What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-02 compared with 2025-08-04 · 217 added, 276 removed, 222 unchanged (69% of the section changed)

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RESULTS OF OPERATIONS

Segment Changes

We operate in five reportable segments:

Beef, Pork, Chicken, Prepared Foods and International.

We measure segment profit as segment operating income (loss).

Previously, International was a non-reportable segment and was presented within International/Other.

Effective in the first quarter of fiscal 2026, International was identified as a reportable segment.

Our President and Chief Executive Officer is the Chief Operating Decision Maker ("CODM") of the Company.

Commencing in the first quarter of fiscal 2026, we no longer allocate corporate expenses and amortization to our segments as these items are no longer used by our CODM in assessing the performance of, and allocating resources to, the segments.

Segment operating income (loss) is now defined as Operating Income (Loss) less corporate expenses and amortization to account for these changes.

Corporate expenses are unallocated general and administrative costs, including the costs of corporate functions, that are shared across multiple segments.

Amortization includes amortization generated from intangible assets including brands and trademarks, customer relationships, supply arrangements, patents and intellectual property, land use rights and software.

All prior period amounts have been recast to reflect the new presentation of segment operating income (loss).

Description of the Company

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We Feed the World Like Family TM and has a broad portfolio of iconic products and brands including Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells® and ibp®.

Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, sustainably, and affordably, now and for future generations.

Tyson Foods is dedicated to bringing high-quality food to every table in the world, safely, and affordably, now and for future generations.

Some of the key factors influencing our business are customer demand for our products;

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and operating efficiencies of our facilities.

We operate in four reportable segments:

Beef, Pork, Chicken, and Prepared Foods.

We measure segment profit as operating income (loss).

International/Other primarily includes our foreign operations in China, Malaysia, Mexico, South Korea, Thailand and the Kingdom of Saudi Arabia, third-party merger and integration costs and corporate overhead related to Tyson New Ventures, LLC.

Sales grew 4%, or $531 million in the third quarter of fiscal 2025, driven by sales growth across each of our segments.

Operating income of $260 million for the third quarter of fiscal 2025 was down 24% as compared to the third quarter of fiscal 2024, as we experienced greater operating losses in our Beef segment, partially offset by higher operating income in our Pork, Chicken and Prepared Foods segments.

In the third quarter of fiscal 2025, our operating income was impacted by $343 million of goodwill impairment charges, partially offset by $83 million of income, net of charges, related to the Company's network optimization plan and related gain on the sale of storage facilities.

In the third quarter of fiscal 2024, our operating income was impacted by $101 million in legal contingency accruals and $41 million in plant closures and disposal charges.

Sales grew 2%, or $837 million, in the first nine months of fiscal 2025, driven by increased sales in our Beef, Chicken and Prepared Foods segments, partially offset by decreased sales in our Pork segment.

Operating income of $940 million for the first nine months of fiscal 2025 was up 6% compared to the first nine months of fiscal 2024 as we experienced higher operating income in our Chicken and Prepared Foods segments and International/Other, partially offset by lower operating income in our Beef and Pork segments.

In the first nine months of fiscal 2025, our operating income was impacted by $343 million of goodwill impairment charges, $343 million of legal contingency accruals, $33 million of charges related to the network optimization plan and $23 million of plant closures and disposal charges.

In the first nine months ended June 29, 2024, our operating income was impacted by $174 million in legal contingency accruals, $155 million of plant closure and disposal charges, $83 million of costs related to a production facility fire in the Netherlands and the subsequent decision to sell the facility and $31 million of restructuring and related charges.

Sales grew 5%, or $690 million in the first quarter of fiscal 2026, driven by increased sales in our Beef, Chicken and Prepared Foods segments, partially offset by decreased sales in our Pork and International segments.

Operating income of $302 million for the first quarter of fiscal 2026 was down 48% as compared to the first quarter of fiscal 2025, as we experienced lower segment operating income in our Beef, Pork and Chicken segments, partially offset by higher segment operating income in our Prepared Foods segment and lower corporate expenses and amortization.

In the first quarter of fiscal 2026, our operating income was impacted by $115 million of restructuring and related charges and $155 million of legal contingency accruals.

In the first quarter of fiscal 2025, our operating income was impacted by $73 million of restructuring and related charges and $6 million in brand and product line discontinuation charges.

Market Environment

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) decreased 1% in the third quarter of fiscal 2025 as compared to the same period in fiscal 2024.

According to the United States Department of Agriculture, domestic protein production (beef, pork, chicken and turkey) remained relatively flat in the first quarter of fiscal 2026 as compared to the same period in fiscal 2025.

The Beef segment continues to experience limited supply of market-ready cattle as well as increased cattle costs.

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The Pork segment experienced sufficient supply of market-ready hogs and increased hog costs.

The Chicken segment experienced reduced feed ingredient costs in the first nine months of fiscal 2025, but costs began to moderate in the third quarter of fiscal 2025 as compared to the same period in fiscal 2024.

The Chicken segment experienced reduced feed ingredient costs in the first three months of fiscal 2026.

The Prepared Foods segment is currently experiencing increased raw material costs primarily due to higher meat costs.

Additionally, the International segment is currently experiencing increased raw material costs.

We are subject to changes in import and export policies, including trade restrictions, new or increased tariffs or quotas, and customs restrictions through our international sales and operations.

Our exports account for less than 10% of our business, primarily composed of chicken leg quarters and paws, boxed beef and variety meats of all proteins.

As a result of the recent changes in trade policies and tariffs both domestically and internationally, we may experience some sales disruptions and other impacts associated with tariffs.

There is uncertainty regarding the impact the current changes will have on the price and demand of our products in the affected countries, commodity pricing and other general economic conditions, and uncertainty in future changes that may have a material impact.

We will continue to analyze the impact of supply chain and tariff impacts in the upcoming months.

Our total operating margin was 1.9% in the third quarter of fiscal 2025.

Operating margins by segment were as follows:

As a result of changes in trade policies and tariffs both domestically and internationally, we may experience some sales disruptions and other impacts associated with tariffs.

There is uncertainty regarding the impact changes may have on the price and demand of our products in the affected countries, commodity pricing and other general economic conditions, and uncertainty in future changes that may have a material impact.

Our total operating margin was 2.1% in the first quarter of fiscal 2026.

Segment operating margins were as follows:

• Beef – (5.5)%

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• Prepared Foods – 12.0%

• International – 7.0%

We are a world-class food company and recognized leader in protein.

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and scale in international markets by delivering profitable value-added food offerings in high growth categories.

In the first quarter of fiscal 2025, the Company initiated a network optimization plan to optimize our global operations and logistics network.

We anticipate we will recognize total pretax charges of $84 million related to actions approved through June 28, 2025.

We recognized charges of $24 million and $33 million in the third quarter and first nine months of fiscal 2025, respectively, related to the network optimization plan, which primarily included the closure of two facilities in the Prepared Foods segment, a non-harvesting facility closure in the Beef segment, asset write-offs in the Chicken and Prepared Foods segments and International/Other.

Additionally, in the third quarter of fiscal 2025, we recognized a $107 million gain from the sale of storage facilities.

Approved charges that have been recognized through June 28, 2025 included $51 million that have resulted or will result in cash outflows and $89 million of non-cash charges.

We have also received $252 million of proceeds in the first nine months of fiscal 2025 associated with the sale of storage facilities.

Commencing in fiscal 2025, the Company initiated a network optimization plan to optimize our global operations and logistics network.

In the first quarter of fiscal 2026, the Company approved additional actions under the network optimization plan, increasing the estimated total pretax charges by $140 million.

This increase reflects network changes in the Beef segment, including the closure of a harvesting facility and the transition to a single shift at another, as well as efforts to reduce support costs across all segments and corporate functions.

As a result, we now expect to recognize total pretax net charges of $226 million for actions approved through December 27, 2025, which include $148 million of net charges that have resulted or will result in cash outflows and $185 million of non-cash charges, partially offset by $107 million gain recognized from the sale of storage facilities.

Additionally, we have received $294 million in proceeds associated with the sale of storage facilities to date, of which, $42 million was received in the first quarter of fiscal 2026.

Through the first quarter of fiscal 2026, we have recognized $162 million of the expected total pretax charges and estimate $64 million of charges will be incurred over future periods, including $44 million during the remainder of fiscal 2026.

We expect to incur costs related to the network optimization plan over a multi-year period.

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Summary of Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Sales $ 14,313 $ 13,623

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Sales growth 5.1 %

Third quarter – Fiscal 2025 vs Fiscal 2024

• Sales Volume – Volumes were relatively flat, accounting for a $9 million change as decreased sales volume in our Beef and Prepared Foods segments, was mostly offset by increased sales volume in our Chicken and Pork segments.

• Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $495 million, driven by increased pricing in our Beef, Chicken and Prepared Foods segments, partially offset by lower average sales prices in our Pork segment.

◦ The above changes in average sales price exclude a $45 million reduction of Sales for the recognition of a legal contingency accrual recorded in the third quarter of fiscal 2024.

Nine months – Fiscal 2025 vs Fiscal 2024

• Sales Volume – Sales were positively impacted by an increase in sales volume, which accounted for a $196 million increase in sales driven by increased sales volume in our Chicken and Beef segments, partially offset by decreased sales volume in our Pork and Prepared Foods segments.

• Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $939 million, driven by increased pricing in our Beef, Pork and Prepared Foods segments, while pricing in our Chicken segment was flat.

◦ The above changes in average sales price exclude a $343 million and $45 million reduction of Sales from the recognition of legal contingency accruals for the nine months ended June 28, 2025 and June 29, 2024, respectively.

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales Volume – Volumes were relatively flat, accounting for a $43 million reduction as decreased sales volume in our Beef and International segments was mostly offset by increased sales volume in our Pork, Chicken, and Prepared Foods segments.

• Average Sales Price – Sales were positively impacted by higher average sales prices, which accounted for an increase of $883 million, driven by increased pricing in our Beef, Pork, Prepared Foods and International segments, partially offset by lower average sales prices in our Chicken segment.

• The above changes in average sales price exclude a $150 million reduction of Sales for the recognition of legal contingency accruals recorded in the first quarter of fiscal 2026.

Cost of Sales

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Cost of sales $ 13,505 $ 12,528

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Cost of sales as a percentage of sales 94.4 % 92.0 %

Third quarter – Fiscal 2025 vs Fiscal 2024

First quarter – Fiscal 2026 vs Fiscal 2025

• Cost of sales increased $977 million.

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• Increase in raw material and other input costs of approximately $110 million in our Prepared Foods segment.

• Increase due to net derivative losses of $19 million in the third quarter of fiscal 2025, compared to net derivative gains of $6 million in the third quarter of fiscal 2024 due to our risk management activities.

These amounts exclude offsetting impacts from related physical purchase transactions, which are included in the change in live cattle and hog costs and raw material and feed ingredient costs described herein.

• Increase in hog costs of approximately $50 million in our Pork segment.

• Decrease of $83 million related to the network optimization plan as a result of a gain recognized on the sale of storage facilities, net of charges.

• Decrease of $56 million related to the recognition of a legal contingency accrual in our Chicken segment in fiscal 2024.

• Decrease of $41 million due to lower plant closures and disposal charges.

• Decrease in freight and transportation costs of approximately $30 million.

• Decrease of approximately $20 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease of $17 million in International/Other from lower net costs related to a production facility fire in the Netherlands and the subsequent decision to sell the facility.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes and lower operating costs.

Nine months – Fiscal 2025 vs Fiscal 2024

• Cost of sales increased $568 million.

Higher sales volume increased cost of sales by $184 million while higher input cost per pound increased cost of sales by $384 million.

• The $384 million impact of higher input cost per pound was impacted by:

• Increase in cattle costs of approximately $1,070 million in our Beef segment.

• Increase in raw material and other input costs of approximately $220 million in our Prepared Foods segment.

• Increase in hog costs of approximately $175 million in our Pork segment.

• Increase of $31 million related to the network optimization plan charges.

• Increase of $19 million in our Chicken segment from reduced insurance proceeds, net of costs, related to a production facility fire in the fourth quarter of fiscal 2021.

• Increase of $34 million related to restructuring and related charges.

• Decrease of approximately $50 million in our Chicken segment related to decreased feed ingredient costs.

• Decrease of $132 million due to lower plant closures and disposal charges.

• Decrease of $129 million related to the recognition of legal contingency accruals in our Beef, Pork and Chicken segments in fiscal 2024.

• Decrease in freight and transportation costs of approximately $100 million.

• Decrease of $97 million in International/Other from lower net costs related to a production facility fire in the Netherlands and the subsequent decision to sell the facility.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes and lower operating costs.

• Remaining decrease in costs across all of our segments primarily driven by net impacts on average cost per pound from mix changes.

Selling, General and Administrative

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Selling, general and administrative expense $ 506 $ 515

As a percentage of sales 3.5 % 3.8 %

Third quarter – Fiscal 2025 vs Fiscal 2024

• Selling, general and administrative was relatively flat.

Nine months – Fiscal 2025 vs Fiscal 2024

First quarter – Fiscal 2026 vs Fiscal 2025

• Decrease of $9 million in selling, general and administrative was primarily driven by:

• Decrease of $36 million in employee costs primarily from performance-based compensation.

• Decrease of $13 million in team member costs.

• Decrease of $8 million in professional fees.

• Decrease of $33 million in marketing, advertising and promotion expenses.

• Decrease of $31 million in restructuring and related costs.

Goodwill Impairment

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Goodwill Impairment $ 343 $ — $ 343 $ —

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• We recorded a $343 million goodwill impairment charge in the Beef segment in the third quarter of fiscal 2025.

• Decrease of $7 million related to a gain on the sale of a corporate asset.

• Increase of $20 million in marketing, advertising and promotion expenses.

Interest (Income) Expense

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Interest income $ (13) $ (25)

Interest expense 104 120

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• The decrease in interest income for the third quarter and nine months ended June 28, 2025 was primarily due to average lower cash and cash equivalents held.

• The decrease in interest expense for the three and nine months ended June 28, 2025 was primarily due to lower interest expense related to the repayment of the term loan due May 2026 in the second quarter of fiscal 2025 and the repayment of the August 2024 senior notes in the fourth quarter of fiscal 2024.

First quarter – Fiscal 2026 vs Fiscal 2025

• The decrease in interest income for the three months ended December 27, 2025 was primarily due to average lower cash and cash equivalents held.

• The decrease in interest expense for the three months ended December 27, 2025 was primarily due to lower interest expense related to the repayment of term loans in fiscal 2025.

Other (Income) Expense, net

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Total other (income) expense, net $ 84 $ 7

Third quarter and nine months – Fiscal 2025

• Included $23 million of joint venture earnings and $11 million of foreign exchange gains in the third quarter of fiscal 2025.

Included $50 million of joint venture earnings and $7 million of production facilities fire insurance proceeds, partially offset by $7 million of foreign exchange losses in the first nine months of fiscal 2025.

Third quarter and nine months – Fiscal 2024

• Included $19 million and $22 million of joint venture earnings in the third quarter and the first nine months of fiscal 2024, respectively, offset by $9 million and $4 million of foreign exchange losses in the third quarter and the first nine months of fiscal 2024, respectively.

Additionally, included $14 million of income related to an amendment of a postretirement benefit plan in the first nine months of fiscal 2024.

First quarter – Fiscal 2026

• Included $75 million of impairment of equity investments and $5 million of joint venture losses in the first quarter of fiscal 2026.

First quarter – Fiscal 2025

• Included $24 million of foreign exchange losses, partially offset by $12 million of joint venture earnings and $7 million of production facilities fire insurance proceeds.

Effective Tax Rate

Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Three Months Ended

December 27, 2025 December 28, 2024

29.7 % 23.5 %

Third quarter – Fiscal 2025 vs Fiscal 2024

• The third quarter of fiscal 2025 was higher than the third quarter of fiscal 2024 primarily due to a $343 million non-deductible goodwill impairment, partially offset by the favorable impact of higher foreign income in fiscal 2025.

• Additionally, the third quarter of fiscal 2024 included a $9 million benefit related to the remeasurement of deferred income taxes, primarily due to legislation decreasing state tax rates enacted in the third quarter of 2024.

Nine months – Fiscal 2025 vs Fiscal 2024

• The effective tax rate for the first nine months of fiscal 2025 was higher than the first nine months of fiscal 2024 due to a $343 million non-deductible goodwill impairment, partially offset by the favorable impact of higher foreign income in fiscal 2025.

First quarter – Fiscal 2026 vs Fiscal 2025

• The effective tax rates for both periods were increased by state taxes and net unfavorable permanent book-to-tax differences, partially offset by various tax benefits.

Additionally, the effective tax rate for the first quarter of fiscal 2026 was increased by estimated foreign withholding tax on the repatriation of earnings of foreign subsidiaries, and the effective tax rate for the first quarter of fiscal 2025 was decreased by the release of a $9 million valuation allowance on certain losses in the Netherlands due to newly enacted tax legislation.

Net Income Attributable to Tyson

in millions, except per share data Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

in millions, except per share data Three Months Ended

December 27, 2025 December 28, 2024

Net income attributable to Tyson $ 85 $ 359

Net income attributable to Tyson – per diluted share 0.24 1.01

Third quarter – Fiscal 2025 – Net income attributable to Tyson included the following items:

• $343 million pretax, or ($0.96) per diluted share, of goodwill impairment charges (non-tax deductible).

• $83 million pretax, or $0.18 per diluted share, related to the network optimization plan income, net of charges.

• $14 million pretax, or $0.04 per diluted share, of insurance proceeds, net of costs, related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

• $6 million pretax, or $0.01 per diluted share, related to the relocation of a production facility in China.

• $5 million pretax, or ($0.01) per diluted share, of brand discontinuation charges.

Nine months – Fiscal 2025 – Net income attributable to Tyson included the following items:

• $343 million pretax, or ($0.96) per diluted share, of goodwill impairment charges (non-tax deductible).

• $343 million pretax, or ($0.73) per diluted share, related to the recognition of legal contingency accruals.

• $33 million pretax, or ($0.08) per diluted share, related to the network optimization plan charges.

• $23 million pretax, or ($0.05) per diluted share, of plant closures and disposal charges.

• $17 million pretax, or ($0.04) per diluted share, of brand discontinuation charges.

• $14 million pretax, or $0.04 per diluted share, of insurance proceeds, net of costs, related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

• $7 million pretax, or $0.01 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $6 million pretax, or $0.01 per diluted share, related to the relocation of a production facility in China.

• $9 million post tax, or $0.03 per diluted share, of benefit due to newly enacted tax legislation that resulted in the release of a valuation allowance on losses related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

Third quarter – Fiscal 2024 – Net income attributable to Tyson included the following items:

• $101 million pretax, or ($0.22) per diluted share, related to the recognition of legal contingency accruals.

• $41 million pretax, or ($0.09) per diluted share, of charges related to plant closures and disposal charges.

• $5 million pretax, or ($0.01) per diluted share, of production facilities fire costs incurred, net of insurance proceeds.

• $3 million pretax, or ($0.01) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

Nine months – Fiscal 2024 – Net income attributable to Tyson included the following items:

• $174 million pretax, or ($0.38) per diluted share, related to the recognition of legal contingency accruals.

• $155 million pretax, or ($0.31) per diluted share, of charges related to plant closures and disposal charges.

• $83 million pretax, or ($0.23) per diluted share, of charges related to a production facility fire in the Netherlands and our subsequent decision to sell the facility.

First quarter – Fiscal 2026 – Net income attributable to Tyson included the following items:

• $155 million pretax, or ($0.33) per diluted share, of legal contingency accruals.

• $117 million pretax, or ($0.25) per diluted share, of restructuring and related charges.

• $22 million pretax, or $0.05 per diluted share, of production facilities fire insurance proceeds, net of costs incurred.

• $73 million pretax, or ($0.15) per diluted share, related to an impairment of equity investments.

First quarter – Fiscal 2025 – Net income attributable to Tyson included the following items:

• $73 million pretax, or ($0.16) per diluted share, of restructuring and related charges.

• $6 million pretax, or ($0.01) per diluted share, of brand and product line discontinuation charges.

• $7 million pretax, or $0.04 per diluted share, of production facilities fire insurance proceeds.

Segment Results

We operate in four segments:

Beef, Pork, Chicken, and Prepared Foods.

The following table is a summary of sales and operating income (loss), which is how we measure segment profit.

We operate in five segments:

Beef, Pork, Chicken, Prepared Foods and International.

The following table is a summary of sales and segment operating income (loss), which is how we measure segment profit.

Commencing in the first quarter of fiscal 2026, Segment operating income (loss) is defined as Operating Income (Loss) less corporate expenses and amortization to account for these changes.

Corporate expenses are unallocated general and administrative costs, including the costs of corporate functions, that are shared across multiple segments.

All prior period amounts have been recast to reflect the new presentation of segment operating income (loss).

in millions Sales

Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Three Months Ended

December 27, 2025 December 28, 2024

Beef $ 5,771 $ 5,335

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Prepared Foods 2,673 2,473

International/Other 557 582 1,707 1,744

International 582 584

Intersegment sales (534) (451)

Total $ 14,313 $ 13,623

in millions Operating Income (Loss)

Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

$ (494) $ (69) $ (816) $ (310)

36 (62) (100) (24)

367 244 980 579

Prepared Foods (d)

302 203 755 676

International/Other (e)

49 25 121 (37)

in millions Segment Operating Income (Loss)

Three Months Ended

December 27, 2025 December 28, 2024

Beef $ (319) $ (26)

Chicken 450 460

Prepared Foods 322 297

International 41 41

Total $ 544 $ 845

(a) Beef segment results for the three and nine months ended June 28, 2025 included $343 million of goodwill impairment charges.

Additionally, Beef segment results for the nine months ended June 28, 2025 included a $93 million legal contingency accrual and $48 million of network optimization plan charges.

Beef segment results for the nine months ended June 29, 2024 included a $45 million legal contingency accrual and $41 million of plant closures and disposal charges.

(b) Pork segment results for the nine months ended June 28, 2025 included a $250 million legal contingency accrual.

Pork segment results for the three and nine months ended June 29, 2024 included $39 million and $73 million, respectively, of plant closures and disposal charges.

Additionally, Pork segment results for the three and nine months ended June 29, 2024 included $45 million and $73 million, respectively, related to the recognition of legal contingency accruals.

(c) Chicken segment results for the three and nine months ended June 28, 2025 included $5 million and $17 million, respectively, of brand discontinuation charges and network optimization plan income, net of charges, of $27 million, and network optimization plan net charges of $5 million, respectively.

Chicken segment results for the nine months ended June 28, 2025 included $23 million of plant closures and disposal charges.

Chicken segment results for the three and nine months ended June 29, 2024 included $2 million and $41 million, respectively, of plant closures and disposal charges and $5 million of production facility fire costs incurred, net of insurance proceeds, and $19 million of insurance proceeds, net of costs incurred, respectively.

Chicken segment results for the three and nine months ended June 29, 2024 also included a $56 million legal contingency accrual.

(d) Prepared Foods segment results for the three and nine months ended June 28, 2025 included a gain, net of charges, of $56 million and $31 million, respectively, related to the network optimization plan.

Prepared Foods segment results for the nine months ended June 29, 2024 included $24 million of restructuring and related charges.

(e) International/Other results for the three and nine months ended June 28, 2025 included benefits of $14 million of insurance proceeds, net of costs, related to a fire at a production facility in the Netherlands and our subsequent decision to sell the facility and $6 million related to the relocation of a production facility in China.

International/Other results for the nine months ended June 28, 2025 included $11 million of network optimization plan charges.

International/Other results for the three and nine months ended June 29, 2024 included $3 million and $83 million, respectively, of costs, net of insurance proceeds, related to a fire at our production facility in the Netherlands and subsequent decision to sell.

Corporate Expenses (188) (201)

Amortization (54) (64)

Operating Income (Loss) $ 302 $ 580

Items affecting comparability include restructuring and related charges (including network optimization), plant closures and disposal charges (net of gains), goodwill and intangible impairments, brand and product line discontinuations, facility fire related costs (net of insurance proceeds), and certain non-ordinary course legal, regulatory and other matters.

The following table is a summary of the expenses impacting comparability by segment, corporate expenses and amortization (in millions):

Segment Operating Income (Loss) Operating Income (Loss)

Beef Pork Chicken Prepared Foods Inter- national Corporate Expenses Amortiza- tion Total

First Quarter of Fiscal 2026

Legal contingency accruals $ 90 $ 60 $ — $ — $ 5 $ — $ — $ 155

Restructuring and related charges 86 1 9 16 — 3 — 115

First Quarter of Fiscal 2025

Restructuring and related charges 32 — 11 25 5 — — 73

Brand and product line discontinuations — — — — — — 6 6

Beef Segment Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 Change June 28, 2025 June 29, 2024 Change

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Sales $ 5,771 $ 5,335 $ 436

1 unchanged sentence

Average sales price change 17.2 %

Operating income (loss) $ (494) $ (69) $ (425) $ (816) $ (310) $ (506)

Operating margin (8.8) % (1.3) % (5.1) % (2.0) %

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• Sales Volume - Sales volume decreased in the third quarter of fiscal 2025 primarily due to lower head harvested, partially offset by higher average carcass weights.

Sales volume for the first nine months were relatively flat as higher average carcass weights were offset by lower head harvested.

• Average Sales Price - Average sales price increased in the third quarter and first nine months of fiscal 2025 primarily due to increased input costs and strong demand.

The change in average sales price for the first nine months of fiscal 2025 excludes a $93 million reduction of Sales from the recognition of a legal contingency accrual recorded in the second quarter of fiscal 2025.

• Operating Income (Loss) - Operating loss increased in the third quarter and first nine months of fiscal 2025 due to compressed Beef margins and the recognition of a goodwill impairment charge, partially offset by improved operational execution.

Additionally, the operating loss increase for the first nine months of fiscal 2025 was impacted by the recognition of a legal contingency accrual and network optimization plan charges in fiscal 2025, partially offset by lapping the impacts of plant closures and disposal charges recorded in the first nine months of fiscal 2024.

Segment operating income (loss) $ (319) $ (26) $ (293)

Segment operating margin (5.5) % (0.5) %

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales Volume - Sales volume decreased due to lower head harvested related to reduced cattle availability, partially offset by higher average carcass weights.

• Average Sales Price - Average sales price increased primarily due to increased input costs and strong demand.

The change in average sales price excludes a $90 million reduction of Sales from the recognition of a legal contingency accrual recorded in fiscal 2026.

• Segment Operating Income (Loss) - Segment operating loss increased due to compressed Beef margins and increased restructuring and related charges in addition to the recognition in the first quarter of fiscal 2026 of a legal contingency accrual and a $30 million inventory lower of cost or net realizable value adjustment.

Pork Segment Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 Change June 28, 2025 June 29, 2024 Change

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Sales $ 1,609 $ 1,617 $ (8)

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Average sales price change 1.6 %

Operating income (loss) $ 36 $ (62) $ 98 $ (100) $ (24) $ (76)

Operating margin 2.4 % (4.2) % (2.3) % (0.5) %

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• Sales Volume - Sales volume increased in the third quarter of fiscal 2025 due to a sell-through of inventory.

Sales volume decreased in the first nine months of fiscal 2025 due to production decreases associated with a plant closure in 2024 which were partly offset by production increases at other facilities and higher average carcass weights.

• Average Sales Price - Average sales price decreased in the third quarter of fiscal 2025 primarily driven by changes in mix.

Average sales price increased in first nine months of fiscal 2025 due to increased input costs and strong demand for our pork products.

The change in average sales price for the nine months ended excludes a $250 million reduction of Sales from the recognition of a legal contingency accrual recorded in the second quarter of fiscal 2025.

The change in average sales price for both the three months ended and nine months ended excludes a $45 million reduction of Sales from the recognition of a legal contingency accrual recorded in the second quarter of fiscal 2024.

• Operating Income (Loss) - Operating income increased in the third quarter of fiscal 2025 due to lower operating costs, improved results in our live hog operations and lapping the impacts of a legal contingency accrual and plant closures and disposal charges recorded in the third quarter of fiscal 2024, partially offset by compressed pork margins.

Operating loss increased in first nine months of fiscal 2025 due to compressed pork margins and the recognition of a legal contingency accrual, partially offset by lower operating costs, improved results in our live hog operations and lapping the impacts of plant closures and disposal charges recorded in the first nine months of fiscal 2024.

Segment operating income $ 50 $ 73 $ (23)

Segment operating margin 3.1 % 4.5 %

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales Volume - Sales volume increased due to higher head harvested and higher average carcass weights.

• Average Sales Price - Average sales price increased due to higher input costs and strong demand for our pork products.

The change in average sales price excludes a $60 million reduction of Sales from the recognition of a legal contingency accrual recorded in fiscal 2026.

• Segment Operating Income - Segment operating income decreased in the first quarter of fiscal 2026 as the recognition of a legal contingency accrual, which was partially offset by $35 million of net derivative gains, more than offset the improved performance.

Chicken Segment Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 Change June 28, 2025 June 29, 2024 Change

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Sales $ 4,212 $ 4,065 $ 147

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Average sales price change (0.1) %

Operating income $ 367 $ 244 $ 123 $ 980 $ 579 $ 401

Operating margin 8.7 % 6.0 % 7.9 % 4.8 %

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• Sales Volume - Sales volume increased in the third quarter and first nine months of fiscal 2025 primarily due to increased domestic production.

• Average Sales Price - Average sales price increased in the third quarter due to mix and strong demand.

Average sales price remained relatively flat in the first nine months of fiscal 2025 as the impact of lower input costs was offset by strong demand.

• Operating Income - Operating income increased in the third quarter and first nine months of fiscal 2025 driven by operational execution, improved volumes and $20 million and $285 million of net decreases in feed ingredient costs, respectively, which was partially offset by increased marketing, advertising and promotion expenses.

Additionally, operating income in the third quarter was impacted by reduced legal contingency accruals and net gains recognized from the network optimization plan, which included a gain from the sale of storage facilities net of other plan charges.

The operating income increase in the first nine months of fiscal 2025 was also impacted by reduced legal contingency accruals and lower plant closures and disposal charges, partially offset by brand discontinuation charges, network optimization plan charges and lapping of insurance proceeds related to a production facility fire.

Segment operating income $ 450 $ 460 $ (10)

Segment operating margin 10.7 % 11.3 %

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales Volume - Sales volume increased primarily due to increased domestic production and reduced inventory levels.

• Average Sales Price - Average sales price remained relatively flat as the impact of pricing was mostly offset by mix.

• Segment Operating Income - Segment operating income decreased primarily due to lower pricing, partially offset by increased sales volumes and lower feed ingredient costs.

Prepared Foods Segment Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 Change June 28, 2025 June 29, 2024 Change

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Sales $ 2,673 $ 2,473 $ 200

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Average sales price change 7.9 %

Operating income $ 302 $ 203 $ 99 $ 755 $ 676 $ 79

Operating margin 12.0 % 8.3 % 10.2 % 9.2 %

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• Sales Volume – Sales volume decreased in the third quarter and first nine months of fiscal 2025 due to a challenging consumer environment.

• Average Sales Price – Average sales price increased in the third quarter and first nine months of 2025 primarily due to the pass through of increased raw material costs.

• Operating Income – Operating income increased in the third quarter and first nine months of fiscal 2025 primarily due to higher average sales price and improved operational execution, partly offset by increased raw material costs.

Additionally, operating income increased in the first nine months of fiscal 2025 due to lower freight costs, selling, general and administrative costs and restructuring and related charges.

For the third quarter and first nine months of fiscal 2025, operating income also benefited from net gains recognized from the network optimization plan, which included a gain from the sale of storage facilities net of other plan charges.

International/Other Results

in millions Three Months Ended Nine Months Ended

June 28, 2025 June 29, 2024 Change June 28, 2025 June 29, 2024 Change

Segment operating income $ 322 $ 297 $ 25

Segment operating margin 12.0 % 12.0 %

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales Volume – Sales volume was a slight increase driven by growth in retail.

• Average Sales Price – Average sales price increased due to the pass through of increased raw material costs and sales channel mix.

• Segment Operating Income – Segment operating income increased primarily due to higher average sales price and improved operational execution, partially offset by increased raw material costs and increased marketing, advertising and promotional spend.

The first quarter of fiscal 2026 segment operating income also benefited from reduced restructuring and related costs as compared to the first quarter of fiscal 2025.

International Segment Results

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Sales $ 582 $ 584 $ (2)

Operating income (loss) 49 25 24 121 (37) 158

Third quarter and nine months – Fiscal 2025 vs Fiscal 2024

• Sales – Sales for the third quarter and first nine months of fiscal 2025 decreased primarily due to lower average sales price.

• Operating Income (Loss) – Operating income increased in the third quarter and first nine months of fiscal 2025 primarily due to improved performance, insurance proceeds and lapping the charges related to a production facility fire in the first quarter of fiscal 2024 and the subsequent decision to sell the facility and remuneration received related to the relocation of a production facility in China.

Sales Volume Change (0.8) %

Average Sales Price Change 0.5 %

Segment operating income $ 41 $ 41 $ —

Segment operating margin 7.0 % 7.0 %

First quarter – Fiscal 2026 vs Fiscal 2025

• Sales – Sales were relatively flat as the slight decrease in sales volumes was offset by average sales price.

• Segment Operating Income – Segment operating income remained flat primarily due to improved performance offset by increased costs.

Segment operating income also benefited from lapping restructuring and related costs in fiscal 2025, offset by the recognition of a legal contingency accrual in fiscal 2026.

Corporate Expenses and Amortization

in millions Three Months Ended

December 27, 2025 December 28, 2024 Change

Corporate Expenses $ (188) $ (201) $ 13

Amortization (54) (64) 10

First quarter – Fiscal 2026 vs Fiscal 2025

• Corporate Expenses – Corporate expenses decreased primarily due to $13 million of lower team member costs and a $7 million gain on the sale of a corporate asset, partially offset by higher technology expenses.

• Amortization - Amortization decreased primarily due to the lapping of $6 million of accelerated amortization related to brand and product line discontinuation charges in the first quarter of fiscal 2025.

LIQUIDITY AND CAPITAL RESOURCES

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Cash Flows from Operating Activities

in millions Nine Months Ended

June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Net income $ 90 $ 366

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Net cash provided by operating activities $ 942 $ 1,031

• Non-cash items in net income primarily included depreciation and amortization of $1,029 million and $1,082 million for the nine months ended June 28, 2025 and June 29, 2024, respectively, and a $343 million goodwill impairment in the first nine months of fiscal 2025.

• Cash provided by operating activities for the first nine months of fiscal 2025 was $1,620 million, a decrease of $353 million compared to the first nine months of fiscal 2024, as the $103 million of higher earnings, net of non-cash items, was more than offset by a $456 million decrease in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• A decrease of $443 million due to an increase in inventory of $194 million in the first nine months of fiscal 2025, compared to a decrease of $249 million in the first nine months of fiscal 2024, primarily due to increased average cost of inventory and higher volume of livestock.

• A decrease of $228 million due to a decrease in the net changes in other operating assets and liabilities of $13 million in the first nine months of fiscal 2025, compared to an increase of $215 million in the first nine months of 2024, primarily due to performance-based compensation.

• A decrease of $121 million due to an increase in accounts receivable of $48 million in the first nine months of fiscal 2025, compared to a decrease of $73 million in the first nine months of fiscal 2024 as days sales outstanding decreased more during the first nine months of fiscal 2024 than the first nine months of fiscal 2025.

• Partially offset by:

• An increase of $247 million due to a decrease in accounts payable of $5 million during the first nine months of fiscal 2025, compared to a decrease of $252 million in the first nine months of fiscal 2024, primarily due to a reduction in accounts payable in fiscal 2024 associated with lower input costs.

• Non-cash items in net income primarily included depreciation and amortization of $376 million and $348 million for the three months ended December 27, 2025 and December 28, 2024, respectively, and impairment of equity investments of $75 million for the three months ended December 27, 2025.

• Cash provided by operating activities for the first three months of fiscal 2026 was $942 million, a decrease of $89 million compared to the first three months of fiscal 2025, as the $161 million of lower earnings, net of non-cash items, was partially offset by a $72 million increase in cash provided by the net changes in operating assets and liabilities which was primarily impacted by:

• An increase of $124 million due to a decrease in inventory of $181 million in the first three months of fiscal 2026, compared to a decrease of $57 million in the first three months of fiscal 2025, primarily due to lower volume of livestock and decreased average cost of inventory.

Cash Flows from Investing Activities

in millions Nine Months Ended

June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Additions to property, plant and equipment $ (252) $ (271)

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Proceeds from sale of storage facilities 42 —

Acquisition of equity investments (5) (28)

Other, net 28 37

Net cash used for investing activities $ (183) $ (233)

• Additions to property, plant and equipment included spending for production growth, safety and animal well-being, new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities.

• We expect capital expenditures at or below $1 billion for fiscal 2025.

• Additions to property, plant and equipment included spending for production growth, safety, animal well-being, new equipment, infrastructure replacements and upgrades to maintain competitive standing and position us for future opportunities.

• We expect capital expenditures of $0.7 billion to $1.0 billion in fiscal 2026.

Capital expenditures include investments in profit improvement projects as well as projects for maintenance and repair.

This includes completion of capacity expansion projects as well as new equipment, automation technology and processes for product innovation.

• Proceeds from sale of storage facilities for the nine months ended June 28, 2025 related to the sale of multiple Tyson-owned and operated cold storage facilities.

• Proceeds from sale of storage facilities for the three months ended December 27, 2025 related to the sale of a Tyson-owned and operated cold storage facility.

Cash Flows from Financing Activities

in millions Nine Months Ended

June 28, 2025 June 29, 2024

in millions Three Months Ended

December 27, 2025 December 28, 2024

Proceeds from issuance of debt $ 23 $ 22

Payments on debt (509) (42)

Proceeds from issuance of commercial paper — 1,649

Repayments of commercial paper — (2,240)

Purchases of Tyson Class A common stock (47) (15)

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Other, net (14) —

Net cash (used for) provided by financing activities $ (1,377) $ 883

• During the first nine months of fiscal 2024, proceeds from issuance of debt included $750 million of proceeds from the term loan facility due May 2028, $600 million of proceeds from the 5.40% 2029 Notes and $900 million from the 5.70% 2034 Notes.

• Payments on debt during the nine months ended June 28, 2025 and June 29, 2024 included payments of $750 million and $250 million, respectively, on our term loan due May 2026.

• Dividends paid during the nine months ended June 28, 2025 reflected a 2% increase to our fiscal 2024 quarterly dividend rate.

Net cash used for financing activities $ (718) $ (195)

• Payments on debt during the three months ended December 27, 2025 included a $440 million payment on the remaining balance of our term loan due May 2028 using cash on hand.

• Dividends paid during the three months ended December 27, 2025 reflected a 2% increase to our fiscal 2025 quarterly dividend rate.

Expiration Date Facility

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Borrowed Amount

June 28, 2025

December 27, 2025

Cash and cash equivalents $ 1,278

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Revolving credit facility April 2030 $ 2,500 $ — $ — 2,500

Revolving term loan credit facility December 2028 750 — — 750

Commercial paper —

Total liquidity $ 4,528

• Liquidity includes cash and cash equivalents, short-term investments and availability under our revolving credit, less the outstanding commercial paper balance.

• At June 28, 2025, we had current debt of $886 million, which we intend to pay with our existing cash balance, cash generated from our operating activities and other existing or new liquidity sources.

• Liquidity includes cash and cash equivalents, short-term investments, availability under our revolving credit facility and availability under our revolving term loan credit facility, less the outstanding commercial paper balance.

• At December 27, 2025, we had current debt of $909 million, which we intend to pay with our existing cash balance, cash generated from our operating activities and other existing or new liquidity sources.

• The revolving credit facility supports our short-term funding needs and also serves to backstop our commercial paper program.

We had no borrowings under the revolving credit facility during the nine months ended June 28, 2025.

• On April 15, 2025, we terminated our previous revolving credit facility with a maturity date of September 2026 and entered into a new $2.5 billion revolving credit facility.

The new revolving credit facility will mature, and the commitments thereunder will terminate, in April 2030 with options for two one-year extensions.

Under the terms of this revolving credit facility, we have the option to establish incremental commitment increases of up to an aggregate amount of $500 million if certain conditions are met.

The covenants and other terms of the new facility are generally consistent with those of the terminated facility.

We had no borrowings under the revolving credit facility during the three months ended December 27, 2025.

• In the first quarter of fiscal 2026, we entered into a $750 million revolving term loan credit facility.

The facility will mature and commitment thereunder will terminate in December 2028.

The Company may make an election to convert all or part of the outstanding borrowings into one or more term loans that will mature up to seven years after the facility's maturity date.

Interest on borrowings under the facility are based either on term or daily simple secured overnight financing rates, with an applicable spread, or an alternative base rate with an applicable spread.

The facility contained covenants and other terms that are generally consistent with those of our revolving credit facility.

We had no borrowings under the revolving term loan facility during the three months ended December 27, 2025.

• We expect net interest expense to approximate $370 million for fiscal 2026.

• Our current ratio was 1.7 to 1 at June 28, 2025 and 2.0 to 1 at September 28, 2024.

The decrease in fiscal 2025 is primarily due to increased current debt.

• At June 28, 2025, $691 million of our cash was held in the accounts of our foreign subsidiaries.

• Our ratio of short-term assets to short-term liabilities ("current ratio") was 1.5 to 1 at December 27, 2025 and 1.6 to 1 at September 27, 2025.

The decrease in fiscal 2026 is primarily due to lower inventories.

• At December 27, 2025, $654 million of our cash was held in the international accounts of our foreign subsidiaries.

Generally, we do not rely on the foreign cash as a source of funds to support our ongoing domestic liquidity needs.

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Capital Resources

Credit Facility

Credit and Term Loan Facilities

Cash flows from operating activities and cash on hand are our primary sources of liquidity for funding debt service, capital expenditures, dividends and share repurchases.

We also have a revolving credit facility, with a committed capacity of $2.5 billion, to provide additional liquidity for working capital needs and to backstop our commercial paper program.

At June 28, 2025, amounts available for borrowing under our revolving credit facility totaled $2.5 billion.

Additionally, we have a revolving term loan credit facility, with committed capacity of $750 million, to also provide additional liquidity.

At December 27, 2025, amounts available for borrowing under our revolving credit and term loan facilities totaled $3.3 billion.

Our revolving credit facility is funded by a syndicate of 17 banks, with commitments ranging from $50 million to $225 million per bank.

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Our commercial paper program provides a low-cost source of borrowing to fund general corporate purposes including working capital requirements.

The maximum borrowing capacity under the commercial paper program is $1.75 billion, which increased in April 2025 in conjunction with the execution of the new revolving credit facility.

The maximum borrowing capacity under the commercial paper program is $1.75 billion.

The maturities of the notes may vary, but may not exceed 397 days from the date of issuance.

As of June 28, 2025, we had no commercial paper outstanding under this program.

As of December 27, 2025, we had no commercial paper outstanding under this program.

Our ability to access commercial paper in the future may be limited or its costs increased.

Credit Ratings

Term Loan Facility due May 2028

Revolving Credit Facility

Standard & Poor’s Rating Services’, a Standard & Poor’s Financial Services LLC business (“S&P”), applicable rating is “BBB”.

Moody’s Investor Service, Inc.’s (“Moody’s”) applicable rating is “Baa2”.

The below table outlines the commitment fee on any unused borrowing capacity and the borrowing spread on the outstanding principal balance of our term loan facility due May 2028 that corresponds to the applicable ratings levels from S&P and Moody’s.

Ratings Level (Moody’s/S&P) Commitment Fee Borrowing Spread

Baal/BBB+ or above 0.100 % 1.625 %

Baa2/BBB (current level) 0.125 % 1.750 %

Baa3/BBB- or lower 0.175 % 1.875 %

Revolving Credit Facility

The below table outlines the fees paid on the unused portion of the facility (“Facility Fee Rate ” ) and letter of credit fees and borrowings (“Borrowing Spread ” ) that corresponds to the applicable ratings levels from S&P and Moody’s.

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Ba1/BB+ or lower 0.200 % 1.175 %

Revolving Term Loan Credit Facility

The below table outlines the commitment fee on any unused borrowing capacity and the borrowing spread on the outstanding principal balance of our revolving term loan credit facility that corresponds to the applicable ratings levels from S&P and Moody’s and designated Tranche.

Borrowings under the revolving term loan are separated into Tranche A, B, C or D with options to convert all or part of the outstanding borrowings into term loans that will mature one, three, five or seven years, respectively, after the facility's maturity date.

Ratings Level (Moody’s/S&P) Commitment Fee Tranche A and B Borrowing Spread Tranche C Borrowing Spread Tranche D Borrowing Spread

Baal/BBB+ or above 0.100 % 1.500 % 1.575 % 1.725 %

Baa2/BBB (current level) 0.110 % 1.600 % 1.700 % 1.850 %

Baa3/BBB- 0.150 % 1.725 % 1.825 % 1.975 %

Bal/BB+ or lower 0.200 % 1.975 % 2.075 % 2.225 %

In the event the rating levels fall within different levels, the applicable rate will be based upon the higher of the two Levels or, if there is more than a one-notch split between the two Levels, then the Applicable Rate will be based upon the Level that is one Level below the higher Level.

Debt Covenants

Our revolving credit and term loan facilities contain affirmative and negative covenants that, among other things, may limit or restrict our ability to:

Our revolving credit facility and term loan credit facility contain affirmative and negative covenants that, among other things, may limit or restrict our ability to:

create liens and encumbrances;

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and engage in certain consolidations, mergers and sales of assets.

We were in compliance with all debt covenants at June 28, 2025, and we expect that we will maintain compliance.

We were in compliance with all debt covenants at December 27, 2025, and we expect that we will maintain compliance.

RECENTLY ISSUED/ADOPTED ACCOUNTING PRONOUNCEMENTS

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Refer to Part I, Item 1, Notes to Consolidated Condensed Financial Statements, Note 1:

Accounting Policies, for updates to our significant accounting policies during the nine months ended June 28, 2025.

Accounting Policies, for updates to our significant accounting policies during the three months ended December 27, 2025.

These critical accounting policies require us to make estimates and assumptions that affect the amounts reported in the consolidated condensed financial statements and accompanying notes.

We consider reporting units and indefinite life intangible assets that have 20% or less excess fair value over carrying amount to have a heightened risk of impairment.

During fiscal 2024, we determined the following reporting units and indefinite life intangible asset were considered at heightened risk of impairment:

our Chicken segment reporting units and our Beef reporting unit with goodwill totaling $3.0 billion and $0.3 billion, respectively, and one Prepared Foods brand with a carrying value of $0.5 billion, with our Beef reporting unit having less than 10% of excess fair value above carrying value.

As further described in the impairment of goodwill and indefinite life intangible assets critical accounting estimate included in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025, we assess goodwill and indefinite life assets for impairment at least annually as of the first day of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Our qualitative assessment for the first and second quarters of fiscal 2025 did not indicate that it was more likely than not the fair value of any of our reporting units or indefinite life intangible assets was less than the carrying amount, and as such, no quantitative test was deemed necessary.

During the third quarter of fiscal 2025, our Beef reporting unit experienced lower than anticipated supply of market-ready cattle and an increased carrying amount primarily associated with higher cattle costs.

Additionally, our latest forecasts now indicate the timing of the recovery of market-ready cattle associated with the anticipated cattle herd rebuilding will be longer than previously estimated.

Consequently, based on our qualitative assessment, we determined the fair value of our Beef reporting unit was more likely than not less than the carrying amount and proceeded to perform a quantitative assessment.

Based on this quantitative assessment, we determined the fair value of our Beef reporting unit had decreased to below its carrying value.

Accordingly, we recognized a $343 million impairment to fully impair its goodwill.

Our qualitative assessments for the third quarter of fiscal 2025 for all of our other reporting units and indefinite life intangible assets did not indicate that it was more likely than not the fair value was less than the carrying amount, and as such, no quantitative test was deemed necessary.

Our qualitative assessment for the first quarter of fiscal 2026 did not indicate that it was more likely than not the fair value of any of our reporting units or indefinite life intangible assets was less than the carrying amount, and as such, no quantitative test was deemed necessary.

We consider reporting units and indefinite lived intangible assets that have 20% or less excess fair value over carrying amount to have a heightened risk of impairment.

One of our International reporting units, which had goodwill of $0.2 billion at December 27, 2025, was considered at heightened risk of impairment as of the date of the most recent estimated fair value determination which was in the fourth quarter of fiscal 2025.

All of our other remaining reporting units and all our indefinite life intangible assets' estimated fair values exceeded their carrying values by more than 20% as of their most recent assessments.

We continuously evaluate the changing macro-economic conditions including inflationary pressures, rising interest rates, demand outlook and export markets as well as the Company's market capitalization.

Our reporting units with heightened risk of future impairments with $3.0 billion carrying value, as well as a brand with $0.5 billion carrying value, all had less than 20% of excess fair value above carrying value as of the date of the most recent estimated fair value determination.

Consequently, their estimated fair values remain highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins.

Although our remaining reporting units and indefinite life intangible assets generally had more than 20% excess fair value over carrying amount as of the date of the most recent estimated fair value determination, they are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

The estimated fair value of our reporting unit designated to have a heightened risk of impairment remains highly sensitive to future discount rate increases, changing macro-economic conditions and achievement of projected long-term operating margins.

As of the latest fair value assessment in the fourth quarter of fiscal 2025, we estimated discount rates utilized in the discounted cash flow method would have to increase by more than approximately 125 basis points, with all other assumptions unchanged, before the carrying value of the International reporting unit at heightened risk of impairment would exceed its fair value.

Although our remaining reporting units and all indefinite life intangible assets had more than 20% excess fair value over their carrying amounts as of the date of the most recent estimated fair value determination, they are also susceptible to impairments if any assumptions, estimates, or market factors significantly change in the future.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following:

(i) global pandemics have had, and may in the future have, an adverse impact on our business and operations;

(ii) the effectiveness of restructuring or financial excellence programs;

(iii) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics;

(i) the effectiveness of financial excellence programs or operational optimization plans;

(ii) access to, and inputs from, foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics;

(iii) global pandemics have had, and may in the future have, an adverse impact on our business and operations;

(iv) cyber attacks, other cyber incidents, security breaches or other disruptions of our information technology systems;

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(viii) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins;

(ix) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to conduct our operations;

(ix) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI), New World screwworm or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to conduct our operations;

(x) changes in consumer preference and diets and our ability to identify and react to consumer trends;

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(xiii) our ability to leverage brand value propositions;

(xiv) changes in availability and relative costs of labor and contract farmers and our ability to maintain good relationships with team members, labor unions, contract farmers and independent producers providing us livestock, including as a result of our relocation of certain corporate team members to our world headquarters in Springdale, Arkansas;

(xv) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation;

(xvi) the effect of climate change and any legal or regulatory response thereto;

(xvii) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws;

(xvi) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws;

(xvii) the effect of climate change and any legal or regulatory response thereto;

(xviii) adverse results from litigation;

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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