What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-25 compared with 2025-08-27 · 117 added, 85 removed, 226 unchanged (47% 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 months ended July 31, 2025 and 2024.

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, 2025 and 2024.

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

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The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business.

Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in in the Sweet Baked Snacks segment.

Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in the Sweet Baked Snacks segment.

Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs.

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

Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, respectively, which were included in the Sweet Baked Snacks segment.

Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, which were included in the Sweet Baked Snacks segment.

Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs.

We recognized a pre-tax loss of $265.9 on this transaction, primarily during the second quarter of 2025.

For additional information, see Note 3:

Divestitures.

We are the owner of all trademarks referenced herein, except for the following, which are used under license:

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Trends Affecting our Business

During the first three months of 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, which we anticipate will persist through the remainder of 2026.

During the first half of 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, which we anticipate will persist through the remainder of 2026.

Further, the higher costs have required price increases across our business, and we anticipate the price elasticity of demand could remain elevated during 2026 as consumers continue to experience broader inflationary pressures and are selective in their spending.

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We have maintained production at all our facilities and availability of appointments at distribution centers.

Furthermore, we have implemented measures to manage order volumes to ensure a consistent supply across our retail partners during periods of high demand.

However, to the extent that high demand levels or supply chain disruptions delay order fulfillment, we may experience volume loss and elevated penalties.

Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we continue to monitor the environment for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions.

Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we continue to monitor these environments, among others, for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions.

Overall, broad-based supply chain disruptions and the impact of inflation remain uncertain.

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Results of Operations

Three Months Ended July 31,

2025 2024 % Increase (Decrease)

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

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

Net sales $ 2,330.1 $ 2,271.2 3 % $ 4,443.4 $ 4,396.3 1 %

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Net income (loss):

Net income (loss) $ (43.9) $ 185.0 (124)

Net income (loss) per common share – assuming dilution $ (0.41) $ 1.74 (124)

Net income (loss) $ 241.3 $ (24.5) n/m $ 197.4 $ 160.5 23

Net income (loss) per common share – assuming dilution $ 2.26 $ (0.23) n/m $ 1.85 $ 1.51 23

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 July 31,

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

2025 2024 Increase

(Decrease) % 2025 2024 Increase

Net sales $ 2,330.1 $ 2,271.2 $ 58.9 3 % $ 4,443.4 $ 4,396.3 $ 47.1 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 first three months of 2026 decreased $11.8, or 1 percent, which includes $52.8 of noncomparable net sales in the prior year related to divestitures.

Net sales in the second quarter of 2026 increased $58.9, or 3 percent, which includes $50.5 of noncomparable net sales in the prior year related to divestitures.

Net sales excluding divestitures and foreign currency exchange increased $111.0, or 5 percent.

Net price realization contributed 6 percentage points to net sales, primarily driven by higher net pricing for coffee, partially offset by lower net pricing for peanut butter.

Volume/mix decreased net sales by 4 percentage points, primarily driven by decreases for coffee, dog snacks, sweet baked goods, and fruit spreads and lower contract manufacturing sales related to the divested pet food brands, partially offset by an increase for Uncrustables sandwiches.

Net price realization contributed 11 percentage points to net sales, primarily driven by higher net pricing for coffee.

Volume/mix decreased net sales by 6 percentage points, primarily driven by decreases for coffee, peanut butter, dog snacks, and lapping contract manufacturing sales related to the divested pet food brands in the prior year.

Net sales in the first six months of 2026 increased $47.1, or 1 percent, which includes $103.3 of noncomparable net sales in the prior year related to divestitures.

Net sales excluding divestitures and foreign currency exchange increased $152.2, or 4 percent.

Net price realization contributed 8 percentage points to net sales, primarily driven by higher net pricing for coffee.

Volume/mix decreased net sales by 5 percentage points, primarily driven by decreases for coffee, dog snacks, peanut butter, and lapping contract manufacturing sales related to the divested pet food brands in the prior year.

Operating Income

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

Three Months Ended July 31,

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

2025 2024 2025 2024

Gross profit 37.3 % 39.0 % 30.3 % 38.3 %

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Other special project costs 0.2 0.5 0.3 0.4

Loss (gain) on divestitures – net — 11.5 — 5.9

Other operating expense (income) – net (0.1) (0.1) (0.2) (0.2)

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Amounts may not add due to rounding.

Gross profit decreased $322.5, or 40 percent, in the first three months of 2026, primarily driven by higher commodity costs, inclusive of the net unfavorable impact of derivative gains and losses, as well as unfavorable volume/mix and the noncomparable impact of divestitures, partially offset by higher net price realization.

Operating income decreased $303.9, or 87 percent, primarily reflecting the decrease in gross profit, partially offset by a decrease in selling, distribution, and administrative (“SD&A”) expenses and lower amortization expense.

Gross profit decreased $16.2, or 2 percent, in the second quarter of 2026, primarily driven by higher commodity costs, unfavorable volume/mix, tariffs, and the noncomparable impact of divestitures, partially offset by higher net price realization and a net favorable impact of derivative gains and losses.

Operating income increased $248.8, or 147 percent, in the second quarter of 2026, primarily driven by lapping the $260.8 pre-tax loss on the Voortman business disposal group classified as held for sale in the prior year, lower amortization expense, and a decrease in other special project costs, partially offset by the decrease in gross profit and an increase in selling, distribution, and administrative (“SD&A”) expenses.

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”) decreased $89.3, or 11 percent, as compared to the prior year, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit.

Adjusted operating income decreased $77.6, or 17 percent, as compared to the prior year, further reflecting the exclusion of amortization expense and other special project costs.

Gross profit excluding non-GAAP adjustments (“adjusted gross profit”) decreased $89.8, or 10 percent, as compared to the prior year second quarter, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit.

Adjusted operating income decreased $96.3, or 20 percent, as compared to the prior year second quarter, further reflecting the exclusion of the $260.8 pre-tax loss for the assets held for sale in the prior year, amortization expense, and other special project costs.

Gross profit decreased $338.7, or 20 percent, in the first six months of 2026, primarily driven by higher commodity costs, a net unfavorable impact of derivative gains and losses, unfavorable volume/mix, tariffs, and the noncomparable impact of divestitures, partially offset by higher net price realization.

Operating income decreased $55.1, or 11 percent, in the first six months of 2026, primarily reflecting the decrease in gross profit, partially offset by lapping the $260.8 pre-tax loss on the Voortman business disposal group classified as held for sale in the prior year, lower amortization expense, and decreases in other special project costs and SD&A expenses.

Adjusted gross profit decreased $179.1, or 10 percent, as compared to the prior year, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit.

Adjusted operating income decreased $173.9, or 19 percent, as compared to the prior year, further reflecting the exclusion of the $260.8 pre-tax loss for the assets held for sale in the prior year, amortization expense, and other special project costs..

Interest Expense

Net interest expense was comparable to the prior year.

Net interest expense was comparable to the prior year for the three and six months ended October 31, 2025.

For additional information, refer to Note 7:

Debt and Financing Arrangements.

Income taxes decreased $73.6, or 121 percent, during the three months ended July 31, 2025, primarily due to the loss before income taxes resulting in an income tax benefit in the current year.

During both the current and prior years, the effective income tax rates varied from the U.S.

The effective income tax rates for the three months ended October 31, 2025 and 2024, were 24.2 and 136.7 percent, respectively, and for the six months ended October 31, 2025 and 2024, were 24.6 and 48.7 percent, respectively.

During the current year, the effective income tax rates varied from the U.S.

statutory income tax rate of 21.0 percent, primarily due to state income taxes.

During the prior year, the effective income tax rates varied from the U.S.

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

We anticipate a full-year effective income tax rate for 2026 to be approximately 24.2 percent.

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Total divestiture costs incurred to date related to the Sahale Snacks and Canada condiment businesses that were divested in 2024 were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges.

We did not incur any divestiture costs during the three months ended July 31, 2025, and incurred divestiture costs of $0.3 during the three months ended July 31, 2024, primarily consisting of employee-related costs.

We did not incur any divestiture costs during the three and six months ended October 31, 2025, and 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.

We do not anticipate any additional costs to be incurred related to these divestiture activities.

Furthermore, we identified opportunities to address certain distribution inefficiencies, as a result of these divestitures.

As a result of our recent divestitures, we identified opportunities to address certain distribution inefficiencies.

We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges.

The majority of these costs are expected to be cash charges and incurred by the end of 2026.

We have recognized total

cumulative costs of $6.8, of which $0.3 and $0.1 were recognized during the three months ended July 31, 2025 and 2024, respectively, primarily consisting of other transition and termination costs.

We have recognized total cumulative costs of $8.4, of which $1.6 and $1.9 were recognized during the three and six months ended October 31, 2025, respectively, and $0.8 and $0.9 during the three and six months ended October 31, 2024, respectively, primarily consisting of other transition and termination costs.

Integration Costs :

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Total integration costs related to the acquisition are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges.

We have recognized total cumulative integration costs of $185.3, of which $0.4 and $12.0 were recognized during the three months ended July 31, 2025 and 2024, respectively.

We have recognized total cumulative integration costs of $186.0, of which $0.7 and $1.1 were recognized during the three and six months ended October 31, 2025, respectively, and $15.1 and $27.1 were recognized during the three and six months ended October 31, 2024, 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.

Restructuring Costs :

On May 27, 2025, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidate operations into other existing facilities by early calendar year 2026 to further optimize operations for our Sweet Baked Snacks segment.

During the first quarter of 2026, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidate operations into other existing facilities by early calendar year 2026 to further optimize operations for our Sweet Baked Snacks segment.

We anticipate incurring approximately $75.0 of costs related to these efforts, consisting of $60.0 in noncash charges for accelerated depreciation and $15.0 in employee-related and other transition and termination costs.

We have recognized total cumulative costs of $20.7, which included $4.2 and $16.5 of employee-related and other transition and termination costs, respectively, during the three months ended July 31, 2025.

We have recognized total cumulative costs of $47.9, which included $27.2 and $47.9 of employee-related and other transition and termination costs, during the three and six months ended October 31, 2025, respectively.

For further information on these costs, refer to Note 4:

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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 July 31,

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

2025 2024 % Increase

(Decrease) 2025 2024 % Increase

Retail Coffee $ 848.9 $ 704.0 21 % $ 1,566.1 $ 1,327.4 18 %

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Retail Coffee

Retail Coffee segment net sales increased $93.8 in the first three months of 2026.

Net price realization increased net sales by 18 percentage points, primarily driven by higher net pricing across the portfolio.

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 decreased $38.4, primarily reflecting higher commodity costs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.

Retail Coffee segment net sales increased $144.9 in the second quarter of 2026.

Net price realization increased net sales by 27 percentage points, reflecting higher net pricing across the portfolio.

Volume/mix decreased net sales by 6 percentage points, primarily reflecting decreases for the Folgers and Dunkin’ brands, partially offset by an increase for the Café Bustelo brand.

Segment profit decreased $48.4, primarily reflecting higher commodity costs, tariffs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.

Retail Coffee segment net sales increased $238.7 in the first six months of 2026.

Net price realization increased net sales by 23 percentage points, reflecting higher net pricing across the portfolio.

Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for the Folgers and Dunkin’ brands, partially offset by an increase for the Café Bustelo brand.

Segment profit decreased $86.8, primarily reflecting higher commodity costs, unfavorable volume/mix, tariffs, and higher marketing spend, partially offset by higher net price realization.

Retail Frozen Handheld and Spreads

Retail Frozen Handheld and Spreads segment net sales decreased $12.1 in the first three months of 2026.

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

Net price realization decreased net sales by 1 percentage point, reflecting higher trade spend for peanut butter, partially offset by higher net pricing for Uncrustables sandwiches.

Segment profit decreased $4.7, primarily driven by higher marketing spend and unfavorable volume/mix, partially offset by lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility.

Retail Frozen Handheld and Spreads segment net sales decreased $24.1 in the second quarter of 2026.

Volume/mix decreased net sales by 8 percentage points, primarily reflecting decreases for peanut butter, fruit spreads, and Uncrustables sandwiches.

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

Segment profit decreased $14.0, primarily driven by unfavorable volume/mix, higher marketing spend, and increased costs, partially offset by higher net price realization and lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility.

Retail Frozen Handheld and Spreads segment net sales decreased $36.2 in the first six months of 2026.

Volume/mix decreased net sales by 5 percentage points, primarily reflecting decreases for peanut butter and fruit spreads.

Net price realization contributed 1 percentage point to net sales, reflecting higher net pricing for Uncrustables sandwiches, partially offset by higher trade spend for peanut butter.

Segment profit decreased $18.7, primarily driven by unfavorable volume/mix, higher marketing spend, and increased costs, partially offset by lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility and higher net price realization.

Retail Pet Foods

Retail Pet Foods segment net sales decreased $31.7 in the first three months of 2026.

Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for dog snacks and lower contract manufacturing sales related to the divested pet food brands.

Retail Pet Foods segment net sales decreased $32.2 in the second quarter of 2026.

Volume/mix decreased net sales by 8 percentage points, primarily driven by a decrease for dog snacks and lapping contract manufacturing sales related to the divested pet food brands in the prior year.

Net price realization contributed 1 percentage point to net sales, reflecting higher net pricing across the portfolio.

Segment profit increased $3.0, primarily reflecting lower costs and higher net price realization, partially offset by unfavorable volume/mix.

Retail Pet Foods segment net sales decreased $63.9 in the first six months of 2026.

Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for dog snacks and lapping contract manufacturing sales related to the divested pet food brands in the prior year.

Net price realization was neutral to net sales.

Segment profit decreased $14.0, primarily reflecting unfavorable volume/mix and higher costs, partially offset by lower marketing spend.

Segment profit decreased $11.0, primarily reflecting unfavorable volume/mix, partially offset by higher net price realization and lower marketing spend.

Sweet Baked Snacks

The Sweet Baked Snacks segment net sales decreased $80.5 in the first three months of 2026, inclusive of the impact of $52.8 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands.

The Sweet Baked Snacks segment net sales decreased $59.4 in the second quarter of 2026, inclusive of the impact of $50.5 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands.

Excluding the noncomparable impact of the divestitures, net sales decreased $8.9, or 3 percent.

Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for snack cakes.

Net price realization decreased net sales by 2 percentage points, primarily reflecting lower net pricing for snack cakes.

Segment profit decreased $40.2 during the three months ended July 31, 2025, primarily reflecting the impact of noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, and higher costs.

Volume/mix decreased net sales by 2 percentage points, primarily reflecting decreases for snack cakes, private label products, and breakfast, partially offset by an increase for donuts.

Net price realization decreased net sales by 1 percentage point, primarily reflecting lower net pricing across the majority of the portfolio.

Segment profit decreased $48.8, primarily reflecting higher costs, the impact of noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, and higher marketing spend.

The Sweet Baked Snacks segment net sales decreased $139.9 in the first six months of 2026, inclusive of the impact of $103.3 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands.

Excluding the noncomparable impact of the divestitures, net sales decreased $36.6, or 7 percent.

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 1 percentage point, primarily reflecting lower net pricing for snack cakes.

Segment profit decreased $89.0, primarily reflecting higher costs, the impact of noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, lower net price realization, and higher marketing spend.

International and Away From Home

International and Away From Home net sales increased $18.7 in the first three months of 2026, including $0.2 of unfavorable foreign currency exchange.

International and Away From Home net sales increased $29.7 in the second quarter of 2026, including $1.6 of unfavorable foreign currency exchange.

Excluding the noncomparable impact of foreign currency exchange, net sales increased $31.3, or 10 percent.

Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee and portion control products.

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

Segment profit increased $16.9, primarily driven by higher net price realization and lower SD&A expenses, partially offset by higher costs.

Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee.

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

Segment profit increased $8.4, primarily driven by higher net price realization, lower SD&A expenses, and favorable volume/mix, partially offset by higher costs and tariffs.

International and Away From Home net sales increased $48.4 in the first six months of 2026, including $1.8 of unfavorable foreign currency exchange.

Excluding the noncomparable impact of foreign currency exchange, net sales increased $50.2, or 8 percent.

Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee.

Volume/mix was neutral to net sales as decreases for coffee, fruit spreads, and dog snacks were mostly offset by an increase for Uncrustables sandwiches.

Segment profit increased $25.3, primarily driven by higher net price realization, lower SD&A expenses, and favorable volume/mix, partially offset by higher costs and tariffs.

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 $39.3 at July 31, 2025, compared to $69.9 at April 30, 2025.

Total cash and cash equivalents decreased to $62.8 at October 31, 2025, compared to $69.9 at April 30, 2025.

The following table presents selected cash flow information.

Three Months Ended July 31,

Six Months Ended October 31,

Net cash provided by (used for) operating activities $ 335.9 $ 577.1

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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 $183.5 increase in cash used for operating activities in the first three months of 2026 was primarily driven by lower net income (loss) and the related impacts to income and other taxes, partially offset by lower working capital requirements in 2026.

The cash required to fund working capital decreased compared to the prior year, primarily driven by the timing of settling our derivative instruments, partially offset by an increase in cash used for inventories, reflecting higher inventory levels and input cost inflation in the current year.

Cash used for investing activities in the first three months of 2026 consisted primarily of an increase of $126.7 in our derivative cash margin account balances and $84.3 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities.

Cash used for investing activities in the first three months of 2025 consisted primarily of $123.7 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 $241.2 decrease in cash provided by operating activities in the first six months of 2026 was primarily driven by lower net income adjusted for noncash items in the current year and higher working capital requirements in 2026.

The cash required to fund working capital increased compared to the prior year, primarily driven by an increase in cash used for inventories, reflecting higher inventory levels and input cost inflation in the current year, and an increase in cash used for accounts payable due to timing of spend and payments, partially offset by increases in cash related to the timing of settling our derivative instruments and the change in trade receivables due to timing of sales and payments.

Cash used for investing activities in the first six months of 2026 consisted primarily of $150.6 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities, and an increase of $52.8 in our derivative cash margin account balances.

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 provided by financing activities in the first three months of 2026 consisted primarily of a net increase in short-term borrowings of $300.6, partially offset by dividend payments of $114.4.

Cash used for financing activities in the first three months of 2025 consisted primarily of dividend payments of $112.1, partially offset by a net increase in short-term borrowings of $96.2.

Cash used for financing activities in the first six months of 2026 consisted primarily of dividend payments of $231.2, partially offset by a net increase in short-term borrowings of $87.4.

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.

Supplier Financing Program

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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.

Participating suppliers can sell one or more of our payment obligations at their sole discretion.

We have no economic interest in a supplier’s decision to enter into these agreements.

Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements.

As of July 31, 2025, and April 30, 2025, $324.5 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers.

During the first three months of 2026 and 2025, we paid $340.9 and $422.6, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.

As of October 31, 2025, and April 30, 2025, $248.0 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers.

During the first six months of 2026 and 2025, we paid $679.6 and $818.8, 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 July 31, 2025.

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 July 31, 2025, as the likelihood of loss is not considered probable or reasonably estimable.

Accordingly, no loss contingency has been recorded for these matters as of October 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 following table presents our capital structure.

July 31, 2025 April 30, 2025

October 31, 2025 April 30, 2025

Short-term borrowings $ 748.2 $ 640.8

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

As of July 31, 2025, we had $952.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.65 percent.

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

As of October 31, 2025, we had $748.5 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 4.29 percent.

We are in compliance with all our debt covenants as of October 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 7:

Debt and Financing Arrangements.

Dividend payments were $114.4 and $112.1 in the first three months of 2026 and 2025, respectively, and dividends declared per share were $1.10 and $1.08 in the first three months of 2026 and 2025, respectively.

Dividend payments were $231.2 and $226.5 in the first six months of 2026 and 2025, respectively, and dividends declared per share were $2.20 and $2.16 in the first six months of 2026 and 2025, respectively.

The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.

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

The shares repurchased during the three months ended July 31, 2025 and 2024, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

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

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

The shares repurchased during the six months ended October 31, 2025 and 2024, consisted of shares repurchased from stock plan recipients in lieu of cash payments.

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

As of July 31, 2025, total cash and cash equivalents of $34.8 was held by our foreign subsidiaries, primarily in Canada.

As of October 31, 2025, total cash and cash equivalents of $58.1 was held by our foreign subsidiaries, primarily in Canada.

We have not repatriated foreign cash to the U.S.

during the first three months of 2026.

during the first six months of 2026.

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

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

NON-GAAP FINANCIAL MEASURES

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Non-GAAP financial measures exclude certain items affecting comparability that can significantly affect the year-over-year assessment of operating results, which include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results.

Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income (loss) 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.

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 can significantly impact our adjusted effective income tax rate.

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See page 23 for a reconciliation of net sales adjusted for certain noncomparable items to the comparable GAAP financial measure.

Three Months Ended July 31,

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

2025 2024 2025 2024

Gross profit reconciliation:

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Cost of products sold – special project costs

23.0 5.3 38.4 10.6

Adjusted gross profit $ 789.9 $ 879.7 $ 1,533.1 $ 1,712.2

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Amortization 50.2 55.8 100.4 111.8

Loss (gain) on divestitures – net — 260.8 — 260.8

Change in net cumulative unallocated derivative gains and losses (103.0) (11.7) 150.1 18.3

Cost of products sold – special project costs

23.0 5.3 38.4 10.6

Other special project costs 5.6 10.7 11.6 17.8

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Net income (loss) $ 241.3 $ (24.5) $ 197.4 $ 160.5

Income tax expense (benefit) (12.6) 61.0

Income tax expense 77.1 91.3 64.5 152.3

Amortization 50.2 55.8 100.4 111.8

Loss (gain) on divestitures – net — 260.8 — 260.8

Change in net cumulative unallocated derivative gains and losses (103.0) (11.7) 150.1 18.3

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Other special project costs 5.6 10.7 11.6 17.8

Other expense – special project costs 0.9 — 0.9 —

Adjusted income before income taxes $ 295.1 $ 387.7 $ 563.3 $ 732.1

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Adjusted income $ 224.3 $ 294.2 $ 427.7 $ 553.7

Weighted-average shares – assuming dilution (A)

Adjusted earnings per share – assuming dilution (A)

$ 1.90 $ 2.44

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

Further, for the three months ended July 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 6:

Earnings Per Share.

Weighted-average shares – assuming dilution 106.9 106.7 106.9 106.6

Adjusted earnings per share – assuming dilution $ 2.10 $ 2.76 $ 4.00 $ 5.19

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis