first six months of 2025, inclusive of the impact of $15.1 of noncomparable net sales in the prior year related to the divested Sahale Snacks business.

Retail Frozen Handheld and Spreads segment net sales increased $8.4 in the third quarter of 2025.

Volume/mix contributed 2 percentage points to net sales, primarily reflecting an increase for Uncrustables sandwiches, partially offset by decreases for fruit spreads and peanut butter.

Net price realization was neutral to net sales, as higher trade spend for peanut butter was mostly offset by higher net pricing for toppings and syrups.

Segment profit decreased $4.9, primarily reflecting higher costs, partially offset by lower pre-production expenses primarily related to the new Uncrustables sandwiches manufacturing facility.

Retail Frozen Handheld and Spreads segment net sales increased $62.1 in the first nine months of 2025, inclusive of the impact of $15.1 of noncomparable net sales in the prior year related to the divested Sahale Snacks business.

Excluding the noncomparable impact of the divestiture, net sales increased $77.2, or 6 percent.

Volume/mix contributed 8 percentage points to net sales, primarily reflecting increases for Uncrustables sandwiches and Jif peanut butter.

Net price realization was neutral to net sales as lower net pricing for Uncrustables sandwiches was mostly offset by higher net pricing for Jif peanut butter, reflecting a list price increase for peanut butter implemented in the prior year.

Segment profit increased $0.9, as favorable volume/mix and lower costs were mostly offset by higher marketing spend, pre-production expenses related to the new Uncrustables sandwiches manufacturing facility, and lower net price realization.

Volume/mix contributed 6 percentage points to net sales, primarily reflecting increases for Uncrustables sandwiches and peanut butter, partially offset by a decrease for fruit spreads.

Segment profit decreased $4.0, primarily reflecting higher marketing spend, pre-production

expenses related to the new Uncrustables sandwiches manufacturing facility, higher costs, and lower net price realization, partially offset by favorable volume/mix.

Retail Pet Foods

Retail Pet Foods segment net sales decreased $18.6 in the second quarter of 2025.

Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreased contract manufacturing sales related to the divested pet food brands and decreases for the Canine Carry Outs and Pup-Peroni brands, partially offset by increases for the Meow Mix and Milk-Bone brands.

Net price realization decreased net sales by 2 percentage points, primarily reflecting higher trade spend for cat food and dog snacks.

Segment profit increased $24.2, reflecting lower costs, favorable volume/mix, and lower distribution and marketing expenses, partially offset by lower net price realization.

Retail Pet Foods segment net sales decreased $59.9 in the first six months of 2025.

Volume/mix decreased net sales by 4 percentage points, primarily reflecting decreased contract manufacturing sales related to the divested pet food brands, partially offset by increases for cat food and dog snacks.

Retail Pet Foods segment net sales decreased $42.2 in the third quarter of 2025.

Volume/mix decreased net sales by 9 percentage points, primarily reflecting a decrease for dog snacks and lower contract manufacturing sales related to the divested pet food brands, partially offset by an increase for cat food.

Net price realization was neutral to net sales, as higher trade spend for cat food was mostly offset by lower trade spend for dog snacks.

Segment profit increased $7.3, primarily reflecting lower costs, partially offset by unfavorable volume/mix.

Retail Pet Foods segment net sales decreased $102.1 in the first nine months of 2025.

Volume/mix decreased net sales by 6 percentage points, primarily reflecting lower contract manufacturing sales related to the divested pet food brands 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.

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We acquired Hostess Brands on November 7, 2023, as discussed in Note 3:

During the second quarter of 2025, the Sweet Baked Snacks segment contributed net sales of $315.5 and segment profit of $70.6.

During the first six months of 2025, the Sweet Baked Snacks segment contributed net sales of $649.2 and segment profit of $145.0.

Prior year net sales and segment profit are not provided due to differences in reporting periods and certain financial measures under previous ownership.

During the third quarter of 2025, the Sweet Baked Snacks segment contributed net sales of $278.6 and segment profit of $54.8.

During the first nine months of 2025, the Sweet Baked Snacks segment contributed net sales of $927.8 and segment profit of $199.8.

Excluding noncomparable net sales in the current year related to the Hostess Brands acquisition and in the prior year related to the divested Voortman business, net sales decreased $21.6, or 8 percent for both the three and nine months ended January 31, 2025.

Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for snack cakes and private label products, partially offset by an increase for donuts.

Net price realization decreased net sales by 2 percentage points, primarily reflecting lower net pricing across the portfolio.

Segment profit decreased $13.2 and increased $131.8 during the three and nine months ended January 31, 2025, respectively, primarily reflecting lower net price realization, the impact of noncomparable segment profit in the prior year related to the divested Voortman business, higher marketing spend, and unfavorable volume/mix, partially offset by the impact of noncomparable segment profit in the current year related to the Hostess Brands acquisition and lower costs.

International and Away From Home

International and Away From Home net sales decreased $3.5 in the second quarter of 2025, including the noncomparable impact of $20.7 of net sales in the prior year related to the divestitures and $0.5 of unfavorable foreign currency exchange.

Excluding the noncomparable impact of the divested businesses and foreign currency exchange, net sales increased $17.7, or 6 percent.

Net price realization contributed 4 percentage points to net sales, primarily driven by list price increases across the majority of the portfolio, partially offset by increased trade spend.

Volume/mix contributed 2 percentage points to net sales, primarily reflecting increases for peanut butter and portion control products and Uncrustables sandwiches, partially offset by a decrease for coffee products.

Segment profit increased $7.8, primarily driven by higher net price realization and favorable volume/mix, partially offset by higher costs, the impact of noncomparable segment profit in the prior year related to the divested businesses, and pre-production expenses related to the new Uncrustables sandwiches manufacturing facility.

International and Away From Home net sales decreased $7.1 in the first six months of 2025, including the noncomparable impact of $42.4 of net sales in the prior year related to the divestitures and $2.6 of unfavorable foreign currency exchange.

International and Away From Home net sales decreased $0.8 in the third quarter of 2025, including the noncomparable impact of $10.4 of net sales in the prior year related to the divested Canada condiment business and $4.2 of unfavorable foreign currency exchange.

Excluding the noncomparable impact of the divested business and foreign currency exchange, net sales increased $13.8, or 5 percent.

Net price realization contributed 6 percentage points to net sales, primarily driven by higher net pricing for coffee and Uncrustables sandwiches.

Volume/mix decreased net sales by 1 percentage point, primarily reflecting a decrease for coffee, partially offset by increases for peanut butter, cat food, and flour and baking.

Segment profit increased $11.2, primarily driven by higher net price realization, partially offset by higher costs and unfavorable foreign currency exchange.

International and Away From Home net sales decreased $7.9 in the first nine months of 2025, including the noncomparable impact of $52.8 of net sales in the prior year related to the divestitures and $6.8 of unfavorable foreign currency exchange.

Excluding the noncomparable impact of the divested businesses and foreign currency exchange, net sales increased $51.7, or 6 percent.

Net price realization contributed 5 percentage points to net sales, primarily driven by list price increases across the majority of the portfolio, partially offset by increased trade spend.

Volume/mix contributed 2 percentage points to net sales, primarily reflecting increases for Uncrustables sandwiches and portion control and peanut butter products, partially offset by decreases for coffee and dog snack products.

Segment profit increased $20.0, primarily driven by higher net price realization, favorable volume/mix, and decreased marketing spend, partially offset by the impact of noncomparable segment profit in the prior year related to the divested businesses, pre-production expenses related to the new Uncrustables sandwiches manufacturing facility, and higher costs.

Net price realization contributed 5 percentage points to net sales, primarily driven by higher net pricing across the majority of the portfolio.

Volume/mix contributed 1 percentage point to net sales, primarily reflecting increases for Uncrustables sandwiches, peanut butter, and portion control, partially offset by decreases for coffee and dog snacks.

Segment profit increased $31.2, primarily driven by higher net price realization and favorable volume/mix, partially offset by higher costs, the impact of noncomparable segment profit in the prior year related to the divested businesses, and pre-production expenses primarily related to the new Uncrustables sandwiches manufacturing facility.

LIQUIDITY AND CAPITAL RESOURCES

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 $49.2 at October 31, 2024, compared to $62.0 at April 30, 2024.

Total cash and cash equivalents decreased to $47.2 at January 31, 2025, compared to $62.0 at April 30, 2024.

The following table presents selected cash flow information.

Six Months Ended October 31,

Nine Months Ended January 31,

Net cash provided by (used for) operating activities $ 816.5 $ 801.3

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(A) Free cash flow is a non-GAAP financial measure used by management to evaluate the amount of cash available for debt repayment, dividend distribution, acquisition opportunities, share repurchases, and other corporate purposes.

The $182.3 increase in cash provided by operating activities in the first six months of 2025 was primarily driven by higher net income adjusted for noncash items in the current year and timing of income tax payments, partially offset by higher working capital requirements in 2025.

The cash required to fund working capital increased compared to the prior year primarily driven by a decrease in cash from trade receivables due to timing of sales and payments, partially offset by a change in inventory levels and an increase in cash from accounts payable due to timing of spend and payments.

Cash used for investing activities in the first six months of 2025 consisted primarily of $210.7 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.

The use of cash for 2025 also included an increase of $14.9 in our derivative cash margin account balances.

Cash used for investing activities in the first six months of 2024 consisted primarily of $299.0 in capital expenditures, primarily related to the new manufacturing and distribution facilities in McCalla, Alabama and plant maintenance across our facilities.

Cash used for financing activities in the first six months of 2025 consisted primarily of dividend payments of $226.5 and a net decrease in short-term borrowings of $121.6.

Cash provided by financing activities in the first six months of 2024 consisted primarily of proceeds from long-term debt of $3,485.0, partially offset by the purchase of treasury shares of $372.4 and dividend payments of $213.2.

The $15.2 increase in cash provided by operating activities in the first nine months of 2025 was primarily driven by higher net income (loss) adjusted for noncash items in the current year, partially offset 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.

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 services agreements entered into in connection with the divestitures and an increase in cash used for inventories, reflecting higher inventory levels 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 payments.

Cash used for investing activities in the first nine months of 2025 consisted primarily of $298.8 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 $10.4 in our derivative cash margin account balances.

These uses of cash for 2025 were partially offset by net proceeds received of $290.5 from the divested Voortman business.

Cash used for investing activities in the first nine months of 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 $455.9 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 $50.5 from the divested Sahale Snacks and Canada condiment businesses.

Cash used for financing activities in the first nine months of 2025 consisted primarily of dividend payments of $340.9, long-term debt repayments of $300.0, and a net decrease in short-term borrowings of $153.2.

Cash provided by financing activities in the first nine months of 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 $413.2.

These proceeds were partially offset by the $991.0 repayment of Hostess Brands debt assumed, the $450.0 Term Loan prepayment, purchase of treasury shares of $372.5, dividend payments of $325.5, and the $86.4 payment to terminate the tax receivable agreement assumed with the acquisition of Hostess Brands.

Supplier Financing Program

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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 pr ogram, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution.

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, in cluding amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements.

As of October 31, 2024, and April 30, 2024, $360.9 and $384.9 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers.

During the first six months of 2025 and 2024, we paid $818.8 and $882.8, respectively, to a financial institution for payment obligations that were settled through the supplier fi nancing program.

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 January 31, 2025, and April 30, 2024, $315.1 and $384.9 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers.

During the first nine months of 2025 and 2024, we paid $1,211.9 and $1,280.6, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

Contingencies

We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business.

We are currently a defendant in a variety of such legal proceedings, and while we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these or other matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at October 31, 2024.

Based on the information known to date, with the exception of the matters discussed below, we do not believe the final outcome of these proceedings will have a material adverse effect on our financial position, results of operations, or cash flows.

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The outcome and the financial impact of these cases, if any, cannot be predicted at this time.

Accordingly, no loss contingency has been recorded for these matters as of October 31, 2024, as the likelihood of loss is not considered probable or reasonably estimable.

Accordingly, no loss contingency has been recorded for these matters as of January 31, 2025, as the likelihood of loss is not considered probable or reasonably estimable.

However, if we are required to pay significant damages, our business and financial results could be adversely impacted, and sales of those products could suffer not only in these locations but elsewhere.

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The outcome and financial impact of this litigation cannot be predicted at this time.

Accordingly, no loss contingency has been recorded for these matters as of October 31, 2024, as the likelihood of loss is not considered probable or reasonably estimable.

Accordingly, no loss contingency has been recorded for these matters as of January 31, 2025, as the likelihood of loss is not considered probable or reasonably estimable.

Voortman Contingency:

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Although we believe that the Claim is meritorious, no assurance can be given as to whether we will recover all, or any part, of the amounts being pursued.

Upon completion of the sale of the Voortman business, which is anticipated to occur during the third quarter of 2025, we will retain rights to the Claim.

We retained rights to the Claim upon the divestiture of the Voortman business in the third quarter of 2025.

Capital Resources

The following table presents our capital structure.

October 31, 2024 April 30, 2024

January 31, 2025 April 30, 2024

Current portion of long-term debt $ 999.9 $ 999.3

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Total capital $ 14,754.6 $ 16,057.9

In December 2024, we commenced the tender offers to purchase up to $300.0 in aggregate purchase price, not including accrued and unpaid interest, of certain outstanding Senior Notes.

As a result, an aggregate principle amount of $122.5 of our 2.750% Senior Notes due 2041 and $138.8 of our 3.550% Senior Notes due 2050 were tendered and accepted, and $194.1 of our 2.125% Senior Notes due 2032 were tendered, of which $135.5 was accepted.

In October 2023, we completed an offering of $3.5 billion in Senior Notes due November 15, 2028, November 15, 2033, November 15, 2043, and November 15, 2053.

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Commercial paper is used as a continuing source of short-term financing for general corporate purposes.

As of October 31, 2024, we had $488.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.95 percent.

We are in compliance with all our debt covenants as of October 31, 2024, and expect to be for the next 12 months.

As of January 31, 2025, we had $462.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.55 percent.

We are in compliance with all our debt covenants as of January 31, 2025, and expect to be for the next 12 months.

For additional information on our long-term debt, sources of liquidity, and debt covenants, see Note 9:

Debt and Financing Arrangements.

Dividend payments were $226.5 and $213.2 in the first six months of 2025 and 2024, respectively, and dividends declared per share were $2.16 and $2.12 in the first six months of 2025 and 2024, respectively.

Dividend payments were $340.9 and $325.5 in the first nine months of 2025 and 2024, respectively, and dividends declared per share were $3.24 and $3.18 in the first nine months of 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.

During the six months ended October 31, 2024, we did not repurchase any common shares under a repurchase plan authorized by the Board.

As of October 31, 2024, approximately 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations.

During the nine months ended January 31, 2025, we did not repurchase any common shares under a repurchase plan authorized by the Board.

As of January 31, 2025, approximately 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations.

There is no guarantee as to the exact number of shares that may be repurchased or when such purchases may occur.

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As a result, an excise tax of $3.6 was accrued on the repurchased shares during the first quarter of 2024 and included within additional capital in our Condensed Consolidated Balance Sheet.

An accrued excise tax of $6.7 was paid during the three and six months ended October 31, 2024, which was related to the shares repurchased under the 10b5-1 Plan during 2023 and 2024.

All other share repurchases during the six months ended October 31, 2024 and 2023, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

An accrued excise tax of $6.7 was paid during the three and nine months ended January 31, 2025, which was related to the shares repurchased under the 10b5-1 Plan during 2023 and 2024.

All other share repurchases during the nine months ended January 31, 2025 and 2024, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

On November 7, 2023, we acquired Hostess Brands, and as a result, we issued approximately 4.0 million common shares valued at $450.2 in exchange for the outstanding shares of Hostess Brands common stock to partially fund the acquisition.

The shares issued were based on each outstanding share of Hostess Brands common stock receiving $30.00 per share in cash and 0.03002 shares of our common shares, which represents a value of $4.25 based on the closing stock price of our common shares on September 8, 2023, the last trading day preceding September 11, 2023, the date on which the execution of the Hostess Brands merger agreement was publicly announced.

shares issued were based on each outstanding share of Hostess Brands common stock receiving $30.00 per share in cash and 0.03002 shares of our common shares, which represents a value of $4.25 based on the closing stock price of our common shares on September 8, 2023, the last trading day preceding September 11, 2023, the date on which the execution of the Hostess Brands merger agreement was publicly announced.

For additional information on the acquisition of Hostess Brands, see Note 3:

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We intend to use a combination of the aforementioned sources of liquidity to fund our obligations with respect to the Senior Notes due March 15, 2025.

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.

We continue to evaluate these risks, which could affect our financial condition or our ability to fund operations or future investment opportunities.

As of October 31, 2024, total cash and cash equivalents of $37.0 was held by our foreign subsidiaries, primarily in Canada.

During the second quarter of 2025, we returned $35.0 of foreign cash to the U.S.

As of January 31, 2025, total cash and cash equivalents of $40.9 was held by our foreign subsidiaries, primarily in Canada.

During the first nine months of 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 the first six months of 2025.

during the first nine months of 2025.

Material Cash Requirements

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Transactions with related parties are in the ordinary course of business and are not material to our results of operations, financial condition, or cash flows.

As of October 31, 2024, there were no other material changes to our material cash requirements as previously reported in our Annual Report on Form 10-K for the year ended April 30, 2024.

As of January 31, 2025, there were no other material changes to our material cash requirements as previously reported in our Annual Report on Form 10-K for the year ended April 30, 2024.

NON-GAAP FINANCIAL MEASURES

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Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income before income taxes and reflects the exclusion of the previously discussed items, as well as any adjustments for one-time tax related activities, when they occur.

While this adjusted effective income tax rate does not generally differ materially from our GAAP effective income tax rate, certain exclusions from non-GAAP results, such as the unfavorable tax impacts associated with the classification of the Voortman business as held for sale, can significantly impact our adjusted effective income tax rate.

While this adjusted effective income tax rate does not generally differ materially from our GAAP effective income tax rate, certain exclusions from non-GAAP results, such as the unfavorable permanent tax impacts associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit and the sale of the Voortman Cookies Limited entity and the favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company, can significantly impact our adjusted effective income tax rate.

These non-GAAP financial measures are not intended to replace the presentation of financial results in accordance with U.S.

Rather, the presentation of these non-GAAP financial measures supplements other metrics we use to internally evaluate our business and facilitate the comparison of past and present operations and liquidity.

Rather, the presentation of these non-GAAP financial measures supplements other metrics we use to internally evaluate

our business and facilitate the comparison of past and present operations and liquidity.

These non-GAAP financial measures may not be comparable to similar measures used by other companies and may exclude certain nondiscretionary expenses and cash payments.

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See page 31 for a reconciliation of net sales adjusted for certain noncomparable items to the comparable GAAP financial measure.

Three Months Ended October 31, Six Months Ended October 31,

Three Months Ended January 31, Nine Months Ended January 31,

2025 2024 2025 2024

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Change in net cumulative unallocated derivative gains and losses (60.0) 5.2 (41.7) 21.1

Cost of products sold – special project costs (A)

Cost of products sold – special project costs

Adjusted gross profit $ 819.2 $ 828.3 $ 2,531.4 $ 2,223.2

Operating income reconciliation:

Operating income $ 169.7 $ 298.9 $ 519.2 $ 602.4

Operating income (loss) reconciliation:

Operating income (loss) $ (594.0) $ 297.4 $ (74.8) $ 899.8

Amortization 53.9 55.7 165.7 135.1

Goodwill impairment charge 794.3 — 794.3 —

Other intangible assets impairment charge 208.2 — 208.2 —

Loss (gain) on divestitures – net 50.2 0.3 311.0 12.9

Change in net cumulative unallocated derivative gains and losses (60.0) 5.2 (41.7) 21.1

Cost of products sold – special project costs (A)

Other special project costs (A)

10.7 6.8 17.8 6.8

Cost of products sold – special project costs

Other special project costs 10.1 98.9 27.9 105.7

Adjusted operating income $ 463.8 $ 457.5 $ 1,402.3 $ 1,174.6

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Net income (loss) $ (662.3) $ 120.4 $ (501.8) $ 498.9

Income tax expense 91.3 54.5 152.3 109.3

Income tax expense (benefit) (0.2) 75.1 152.1 184.4

Amortization 53.9 55.7 165.7 135.1

Goodwill impairment charge 794.3 — 794.3 —

Other intangible assets impairment charge 208.2 — 208.2 —

Loss (gain) on divestitures – net 50.2 0.3 311.0 12.9

Change in net cumulative unallocated derivative gains and losses (60.0) 5.2 (41.7) 21.1

Cost of products sold – special project costs (A)

Other special project costs (A)

10.7 6.8 17.8 6.8

Other debt costs – special project costs (A)

— 19.5 — 19.5

Other expense – special project costs (A)

Cost of products sold – special project costs 1.1 — 11.7 —

Other special project costs 10.1 98.9 27.9 105.7

Other expense – special project costs — (0.1) — 0.3

Other infrequently occurring items:

Unrealized loss (gain) on investment in equity securities – net (B)

Other debt charges (gains) – net (A)

(30.3) — (30.3) 19.5

Realized loss (gain) on investment in equity securities – net (B)

Pension plan termination settlement charge (C)

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Adjusted income $ 278.3 $ 262.6 $ 832.0 $ 754.6

Weighted-average shares – assuming dilution 106.7 102.4 106.6 102.6

Adjusted earnings per share – assuming dilution $ 2.76 $ 2.59 $ 5.19 $ 4.80

(A) Includes certain divestiture, acquisition, integration, and restructuring costs.

Weighted-average shares – assuming dilution (D)

106.7 106.1 106.6 103.8

Adjusted earnings per share – assuming dilution (D)

$ 2.61 $ 2.48 $ 7.80 $ 7.27

(A) Net other debt charges (gains) includes a net gain on extinguishment of debt as a result of the tender offers completed during the third quarter of 2025 and financing fees associated with the Bridge Loan entered into during the second quarter of 2024 to provide committed financing for the acquisition of Hostess Brands.

For more information, see Note 3:

Special Project Costs, Note 6:

Reportable Segments, and Note 8:

Acquisition and Note 9:

Debt and Financing Arrangements.

(B) Unrealized loss (gain) on investment in equity securities – net includes losses and gains resulting from the change in fair value on our investment in Post common stock and the related equity forward contract, which was settled on November 15, 2023.

(B) Realized loss (gain) on investment in equity securities – net includes losses and gains resulting from the change in fair value on our investment in Post common stock and the related equity forward contract, which was settled on November 15, 2023.

For more information, see Note 4:

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Derivative Financial Instruments.

(C) Represents the nonrecurring pre-tax settlement charge recognized during the first quarter of 2024 related to the acceleration of prior service cost for the portion of the plan surplus to be allocated to plan members within our Canadian defined benefit plans, which is subject to regulatory approval before a payout can be made.

subject to regulatory approval before a payout can be made.

For additional information, see Note 10:

Pensions and Other Postretirement Benefits.

(D) Adjusted earnings per common share – assuming dilution for the three and nine months ended January 31, 2025 and 2024, was computed using the treasury stock method.

Further, for the three and nine months ended January 31, 2025, the weighted-average shares – assuming dilution differed from our GAAP weighted-average common shares outstanding – assuming dilution as a result of the anti-dilutive effect of our stock-based awards, which were excluded from the computation of net loss per share – assuming dilution.

For more information see Note 7:

Earnings Per Share.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

A discussion of our critical accounting estimates and policies can be found in the “Management’s Discussion and Analysis” section of our Annual Report on Form 10-K for the year ended April 30, 2024.

There were no material changes to the information previously disclosed.

There were no material changes to the information previously disclosed, with the exception of the item discussed below.

During the second quarter of 2025, the disposal group for the Voortman business was classified as held for sale, and as a result, a portion of the goodwill within the Sweet Baked Snacks reporting unit was allocated to the disposal group based on a preliminary relative fair value analysis.

There were no indicators of impairment for the remaining goodwill of the Sweet Baked Snacks reporting unit as of October 31, 2024.

During the third quarter of 2025, we completed our long-range planning process, following the integration of the Hostess Brands business and operations, resulting in a decline in forecasted net sales and segment profit for the Sweet Baked Snacks segment.

The declines in forecast are in line with the underperformance during the current fiscal year for both net sales and segment profit, primarily driven by increased inflationary pressures and diminished consumer discretionary income, which has led to slower than anticipated recovery in the sweet baked goods category.

In addition, we have not met expectations from a distribution, merchandising, and competitive standpoint, which has resulted in lost market share.

As a result of the decline in both actual and forecasted net sales, as compared to the long-term projections utilized in the purchase price allocation, in conjunction with the narrow differences between estimated fair value and carrying value as of April 30, 2024, we performed an interim impairment analysis on the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark.

Furthermore, on December 2, 2024, we divested the Voortman business, and as a result, we disposed $251.1 of goodwill within the Sweet Baked Snacks reporting unit.

The amount of goodwill allocated to the disposal group was determined based on a relative fair value analysis, utilizing the updated long-range plan.

The interim impairment analysis was completed following the disposal of goodwill allocated to the Voortman business.

We recognized total pre-tax impairment charges of $1.0 billion during the third quarter of 2025, of which $794.3 and $208.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively, to the extent the carrying values exceeded the estimated fair values.

These charges were included as noncash charges in our Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.

The goodwill and indefinite-lived trademark within the Sweet Baked Snacks segment remain susceptible to future impairment charges, as the carrying values approximate estimated fair values due to the impairment charges recognized during the third quarter of 2025 and the recent acquisition of Hostess Brands.

Any significant adverse change in our near or long-term projections or macroeconomic conditions would result in future impairment charges for the Sweet Baked Snacks segment.

There were no other indicators of impairment, and as a result, we do not believe that any of our remaining reporting units or material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2025.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis