What changed in this filing

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Item 1A. Risk Factors

2025-06-18 compared with 2024-06-18 · 113 added, 93 removed, 318 unchanged (39% of the section changed)

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National and global macroeconomic conditions can be uncertain and volatile.

We have in the past been, and may continue to be, adversely affected by changes in national and global macroeconomic conditions, such as inflation, rising interest rates, tax rates, availability of capital markets, consumer spending rates, energy availability and costs, supply chain challenges, labor shortages, geopolitical conflicts (including the ongoing conflicts between Russia and Ukraine and Israel and Hamas), the negative impacts caused by pandemics and public health crises, and growing recession risk.

and retaliatory tariffs by other countries), labor shortages, geopolitical conflicts, the negative impacts caused by pandemics and public health crises, and growing recession risk.

Volatility in financial markets and deterioration of national and global macroeconomic conditions could impact our business and results of operations in a number of ways, including, but not limited to, the following:

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• consumers could choose to purchase private label or competitive products of our lower-priced products as a result of an economic downturn;

• timing, duration, and extent of new or increased tariffs on imports and exports and the expected retaliatory measures on U.S.

goods and the impact on our business are uncertain.

These and other impacts of global and national macroeconomic conditions could also heighten many of the other risk factors discussed in this section.

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Any of these factors could have a material adverse effect on our financial results.

In particular, our ability to realize the anticipated benefits of the acquisition of Hostess Brands will depend, to a large extent, on our ability to integrate the Hostess Brands business into our Company.

In particular, our ability to realize the anticipated benefits of the acquisition of Hostess Brands will depend on our ability to achieve synergies and cost savings, while overcoming executional hurdles .

The combination of two independent businesses is a complex, costly, and time-consuming process.

As a result, we will be required to devote significant management attention and resources to integrating Hostess Brands’ business practices and operations.

As a result, management has devoted a significant amount of time and attention to integrate the Hostess Brands’ business into our Company and resolve operational difficulties.

The integration process may disrupt the businesses and, if implemented ineffectively or if impacted by unforeseen negative economic or market conditions or other factors, we may not realize the full anticipated benefits of the acquisition.

Our failure to meet the challenges involved in integrating the two businesses and to realize the anticipated benefi ts of the acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations or cash flows, cause dilution to our earnings per share, decrease or delay any accretive effect of the transactions, and negatively impact the price of our common shares.

Our failure to meet the challenges involved in integrating the two businesses and to realize the anticipated benefi ts of the acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect our results of operations or cash flows, cause dilution to our earnings per share, decrease or delay any accretive effect of the transaction, and negatively impact the price of our common shares.

Specifically, the difficulties of combining the operations of Hostess Brands with our business include, among others:

• the diversion of management’s attention to integration matters;

• the diversion of management’s attention to acquisition matters;

• difficulty in achieving anticipated cost savings, synergies, business opportunities, and growth prospects from combining the Hostess Brands business with our business;

• difficulties in the integration of operations and systems, inclusive of internal controls;

• difficulties in managing the expanded operations of a significantly larger and more complex company;

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• unanticipated liabilities, such as environmental liabilities resulting from contamination at our properties or those of third parties.

In addition, we have made strategic divestitures of brands and businesses, including the recently divested Sahale Snacks and Canada condiment businesses, as well as past divestitures of certain pet food brands, the natural beverage and grains, and private label dry pet food businesses, among others, and we may continue to do so in the future.

In addition, we have made strategic divestitures of brands and businesses, including the recent divestitures of certain Sweet Baked Snacks value brands and the Voortman business, as well as past divestitures of the Canada condiment and Sahale Snacks businesses, and certain pet food brands, among others, and we may continue to do so in the future.

If we are unable to complete divestitures or successfully transition divested businesses, including the effective management of the related separation and stranded overhead costs, transition services, and the maintenance of relationships with customers, suppliers, and other business partners, our business and financial results could be negatively impacted.

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Special Project Costs.

Further, associated with the divestiture of certain pet food brands, we entered into a contract manufacturing agreement with Post that will continue into 2025.

As a result, a portion of net sales within the pet food product categories is associated with this agreement.

Any change to this agreement could affect our operating results.

For more information, see Note 5:

Reportable Segments.

Our proprietary brands, packaging designs, and manufacturing methods are essential to the value of our business, and the inability to protect our intellectual property could harm the value of our brands and adversely affect our sales and profitability.

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The success of our growth strategy depends on our continued ability to use our existing trademarks and service marks in order to maintain and increase brand awareness and further develop our brands.

If our efforts to protect our intellectual property are not adequate, such as in the event of a cybersecurity incident, if any third party misappropriates or infringes on our intellectual property, or if we are alleged to be misappropriating or infringing on the intellectual property rights of others, the value of our brands may be harmed, which could have a material adverse effect on our business.

If our efforts

to protect our intellectual property are not adequate, such as in the event of a cybersecurity incident, if any third party misappropriates or infringes on our intellectual property, or if we are alleged to be misappropriating or infringing on the intellectual property rights of others, the value of our brands may be harmed, which could have a material adverse effect on our business.

From time to time, we are engaged in litigation to protect our intellectual property, which could result in substantial costs as well as diversion of management attention.

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We also believe that our packaging innovations, such as our AromaSeal ™ canisters, are important to the coffee business’ marketing and operational efforts.

In addition, we utilize a number of proprietary methods for manufacturing our Smucker’s Uncrustables frozen sandwiches, which we believe are essential to producing high-quality sandwiches that consistently meet consumer expectations.

In addition, we utilize a number of proprietary methods for manufacturing our Uncrustables sandwiches, which we believe are essential to producing high-quality sandwiches that consistently meet consumer expectations.

Since the current methods used in making our sandwiches are considered our trade secrets and not protected by patents, it may be difficult for us to prevent competitors from copying our sandwiches if such sandwich-making methods are independently discovered or become generally known in the industry.

If our competitors copy or develop more advanced coffee roasting or packaging or sandwich-making methods, the value of our coffee products or Smucker’s Uncrustables brand, respectively, may be diminished, and we could lose customers to our competitors.

If our competitors copy or develop more advanced coffee roasting or packaging or sandwich-making methods, the value of our coffee products or Uncrustables brand, respectively, may be diminished, and we could lose customers to our competitors.

In addition, certain of our intellectual property rights, including the Dunkin’ trademarks, are owned by third parties and licensed to us.

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Certain of our products are produced at single manufacturing sites.

We have consolidated our production capacity for certain products into single manufacturing sites, including substantially all of our coffee, Milk-Bone dog snacks, Voortman cookies, and fruit spreads.

We have consolidated our production capacity for certain products into single manufacturing sites, including substantially all of our coffee, Milk-Bone dog snacks, and fruit spreads.

We could experience a production disruption at these or any of our manufacturing sites resulting in a reduction or elimination of the availability of some of our products.

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A significant interruption in the operation of any of our manufacturing or distribution capabilities, or the manufacturing or distribution capabilities of our suppliers, distributors, or contract manufacturers, or a service failure by a third-party service provider, whether as a result of adverse weather conditions or a natural disaster, fire, or water availability, as a result of climate change or otherwise;

work stoppage or labor shortages;

work stoppage or labor

cybersecurity breaches;

political instability, terrorism, or geopolitical conflicts (including the ongoing conflicts between Russia and Ukraine and Israel and Hamas);

political instability, terrorism, or geopolitical conflicts;

pandemic illness;

government restrictions, or other causes could significantly impair our ability to operate our business.

government restrictions or government trade policies (including new or increased tariffs imposed by the U.S.

and retaliatory tariffs by other countries);

or other causes could significantly impair our ability to operate our business.

In particular, substantially all of our coffee production takes place in New Orleans, Louisiana and is subject to risks associated with hurricane and other weather-related events, and some of our production facilities are located in places where tornadoes or wildfires can frequently occur, such as Alabama, Kansas, Arkansas, and California.

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While we insure against many of these events and certain business interruption risks and have policies and procedures to manage business continuity planning, such insurance may not compensate us for any losses incurred and our business continuity plans may not effectively resolve the issues in a timely manner.

In November 2021, we announced plans to invest $1.1 billion to build a new manufacturing facility and distribution center in McCalla, Alabama dedicated to the production of Smucker’s Uncrustables frozen sandwiches.

Construction of this facility began in 2022, with production expected to begin in 2025.

Production of new manufacturing facilities and distribution centers could cause delays and increased costs, such as shortages of materials or skilled labor, unforeseen construction, scheduling, engineering, or environmental problems, impacts of adverse weather, and unanticipated cost increases.

If we are unable to commence production at the McCalla facility within the anticipated timeframe, our financial condition and results of operations could be adversely affected.

Our business could be harmed by strikes or work stoppages.

As of April 30, 2024, 27 percent of our full-time employees, located at eleven manufacturing locations, are covered by collective bargaining agreements, inclusive of Hostess Brands employees.

These contracts vary in term depending on location, with six contracts expiring in 2025, representing approximately 10 percent of our total employees.

As of April 30, 2025, 22 percent of our full-time employees, located at nine manufacturing locations, are covered by collective bargaining agreements.

These contracts vary in term depending on location, with three contracts expiring in 2026, representing approximately 10 percent of our total employees.

We cannot be certain that we will be able to renew these collective bargaining agreements on the same or more favorable terms as the current agreements, or at all, without production interruptions caused by labor stoppages.

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Our management team must successfully execute the administrative and operational changes necessary to achieve the anticipated benefits of the initiatives.

These and related demands on our resources may divert the organization’s attention

from other business issues, have adverse effects on existing business relationships with suppliers and customers, and impact employee morale.

These and related demands on our resources may divert the organization’s attention from other business issues, have adverse effects on existing business relationships with suppliers and customers, and impact employee morale.

Any failure to implement these initiatives in accordance with our plans could adversely affect our business, operating efficiency, and financial results.

During 2023, we created a Transformation Office to support our multi-year commitment to ongoing margin enhancement efforts, inclusive of the removal of stranded overhead costs associated with the recent divestitures of certain pet food brands, Sahale Snacks , and the Canada condiment businesses.

During 2023, we created a Transformation Office to support our multi-year commitment to ongoing margin enhancement efforts, inclusive of the removal of stranded overhead costs associated with the recent divestitures of certain Sweet Baked Snacks value brands, the Voortman , Canada condiment, and Sahale Snacks businesses, and certain pet food brands.

The Transformation Office is focused on enterprise-wide continuous improvement strategies to ensure a pipeline of productivity initiatives and profit growth opportunities.

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Our success will depend on our continued ability to produce and successfully market products with extended shelf life.

We have made investments to extend our Hostess Brands ’ product shelf life, while maintaining such products ’ taste, texture, and quality.

We have made investments to extend the shelf life of our products, while maintaining such products ’ taste, texture, and quality.

Extended shelf life (“ESL”) is an important component of our Direct-to-Warehouse model.

Our ability to produce and successfully market existing and new products with ESL is important to our success.

If we are unable to continue to produce Hostess Brands products with ESL or if such products are not accepted by consumers, we could be forced to make changes to our distribution model or products that could have an adverse effect on our product sales, financial condition, and operating results.

If we are unable to continue to produce our products with ESL or if such products are not accepted by consumers, we could be forced to make changes to our distribution model or products that could have an adverse effect on our product sales, financial condition, and operating results.

Risks Related to Our Industry

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A significant product recall, a product liability judgment or settlement, a regulatory action, or false advertising claim, involving either us or our competitors, could also result in a loss of consumer confidence in our food products or the food category, and an actual or perceived loss of value of our brands, materially impacting consumer demand.

In May 2022, we initiated a voluntary recall of select Jif peanut butter products produced at our Lexington, Kentucky facility and sold primarily in the U.S., due to potential salmonella contamination.

During 2023 and 2022, we recognized total direct costs associated with the recall of approximately $120.0, net of insurance recoveries, related to customer returns, fees, unsaleable inventory, and other product recall-related costs, primarily within our U.S.

Retail Frozen Handheld and Spreads segment.

There were no significant direct costs recognized during 2024.

Further, the FDA issued a Warning Letter on January 24, 2023, following an inspection of our Lexington facility completed in June 2022 in connection with the Jif voluntary recall, identifying concerns regarding certain practices and controls at the facility.

We responded to the Warning Letter with a detailed explanation of our food safety plan and extensive verification activities to prevent contamination in Jif peanut butter products.

In addition, we strengthened our already stringent quality processes.

The FDA delivered its Establishment Inspection Report concluding the June 2022 inspection in March 2024.

Although the FDA has concluded its inspection, other agencies may nonetheless conclude that certain practices or controls were not in compliance with the Federal Food, Drug, and Cosmetic Act ( “FDCA”) or other laws.

Any potential regulatory action based on such an agency conclusion could result in the imposition of injunctive terms and monetary payments that could have a material adverse effect on our business, reputation, brand, results of operations, and financial performance, as well as affect ongoing consumer litigation associated with the voluntary recall of Jif peanut butter products.

The outcome and financial impact of the ongoing consumer litigation or any potential regulatory action associated with the Jif voluntary recall cannot be predicted at this time.

We are defendants in ongoing consumer litigation associated with a voluntary recall of select Jif peanut butter products initiated in May 2022.

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 April 30, 2025, and the likelihood of loss is not considered probable or reasonably estimable.

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Specifically, there are a number of trends in consumer preferences that may impact us and the food industry as a whole, including convenience, flavor variety, an emphasis on health and wellness, including weight management (e.g., the use of medications and dieting), the desire for transparent product labeling, and simple and natural ingredients.

Further, weak economic conditions, recessions, significant inflation, severe or unusual weather events, pandemics, and other factors could affect consumer preferences and demand, causing a strain on our supply chain due, in part, to retailers, distributors, or carriers modifying their restocking, fulfillment, or shipping procedures.

Further, weak economic conditions, recessions, significant inflation, severe or unusual weather events, pandemics, and other factors (including new or increased tariffs imposed by the U.S.

and retaliatory tariffs by other countries) could affect consumer preferences and demand, causing a strain on our supply chain due, in part, to retailers, distributors, or carriers modifying their restocking, fulfillment, or shipping procedures.

Failure to respond to these changes could negatively affect our financial condition and results of operations.

We may be limited in our ability to pass cost increases onto our customers in the form of price increases or may realize a decrease in sales volume to the extent price increases are implemented.

We may not be able to pass some or all of any increases in the price of raw materials, energy, and other input costs to our customers by raising prices or decreasing product size.

We may not be able to pass some or all of any increases in the price of raw materials, energy, and other input costs (including new or increased tariffs imposed by the U.S.

and retaliatory tariffs by other countries) to our customers by raising prices or decreasing product size.

To the extent competitors do not also increase their prices or decrease product size, customers and consumers may choose to purchase competing products, including private label or other lower-priced offerings, which may adversely affect our results of operations or our market share.

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We use multiple forms of transportation, including ships, trucks, railcars, and third-party carriers, to bring our products to market.

Disruption to the timely supply of these services or increases in the cost of these services for any reason, including availability or cost of fuel, regulations affecting the industry, labor shortages in the transportation industry, service failures by third-party service providers, carrier capacity, accidents, natural disasters, inflation, a pandemic illness, or a cybersecurity breach or attack, may impact our ability to obtain reliable transportation for products.

and retaliatory tariffs by other countries), labor shortages in the transportation industry, service failures by third-party service providers, carrier capacity, accidents, natural disasters, inflation, a pandemic illness, or a cybersecurity breach or attack, may impact our ability to obtain reliable transportation for products.

Our procurement of transportation services from a diversified group of carriers and continuous monitoring of our transportation methods could be insufficient to protect us from changes in market demand or carrier capacity.

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Our results may be adversely impacted as a result of increased cost, limited availability, and/or insufficient quality of raw materials, including commodities and agricultural products.

We and our business partners purchase and use large quantities of many different commodities and agricultural products in the manufacturing of our products, including green coffee, peanuts, oils and fats, flour, sugar, fruit, and other ingredients.

We and our business partners purchase and use large quantities of many different commodities and agricultural products in the manufacturing of our products, including green coffee, peanuts, flour, sugar, oils and fats, fruit, and other ingredients.

In addition, we and our business partners utilize significant quantities of plastic, glass, metal cans, caps, carton board, and corrugate to package our products and natural gas and fuel oil to manufacture, package, and distribute our products.

The prices of these commodities, agricultural-based products, and other materials are subject to volatility and can fluctuate due to conditions that are difficult to predict, including global supply and demand, commodity market fluctuations, crop sizes and yield fluctuations, adverse weather conditions, natural disasters, water supply, pandemic illness, foreign currency fluctuations, investor speculation, trade agreements (such as tariffs and sanctions), political instability, geopolitical conflicts, consumer demand, general economic conditions (such as inflationary pressures and rising interest rates), and changes in governmental agricultural programs.

Furthermore, commodity and oil prices have been impacted by the ongoing conflicts between Russia and Ukraine and Israel and Hamas.

The prices of these commodities, agricultural-based products, and other materials are subject to volatility and can fluctuate due to conditions that are difficult to predict, including global supply and demand, commodity market fluctuations, crop sizes and yield fluctuations, adverse weather conditions, natural disasters, water supply, pandemic illness, foreign currency fluctuations, investor speculation, trade agreements (including new or increased tariffs imposed by the U.S.

and retaliatory tariffs by other countries), political instability, geopolitical conflicts, consumer demand, general economic conditions (such as inflationary pressures and rising interest rates), and changes in governmental agricultural programs.

We also compete for certain raw materials, notably corn and soy-based agricultural products, with the biofuels industry, which has resulted in increased prices for these raw materials.

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Although we use futures, basis, options, and fixed price contracts to manage commodity price volatility in some instances, commodity price increases ultimately result in corresponding increases in our raw material and energy costs.

During 2024, we continued to experience materially higher commodity and supply chain costs, including manufacturing, ingredient, and packaging costs, due to inflationary pressures.

We expect the pressures of cost inflation to continue into 2025, although with less volatility than experienced in 2024 and 2023.

During 2025, we continued to experience materially higher commodity and supply chain costs, including manufacturing, ingredient, and packaging costs, due to inflationary pressures, and we expect the pressures of cost inflation to continue into 2026.

Although we take measures to mitigate inflation through the use of derivatives and pricing actions, if these measures are not effective, our financial condition, results of operations, and cash flows could be materially adversely affected.

We expect the green coffee commodity markets to continue to be challenging due to the significant ongoing price volatility.

For example, during 2022, we experienced drought and frost impacts, which substantially reduced green coffee production in Brazil.

For example, during 2025, we experienced extreme drought impact, which substantially reduced green coffee production in Brazil.

Due to the significance of green coffee to our coffee business, combined with our ability to only partially mitigate future price risk through purchasing practices and hedging activities, significant increases or decreases in the cost of green coffee could have an adverse impact on our profitability, as compared to that of our competitors.

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We currently do not qualify any of our commodity or foreign currency exchange derivatives for hedge accounting treatment.

We instead mark-to-market our derivatives through the Statements of Consolidated Income, which results in changes in the fair value of all of our derivatives being immediately recognized in consolidated earnings, resulting in potential volatility in both gross profit and net income (loss).

These gains and losses are reported in cost of products sold in our Statements of Consolidated Income but are excluded from our segment operating results and non-GAAP earnings until the related inventory is sold, at which time the gains and losses are reclassified to segment profit and non-GAAP earnings.

We instead mark-to-market our derivatives through the Statements of Consolidated Income (Loss), which results in changes in the fair value of all of our derivatives being immediately recognized in consolidated earnings, resulting in potential volatility in both gross profit and net income (loss).

These gains and losses are reported in cost of products sold in our Statements of Consolidated Income (Loss) but are excluded from our segment operating results and non-GAAP earnings until the related inventory is sold, at which time the gains and losses are reclassified to segment profit and non-GAAP earnings.

Although this accounting treatment aligns the derivative gains and losses with the underlying exposure being hedged within segment results, it may result in volatility in our consolidated earnings.

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In addition, long-term volatility and disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation of financial institutions, reduced alternatives, or the failure of significant financial institutions could adversely affect our access to the liquidity needed for our business in the longer term.

Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our

business needs can be arranged.

Disruptions in the capital and credit markets could also result in higher interest rates on publicly issued debt securities and increased costs under credit facilities.

Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged.

Disruptions in the capital and credit markets could also result in higher interest rates on

publicly issued debt securities and increased costs under credit facilities.

Continuation of these disruptions would increase our interest expense and capital costs and could adversely affect our results of operations and financial position.

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• exposing us to greater interest rate risk, including the risk to variable borrowings of a rate increase and the risk to fixed borrowings of a rate decrease;

• changing the outlook or downgrading our public credit ratings by a rating agency.

Our ability to make payments on our indebtedness will depend on our ability to generate cash in the future.

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The carrying values of the goodwill and indefinite-lived intangible assets were $0.5 billion and $1.2 billion, respectively, within the Sweet Baked Snacks segment, $2.1 billion and $1.3 billion, respectively, within the U.S.

Retail Coffee segment, and $1.6

billion and $1.1 billion, respectively, within the U.S.

Retail Coffee segment, and $1.6 billion and $1.1 billion, respectively, within the

Retail Pet Foods segment, which represent approximately 80 percent of the total goodwill and indefinite-lived intangible assets as of April 30, 2025.

The g oodwill and indefinite-lived trademarks within the Sweet Baked Snacks reportable segment were based on their estimated fair values on the acquisition date.

Since carrying value represents the estimated fair value, these assets could be more susceptible to future impairment.

A change to the assumptions regarding future performance of the business, or a portion of it, or a change to other assumptions, could result in significant impairment losses in the future.

During the second quarter of 2025, the disposal group for the Voortman business, inclusive of approximately $251.0 of goodwill within the Sweet Baked Snacks reporting unit that was allocated to the disposal group based on a relative fair value analysis, was classified as held for sale.

As a result, a pre-tax loss on the divestiture of $260.8 was recognized and included as a noncash charge in our Statement of Consolidated Income (Loss) and Statement of Consolidated Cash Flows.

We evaluated whether it was more likely than not that the remaining goodwill of the Sweet Baked Snacks reporting unit was impaired as of October 31, 2024, and concluded that no impairment existed at this date.

On December 2, 2024, we completed the divestiture of the Voortman business.

During the third quarter of 2025, we completed the integration of the Hostess Brands business and operations, but continued to face execution challenges from a distribution, merchandising, and competitive standpoint, which resulted in lost market share.

Further, the sweet baked goods category continued to face increased inflationary pressures and diminished discretionary income for consumers.

These factors were key inputs into our long-range planning process, which was also completed during the third quarter of 2025, and indicated a decline in forecasted net sales and segment profit for the Sweet Baked Snacks reporting unit.

As a result, we performed an interim impairment assessment of the Sweet Baked Snacks reporting unit that indicated an estimated fair value significantly below the carrying value of the reporting unit.

We also performed an interim impairment assessment of the Hostess brand indefinite-lived trademark.

As a result of these assessments, 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.

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

We completed the annual impairment assessment, in which goodwill was tested for impairment at the reporting unit level for each reporting unit with goodwill as of the annual assessment date.

As part of our annual evaluation, we did not recognize any impairment charges related to our reporting units or indefinite-lived intangible assets.

The estimated fair value exceeded the carrying value by greater than 10 percent for all of our reporting units and indefinite-lived intangible assets, with the exception of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, as the carrying values approximated estimated fair values due to the impairment charges recognized during the third quarter of 2025.

During the fourth quarter of 2025, we continued to underperform as compared to plan in both net sales and segment profit for the Sweet Baked Snacks segment as a result of ongoing performance challenges from a distribution, merchandising, and competitive standpoint and sustained challenges in the sweet baked goods category.

Performance during the fourth quarter of 2025 reflected the impact of a dynamic macroeconomic environment, inclusive of a reduction in discretionary consumer spending and the changing regulatory environment.

Furthermore, in conjunction with the recently announced leadership transition, we re-evaluated the strategic priorities for the Sweet Baked Snacks segment to drive growth for the Hostess brand, with a focus on strengthening our portfolio, elevating our execution, and refocusing our strategy to reignite sustainable growth.

Following the leadership transition, we revised our financial plan for 2026 as compared to prior expectations, reflecting near-term underperformance, an evolving macroeconomic environment, and updated Sweet Baked Snacks strategic priorities, inclusive of the recently announced closure of the Indianapolis, Indiana manufacturing facility in 2026.

The updated financial plan reflects decreased net sales and segment profit, as compared to the projections used in the annual impairment review.

The overall reduction in net sales and segment profit, in conjunction with the sustained underperformance of the sweet baked goods category since acquisition, led to a reduction of the forecasted long-term growth rate for the Sweet Baked Snacks reporting unit.

As a result of these declines and the narrow differences between estimated fair values and carrying values as of the annual assessment date, we performed an interim impairment assessment of the Sweet Baked Snacks reporting unit that indicated an estimated fair value significantly below the carrying value of the reporting unit.

We also performed an interim impairment assessment of the Hostess brand indefinite-lived trademark.

As a result of these assessments, we recognized total pre-tax impairment charges of $980.0 during the fourth quarter of 2025, of which $867.3 and $112.7 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively.

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

The goodwill and indefinite-lived trademark within the Sweet Baked Snacks segment remain susceptible to future impairment charges.

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 reporting unit.

There were no other indicators of impairment during the fourth quarter of 2025, 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 April 30, 2025.

For additional information, refer to Note 7:

Goodwill and Other Intangible Assets.

We do not believe that the Sweet Baked Snacks reporting unit or any of the indefinite-lived assets within the Sweet Baked Snacks segment are more likely than not impaired as of April 30, 2024.

However, significant adverse changes to the assumptions regarding the future performance of the Sweet Baked Snacks segment or its brands, a sustained adverse change to macroeconomic conditions, or a change to other assumptions could result in impairment losses in the future, which could be significant.

As of April 30, 2024, with the exception of the Sweet Baked Snacks reporting unit and indefinite-lived intangible assets, the estimated fair value was substantially in excess of the carrying value for all reporting units and material indefinite-lived intangible assets, and in all such instances, the estimated fair value exceeded the carrying value by greater than 10 percent.

While we concluded there were no indicators of impairment as of April 30, 2024, any significant sustained adverse change in consumer purchasing behaviors, financial results, or macroeconomic conditions could result in future impairment.

We work with our suppliers to extend our payment terms, which are then supplemented by a third-party administrator to assist in effectively managing our working capital.

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Accordingly, there can be no assurance that any future dividends will be equal or similar in amount to any dividends previously paid or that our Board will not decide to reduce, suspend, or discontinue the payment of dividends at any time in the future.

A reduction or elimination of our dividend payments could have a negative effect on our share price.

Risks Related to Regulation and Litigation

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Although we strive to respond to consumer preferences and social expectations, we may not be successful in these efforts.

An unfavorable report on the effects of ingredients present in our

products or packaging, product recalls, or negative publicity or litigation could influence consumer preferences, significantly reduce the demand for our products, and adversely affect our profitability.

An unfavorable report on the effects of ingredients present in our products or packaging, product recalls, or negative publicity or litigation could influence consumer preferences, significantly reduce the demand for our products, and adversely affect our profitability.

We may also be subject to complaints from or litigation by consumers who allege food and beverage-related illness, or other quality, health, advertising, or operational concerns.

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Federal, state, and foreign statutory income tax rates and taxing regimes have been subject to significant change and continue to evolve.

Our interpretation of current tax laws and their applicability to our business, as well as any changes to existing laws, can significantly impact our effective income tax rate and deferred tax balances.

In particular, proposals brought forth by the U.S.

presidential administration include increases to federal income tax rates that, if enacted, could have a material impact to our financial results.

Our interpretation of current tax laws and their applicability to our business, as well as any changes to existing laws, can significantly impact our effective income tax rate and deferred

tax balances.

We are also subject to regular reviews, examinations, and audits by the Internal Revenue Service (the “IRS”) and other taxing authorities with respect to taxes within and outside of the U.S.

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Departments of Agriculture, Commerce, and Labor, state regulatory agencies, and other agencies, as well as to regulations and laws administered by government agencies in Canada and other countries in which we have operations and our products are sold.

In particular, the manufacturing, marketing, transportation, storage, distribution, packaging disposal, and sale of food products are each subject to governmental regulation that is increasingly extensive.

Governmental regulation encompasses such matters as ingredients (including whether a product contains bioengineered ingredients), packaging and disposal of packaging, labeling (including use of certain terms such as sugar free, healthy, low sodium, and low fat), pricing, advertising, relations with distributors and retailers, health, safety, data privacy and security, and anti-corruption, as well as an increased focus regarding environmental policies relating to climate change, regulating greenhouse gas emissions, energy policies, and sustainability, including single-use plastics.

In particular, the manufacturing, marketing, transportation, storage, distribution, packaging disposal (including extended producer responsibility regulations), and sale of food products are each subject to governmental regulation that is increasingly extensive.

Governmental regulation encompasses such matters as ingredients (including whether a product contains bioengineered ingredients or artificial dyes), packaging and disposal of packaging, labeling (including use of certain terms such as sugar free, healthy, low sodium, and low fat), pricing, advertising, relations with distributors and retailers, health, safety, data privacy and security, and anti-corruption, as well as an increased focus regarding environmental policies relating to climate change, regulating greenhouse gas emissions, energy policies, and sustainability, including single-use plastics.

Additionally, we are routinely subject to new or modified securities regulations, other laws and regulations, and accounting and reporting standards.

In the U.S., we are required to comply with federal laws, such as the FDCA, the Food Safety Modernization Act, the Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Tariff Act, laws governing equal employment opportunity, and various other federal statutes and regulations.

We are also subject to various laws and regulations that are continuously evolving in the U.S.

and other jurisdictions regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data.

For example, in the U.S., California, Virginia, Colorado, Connecticut, and Utah all have comprehensive privacy laws in effect, which impose privacy obligations on companies that do business in these states and that collect personal information from certain individuals;

providing civil penalties for companies that fail to comply with these requirements including, in some jurisdictions, a private right of action for data breaches.

Several additional states have passed similar comprehensive privacy laws that are set to take effect between calendar years 2024 and 2026, and beyond calendar year 2026, it is highly likely there will be several more states following suit.

Therefore, on an ongoing basis, we will be evaluating whether we have new privacy obligations that require us to develop additional compliance mechanisms and processes.

The current U.S.

presidential administration announced the imposition of significant new tariffs that will be imposed on our imports and exports, which could negatively impact international trade relations, result in retaliatory actions, and cause inflationary pressures and higher costs.

The imposition of such tariffs and retaliatory measures could have a significant adverse impact on our results of operations, financial position, or cash flows, depending on their timing, degree, and magnitude.

Further, we may be required to raise prices for our products to offset the additional costs, which could reduce demand and result in the loss of customers.

Additionally, tariffs may harm our competitive position in key markets, as we may be at a disadvantage as compared to our competitors who operate in countries that are subject to lesser tariffs.

In the U.S., we are required to comply with federal laws, such as the Federal Food, Drug, and Cosmetic Act, the Food Safety Modernization Act, the Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Tariff Act, laws governing equal employment opportunity, and various other federal statutes and regulations.

We are also subject to various laws and regulations that are continuously evolving in the U.S., Canada, and other jurisdictions regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data.

For example, in the U.S., California, Colorado, Connecticut, Delaware, Iowa, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah, and Virginia all have comprehensive privacy laws in effect that impose privacy obligations on companies that do business in these states and that collect personal information from certain individuals.

In some jurisdictions, these laws impose civil penalties on companies that fail to comply with these requirements including, in certain cases, a private right of action for data breaches.

In addition, several other states have passed similar comprehensive privacy laws that are set to take effect in either the second half of calendar year 2025 or in calendar year 2026, and still more states have either already introduced or have corresponding privacy rights bills in committee, which means the scope of privacy laws we will be subject to will continue to expand beyond calendar year 2026.

Therefore, on an ongoing basis, we will continuously evaluate our new privacy obligations and develop additional compliance mechanisms and processes as may be required.

There are also a wide range of enforcement agencies at both state and federal levels that can investigate companies for privacy and data security concerns based on general consumer protection laws.

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Complying with new regulations and laws, or changes to existing regulations and laws, or their application could increase our costs or adversely affect our sales of certain products.

In addition, our failure or inability to comply with applicable

regulations and laws could subject us to civil remedies, including fines, injunctions, recalls or seizures, and potential criminal sanctions, which could have a material adverse effect on our business and financial condition.

In addition, our failure or inability to comply with applicable regulations and laws could subject us to civil remedies, including fines, injunctions, recalls or seizures, and potential criminal sanctions, which could have a material adverse effect on our business and financial condition.

Our international operations expose us to regulatory risks.

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In addition, the enforcement of remedies in foreign jurisdictions may be less certain, resulting in varying abilities to enforce intellectual property and contractual rights.

Risks associated with corporate responsibility matters may negatively affect our business and operations.

There is a growing focus from certain investors, customers, and other key stakeholders regarding corporate responsibility resulting in an increased emphasis on corporate responsibility ratings.

Corporate responsibility ratings are released by a variety of third-party organizations who provide reports on companies in order to measure and assess corporate responsibility performance.

We risk damage to our brand and reputation if it is determined that our corporate responsibility procedures or standards do not meet the standards set by our stakeholders.

Any failure in our decision-making or related investments regarding corporate responsibility could affect consumer perceptions of our brand.

Our initiatives may fail to satisfy the varied and differing views of our stakeholders.

In recent years, opposing sentiment of corporate responsibility topics or initiatives has gained momentum across the U.S., as several states and Congress have proposed or enacted policies, legislation, or initiatives, and stakeholders have expressed opposing views on corporate responsibility topics and initiatives.

In addition, the federal government has recently issued and acted on executive orders, memoranda, and investigations opposing diversity, equity, and inclusion initiatives.

Such policies, sentiment, legislation, initiatives, litigation, legal opinions, and scrutiny could result in us facing additional compliance obligations, becoming the subject of investigations, litigation, enforcement actions, boycotts, loss of consumer demand, or sustaining reputational harm, which could negatively impact our business and financial results.

Risks associated with climate change and other environmental impacts or legal, regulatory, or market measures to address climate change may negatively affect our business and operations.

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In addition, natural disasters, extreme weather conditions, and other natural conditions may disrupt the productivity of our facilities or the operation of our supply chain, which could increase our insurance or other operating costs or require us to make additional, unplanned capital expenditures.

Specifically , in January 2024, a snow and ice storm in the south caused our cat food plant in Decatur, Alabama to be temporarily shut down, and in 2022, Hurricane Ida caused our coffee manufacturing facilities in New Orleans, Louisiana to be temporarily shut down.

Specifically , in January 2024, a snow and ice storm in the south caused our cat food plant in Decatur, Alabama to be temporarily shut down .

Although we consider these to be uncommon events, and we were able to effectively minimize any disruptions through our business continuity planning efforts, extreme weather could disrupt our production in the future, adversely affecting our ability to meet customer deadlines and supply demands.

Additionally, there is an increased focus by foreign, federal, state, and local regulatory and legislative bodies regarding environmental policies relating to climate change, regulating greenhouse gas emissions, energy policies, and sustainability, including single-use plastics.

Increased energy or compliance costs and expenses due to the impacts of climate change and additional legal or regulatory requirements regarding climate change designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment could be costly and may cause disruptions in, or an increase in the costs associated with, our manufacturing and distribution facilities, as well as increase supply chain costs.

Moreover, compliance with any such legal or regulatory requirements may require us to make significant changes to our business operations, strategy, and reporting .

Collecting, measuring, and analyzing information relating to climate change and sustainability matters can be costly, time consuming, dependent on third-party cooperation, and unreliable.

Furthermore, methodologies for measuring, tracking, and reporting on climate change and sustainability continue to change over time, which requires our processes and controls for such data to evolve as well.

Furthermore, methodologies for measuring, tracking, and reporting on climate change and sustainability continue to change over time,

which requires our processes and controls for such data to evolve as well.

Finally, we might fail to effectively address increased attention from the media, shareholders, activists, and other stakeholders on climate change and related environmental sustainability matters.

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Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.

changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

Methodologies for reporting this data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures), and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

If we fail to achieve, are perceived to have failed to achieve, or are delayed in achieving these goals and commitments, it could negatively affect consumer preference for our products or investor confidence in our stock, as well as expose us to government enforcement actions and private litigation.

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Therefore, we continuously monitor and update our IT networks and infrastructure to prevent, detect, address, and mitigate the risk of unauthorized access, misuse, computer viruses, phishing attacks, malware, ransomware, social engineering, password theft, physical breaches, and other events that could have a security impact.

In addition, the ongoing conflicts between Russia and Ukraine and Israel and Hamas have heightened the risk of cyberattacks.

In addition, the ongoing geopolitical conflicts have heightened the risk of cyberattacks.

We invest in industry-standard security technology to protect our data and business processes against the risk of data security breaches and cyber-based attacks.

We believe our security technology tools and processes provide adequate measures of protection against security breaches and in reducing cybersecurity risks.

We believe our security technology tools and processes provide adequate measures of protection against security breaches and reduce cybersecurity risks.

Nevertheless, despite continued vigilance in these areas, security breaches or system failures of our infrastructure, whether due to attacks by hackers, employee error, or other causes, can create system disruptions, shutdowns, transaction errors, or unauthorized disclosure of confidential or proprietary information.

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Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, inaccurate financial reporting, the loss of or damage to intellectual property through a security breach, the loss of sensitive data through a security breach, or otherwise.

We may face complications with the design or implementation of our new enterprise performance management system, which may negatively affect our business and operations.

We may face complications with the design or implementation of our new enterprise performance management ( “ EPM ” ) system, which may negatively affect our business and operations.

W e rely on IT networks and systems to manage our business and operations and occasionally implement new and upgrade our existing IT systems.

We are in the process of a multi-year implementation of a new enterprise performance management (“EPM”) system, inclusive of an enterprise resource planning system (i.e., general ledger), through the use of Oracle Cloud Solutions.

We are in the process of a multi-year implementation of a new EPM system, inclusive of an enterprise resource planning system (i.e., general ledger), through the use of Oracle Cloud Solutions.

The EPM system will replace our existing financial system and is designed to accurately maintain our financial records, enhance operational functionality and efficiency, and provide timely information to our management team.

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In addition, if the EPM system does not operate as intended, the effectiveness of our internal controls over financial reporting could be adversely affected.

The ongoing conflicts between Russia and Ukraine and Israel and Hamas and the related disruptions to the global economy could adversely affect our business, financial condition, or results of operations.

The global economy has been negatively impacted by the ongoing conflicts between Russia and Ukraine and Israel and Hamas.

Ongoing geopolitical conflicts and the related disruptions to the global economy could adversely affect our business, financial condition, or results of operations.

The global economy has been negatively impacted by the ongoing conflicts between Russia and Ukraine and Israel and Hamas, as well as rising tensions between China and Taiwan.

Governments in the United States, United Kingdom, and European Union have imposed sanctions on certain products, industry sectors, and parties in Russia.

Although we do not have any operations in Russia, Ukraine, Israel, or Palestine, we have experienced and may continue to experience shortages in materials and increased costs for transportation, energy, and raw materials due in part to the negative impact of the conflicts on the global economy.

Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we have experienced and may continue to experience shortages in materials and increased costs for transportation, energy, and raw materials due in part to the negative impact of the conflicts on the global economy.

If the conflicts continue for an extended period of time, they could result in cyberattacks, supply chain disruptions, lower consumer demand, changes in foreign currency exchange rates, increased trade barriers and restrictions on global trade, and other impacts, which may adversely affect our business, financial condition, or results of operations.

These and other impacts of the ongoing conflicts between Russia and Ukraine and Israel and Hamas could also heighten many of the other risk factors discussed in this section.

These and other impacts of the ongoing conflicts between Russia and Ukraine, Israel and Hamas, and rising tensions between China and Taiwan could also heighten many of the other risk factors discussed in this section.

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What changed 10-K

Item 1A. Risk Factors