NEW YORK, Sept. 08, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into The J.M. Smucker Company (NYSE: SJM) for potential violations of the federal securities laws. If you invested in J.M. Smucker, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/the-jm-smucker-company-class-action-lawsuit. Why Is J.M. Smucker being Investigated? J.M. Smucker manufactures and markets branded food and beverage products. ...

PresentationAll right. Welcome back. Please find your seats, we'll kick off our next fireside. I'd like to welcome back to our conference, The J.M. Smucker Company. With us today are CEO and Chairman of the Board, Mark Smucker, and CFO, Tucker Marshall, Mark and Tucker are going to go through some brief prepared remarks, and then we'll sit down for some questions. Mark, over to you, and thanks for being here.Mark SmuckerCEO & Chairman Thanks, Andrew. It's always great to be back. And clearly, great to see e ...

The J. M. Smucker Company (SJM) FY 2025 Conference September 02, 2025 12:45 PM ET Company ParticipantsMark Smucker - CEO & Chair of the BoardTucker Marshall - CFOConference Call ParticipantsAndrew Lazar - Equity AnalystAndrew LazarI'd like to welcome back to our conference, The J. M. Smucker Company. With us today are CEO and Chairman of the Board, Mark Smucker and CFO, Tucker Marshall. Mark and Tucker are going to go through some brief prepared remarks, and then we'll sit down for some questions. Mark, ove ...

Financial Data and Key Metrics Changes - The company raised its full-year net sales guidance to 3% to 5% growth compared to the prior year, driven by strong performance in the coffee segment and Uncrustables [34][39] - Adjusted earnings per share guidance remains at $8.50 to $9.50, reflecting the impact of higher costs from U.S. tariffs [34][35] - The company aims to generate over $1 billion in free cash flow annually, with a disciplined capital deployment model [3][35] Business Line Data and Key Metrics Changes - The coffee segment is performing well despite record-high green coffee prices, with favorable price elasticity of demand trends [4][42] - Uncrustables brand is expected to exceed $1 billion in annual net sales, driven by marketing, distribution gains, and innovation [10][34] - The pet segment, particularly Milk-Bone and Meow Mix, is experiencing growth, with Milk-Bone's Peanut Buttery Bites being a significant innovation [18][56] Market Data and Key Metrics Changes - The U.S. retail coffee market shows resilience, with over 70% of coffee consumed at home, making it affordable despite inflation [42] - The cat food category is benefiting from positive pet population trends, with Meow Mix showing strong momentum [21][56] - The frozen handheld and spreads market is seeing increased distribution for Uncrustables, now available in over 30,000 convenience stores [16][51] Company Strategy and Development Direction - The company is focused on long-term growth through brand-building and innovation, particularly in key growth platforms like Café Bustelo and Uncrustables [3][4] - A strategy to reduce SKU count by 25% for the Hostess brand aims to simplify offerings and enhance profitability [22][32] - The company is committed to maintaining a balanced approach to capital deployment, including debt reduction and dividend growth [35][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic environment while delivering organic growth [39][40] - The outlook for coffee remains strong, with expectations of continued resilience despite significant inflation [45][46] - Management anticipates sequential profit improvement across various segments, including Sweet Baked Snacks and Uncrustables [49][50] Other Important Information - The company is closing its Indianapolis manufacturing facility, which is expected to deliver $30 million in annual cost savings [22] - The Milk-Bone brand is leveraging cultural relevance to connect with younger consumers, enhancing its market position [19][20] Q&A Session Summary Question: What are the key takeaways from recent results? - The company delivered 3% comparable growth and raised its top-line guidance, primarily due to strong coffee performance [39][40] Question: How is the coffee category performing in terms of consumer behavior? - The coffee portfolio is performing well, with consumption remaining solid due to affordability at home despite inflation [42][43] Question: What are the expectations for Uncrustables moving forward? - Uncrustables is expected to continue its strong performance with new distribution and innovative product offerings [51][53]

BARCLAYS GLOBAL CONSUMER STAPLES CONFERENCE SEPTEMBER 2, 2025 This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by those forward-looking statements. Users should understand that the risks, uncertainties, factors, and assumptions listed and dis ...

Shares of J. M. Smucker (NYSE: SJM ) have been a poor performer over the past year given sluggish sales and excess debt. Tariffs have also provided additional cost pressure. That said, the stock has rebounded from itsOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure ...

Group 1 - The U.S. consumers are facing a new wave of price increases as companies from food giants to hardware chains warn that tariff costs are being passed on to retail prices [1][2] - Major retailers like Walmart, Target, and Best Buy have indicated that tariff-related price hikes are gradually reflected in the costs of grocery items, home goods, and electronics [1] - J.M. Smucker warned of a 22% drop in coffee profits due to tariffs, leading to further price increases [1] - Hormel Foods noted a sharp rise in commodity input costs after its quarterly performance fell short of expectations, resulting in a 12% drop in its stock price [1] - A recent ruling by a federal appeals court deemed most of Trump's global import tariffs unconstitutional, adding uncertainty to future costs for retailers and consumers [1] Group 2 - The former CEO of Gap expressed that the current situation is beyond control, indicating that businesses cannot determine the relationship between product costs, retail pricing, and profit margins [2] - Retail executives warned that more price increases are imminent as new inventory is procured at higher costs [2] - Walmart's CEO mentioned that the company is trying to maintain low prices as long as possible, but costs are expected to continue rising into the third and fourth quarters [2] - The economic pressure is forcing retailers to weigh how much cost can be absorbed and how much will inevitably be passed on to consumers [2] - A consumer confidence survey showed a nearly 6% decline in August compared to July, with inflation expectations rising from 4.5% to 4.8% [2] Group 3 - Consumer behavior in the U.S. is changing, with households across income levels becoming more selective about where and how they spend [3] - Whirlpool's CEO noted that consumers are starting to purchase lower-end products, while Procter & Gamble observed a slight downgrade in brand preferences [3] - The concept of "alternative consumption" is emerging, where consumers opt for cost-effective substitutes rather than purely downgrading [3] - Retailers like TJX, Ross, and Marshall's are benefiting as consumers seek lower-priced brand items [3]

NEW YORK, Aug. 31, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into The J.M. Smucker Company (NYSE: SJM) for potential violations of the federal securities laws. If you invested in J.M. Smucker, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/the-jm-smucker-company-class-action-lawsuit. Why Is J.M. Smucker being Investigated? J.M. Smucker manufactures and markets branded food and beverage products. I ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including income statements, balance sheets, cash flows, and shareholders' equity, along with detailed explanatory notes [Condensed Statements of Consolidated Income (Loss)](index=3&type=section&id=Condensed%20Statements%20of%20Consolidated%20Income%20(Loss)) This statement presents the company's revenues, expenses, and net income or loss over a specific period **Three Months Ended July 31, 2025 vs. 2024 (Dollars in millions):** | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Net sales | $2,113.3 | $2,125.1 | (11.8) | | Cost of products sold | 1,638.6 | 1,327.9 | 310.7 | | Gross Profit | 474.7 | 797.2 | (322.5) | | Operating Income | 45.6 | 349.5 | (303.9) | | Income (Loss) Before Income Taxes | (56.5) | 246.0 | (302.5) | | Net Income (Loss) | (43.9) | 185.0 | (228.9) | | Earnings per common share (basic & diluted) | (0.41) | 1.74 | (2.15) | - **Net Income (Loss)** decreased by **124% YoY**, from $185.0 million in 2024 to $(43.9) million in 2025[8](index=8&type=chunk) - **Gross Profit** decreased by **40% YoY**, from $797.2 million in 2024 to $474.7 million in 2025[8](index=8&type=chunk) [Condensed Statements of Consolidated Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Statements%20of%20Consolidated%20Comprehensive%20Income%20(Loss)) This statement presents the company's net income or loss and other comprehensive income or loss components **Three Months Ended July 31, 2025 vs. 2024 (Dollars in millions):** | Metric | 2025 | 2024 | Change (YoY) | | :------------------------------------------ | :----- | :----- | :----------- | | Net income (loss) | $(43.9) | $185.0 | $(228.9) | | Total Other Comprehensive Income | 2.0 | 2.4 | (0.4) | | Comprehensive Income (Loss) | $(41.9) | $187.4 | $(229.3) | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's assets, liabilities, and equity at a specific point in time **As of July 31, 2025 vs. April 30, 2025 (Dollars in millions):** | Metric | July 31, 2025 | April 30, 2025 | Change | | :-------------------------------- | :------------ | :------------- | :----- | | Total Assets | $17,741.9 | $17,563.3 | $178.6 | | Total Current Assets | 2,401.9 | 2,146.6 | 255.3 | | Total Liabilities | 11,816.0 | 11,480.7 | 335.3 | | Total Current Liabilities | 2,953.9 | 2,652.0 | 301.9 | | Total Shareholders' Equity | 5,925.9 | 6,082.6 | (156.7) | - **Cash and cash equivalents** decreased from $69.9 million at April 30, 2025, to **$39.3 million** at July 31, 2025[12](index=12&type=chunk) - **Total Inventory** increased from $1,209.4 million at April 30, 2025, to **$1,386.0 million** at July 31, 2025[12](index=12&type=chunk) [Condensed Statements of Consolidated Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Consolidated%20Cash%20Flows) This statement presents the cash inflows and outflows from operating, investing, and financing activities **Three Months Ended July 31, 2025 vs. 2024 (Dollars in millions):** | Activity | 2025 | 2024 | Change (YoY) | | :------------------------------------------ | :----- | :----- | :----------- | | Net Cash Provided by (Used for) Operating Activities | $(10.6) | $172.9 | $(183.5) | | Net Cash Provided by (Used for) Investing Activities | $(197.9) | $(172.4) | $(25.5) | | Net Cash Provided by (Used for) Financing Activities | $178.0 | $(23.0) | $201.0 | | Net increase (decrease) in cash and cash equivalents | $(30.6) | $(22.5) | $(8.1) | | Cash and Cash Equivalents at End of Period | $39.3 | $39.5 | $(0.2) | - Operating activities shifted from providing $172.9 million in cash in 2024 to using **$10.6 million** in 2025, primarily due to lower net income and related tax impacts, partially offset by lower working capital requirements[15](index=15&type=chunk)[145](index=145&type=chunk) - Financing activities provided **$178.0 million** in 2025, a significant increase from using $23.0 million in 2024, driven by a net increase in short-term borrowings[15](index=15&type=chunk)[147](index=147&type=chunk) [Condensed Statements of Consolidated Shareholders' Equity](index=6&type=section&id=Condensed%20Statements%20of%20Consolidated%20Shareholders'%20Equity) This statement presents changes in the company's shareholders' equity over a specific period **Shareholders' Equity Summary (Dollars in millions):** | Metric | July 31, 2025 | May 1, 2025 | July 31, 2024 | May 1, 2024 | | :-------------------------------- | :------------ | :---------- | :------------ | :---------- | | Total Shareholders' Equity | $5,925.9 | $6,082.6 | $7,769.5 | $7,693.9 | | Retained Income | $343.5 | $501.8 | $2,259.9 | $2,188.1 | | Common Shares Outstanding | 106,687,114 | 106,425,081 | 106,408,530 | 106,194,281 | | Cash dividends declared per common share | $1.10 | N/A | $1.08 | N/A | - **Total Shareholders' Equity** decreased by **$156.7 million** from May 1, 2025, to July 31, 2025, primarily due to a net loss and cash dividends declared[16](index=16&type=chunk) [Note 1: Basis of Presentation](index=7&type=section&id=Note%201%3A%20Basis%20of%20Presentation) This note explains the accounting principles and methods used in preparing the interim financial statements - The unaudited interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, including all necessary normal recurring adjustments[18](index=18&type=chunk) - Operating results for the three months ended July 31, 2025, are not necessarily indicative of the full year ending April 30, 2026[19](index=19&type=chunk) [Note 2: Recently Issued Accounting Standards](index=7&type=section&id=Note%202%3A%20Recently%20Issued%20Accounting%20Standards) This note details the adoption and evaluation of new accounting standards and their potential impact - The company adopted ASU 2023-07, Segment Reporting, retrospectively for interim disclosures in Q1 2026, with no material impact on consolidated financial statements[20](index=20&type=chunk) - ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures) are not yet adopted but are being evaluated; no anticipated impact on results of operations, financial position, or cash flows[21](index=21&type=chunk)[22](index=22&type=chunk) [Note 3: Divestitures](index=7&type=section&id=Note%203%3A%20Divestitures) This note provides details on the sale of certain business segments and the resulting financial impacts - On March 3, 2025, the company sold certain Sweet Baked Snacks value brands to JTM Foods, LLC for net proceeds of **$34.6 million**, recognizing a pre-tax loss of **$44.2 million**[23](index=23&type=chunk) - On December 2, 2024, the Voortman business was sold to Second Nature Brands for net proceeds of **$291.4 million**, resulting in a pre-tax loss of **$265.9 million**[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 4: Special Project Costs](index=8&type=section&id=Note%204%3A%20Special%20Project%20Costs) This note outlines costs associated with divestitures, acquisitions, integration, and restructuring activities - Special project costs include employee-related costs and other transition/termination costs for divestiture, acquisition, integration, and restructuring activities, not allocated to segment profit[26](index=26&type=chunk) **Integration Costs for Hostess Brands Acquisition (Dollars in millions):** | Cost Type | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Total Costs Incurred to Date at July 31, 2025 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------------------- | | Transaction costs | $0.0 | $0.0 | $99.0 | | Employee-related costs | $0.3 | $2.6 | $43.3 | | Other transition and termination costs | $0.1 | $9.4 | $43.0 | | **Total integration costs** | **$0.4** | **$12.0** | **$185.3** | - Restructuring costs of approximately **$75.0 million** are anticipated for the Indianapolis facility closure, including $60.0 million in noncash accelerated depreciation and $15.0 million in employee-related and other transition costs[31](index=31&type=chunk) [Note 5: Reportable Segments](index=9&type=section&id=Note%205%3A%20Reportable%20Segments) This note provides financial information for the company's operating segments, including net sales and profit - The company operates in four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks, plus International and Away From Home[33](index=33&type=chunk) **Segment Net Sales (Three Months Ended July 31, Dollars in millions):** | Segment | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | U.S. Retail Coffee | $717.2 | $623.4 | $93.8 | | U.S. Retail Frozen Handheld and Spreads | $484.7 | $496.8 | $(12.1) | | U.S. Retail Pet Foods | $368.0 | $399.7 | $(31.7) | | Sweet Baked Snacks | $253.2 | $333.7 | $(80.5) | | International and Away From Home | $290.2 | $271.5 | $18.7 | | **Total Net Sales** | **$2,113.3** | **$2,125.1** | **$(11.8)** | **Segment Profit (Three Months Ended July 31, Dollars in millions):** | Segment | 2025 | 2024 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | U.S. Retail Coffee | $134.2 | $172.6 | $(38.4) | | U.S. Retail Frozen Handheld and Spreads | $114.3 | $119.0 | $(4.7) | | U.S. Retail Pet Foods | $101.3 | $115.3 | $(14.0) | | Sweet Baked Snacks | $34.2 | $74.4 | $(40.2) | | International and Away From Home | $65.5 | $48.6 | $16.9 | | **Total Segment Profit** | **$449.5** | **$529.9** | **$(80.4)** | **Net Sales by Product Category (Three Months Ended July 31, Dollars in millions):** | Product Category | 2025 | 2024 | Change (YoY) | | :----------------------- | :----- | :----- | :----------- | | Coffee | $816.1 | $711.9 | $104.2 | | Sweet baked goods | $253.2 | $296.6 | $(43.4) | | Frozen handheld | $244.1 | $222.6 | $21.5 | | Peanut butter | $207.0 | $218.6 | $(11.6) | | Pet snacks | $203.4 | $226.8 | $(23.4) | | Cat food | $179.3 | $183.1 | $(3.8) | | Fruit spreads | $95.3 | $106.5 | $(11.2) | | Cookies | $0.0 | $37.1 | $(37.1) | | **Total Net Sales** | **$2,113.3** | **$2,125.1** | **$(11.8)** | [Note 6: Earnings per Share](index=12&type=section&id=Note%206%3A%20Earnings%20per%20Share) This note details the calculation of basic and diluted earnings per common share **Earnings Per Share (Three Months Ended July 31):** | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net income (loss) per common share (basic) | $(0.41) | $1.74 | | Net income (loss) per common share (diluted) | $(0.41) | $1.74 | | Weighted-average common shares outstanding | 106.6 | 106.3 | | Weighted-average common shares outstanding – assuming dilution | 106.6 | 106.5 | - For the three months ended July 31, 2025, a net loss resulted in the exclusion of anti-dilutive stock-based awards from diluted EPS computation[47](index=47&type=chunk) [Note 7: Debt and Financing Arrangements](index=13&type=section&id=Note%207%3A%20Debt%20and%20Financing%20Arrangements) This note describes the company's long-term debt, credit facilities, and short-term borrowings **Long-Term Debt Summary (Dollars in millions):** | Debt Instrument | Principal Outstanding (July 31, 2025) | Carrying Amount (July 31, 2025) | Principal Outstanding (April 30, 2025) | Carrying Amount (April 30, 2025) | | :------------------------------------------ | :------------------------------------ | :------------------------------ | :------------------------------------- | :------------------------------- | | 3.38% Senior Notes due Dec 2027 | $500.0 | $499.0 | $500.0 | $498.9 | | 5.90% Senior Notes due Nov 2028 | $750.0 | $746.0 | $750.0 | $745.7 | | 2.38% Senior Notes due Mar 2030 | $500.0 | $497.8 | $500.0 | $497.7 | | 2.13% Senior Notes due Mar 2032 | $364.5 | $361.5 | $364.5 | $361.3 | | 6.20% Senior Notes due Nov 2033 | $1,000.0 | $992.6 | $1,000.0 | $992.4 | | 4.25% Senior Notes due Mar 2035 | $650.0 | $646.0 | $650.0 | $645.9 | | 2.75% Senior Notes due Sep 2041 | $177.5 | $176.1 | $177.5 | $176.1 | | 6.50% Senior Notes due Nov 2043 | $750.0 | $737.3 | $750.0 | $737.2 | | 4.38% Senior Notes due Mar 2045 | $600.0 | $589.4 | $600.0 | $589.2 | | 3.55% Senior Notes due Mar 2050 | $161.2 | $159.3 | $161.2 | $159.3 | | 6.50% Senior Notes due Nov 2053 | $1,000.0 | $983.4 | $1,000.0 | $983.2 | | Term Loan Credit Agreement due Mar 2027 | $650.0 | $649.9 | $650.0 | $649.9 | | **Total long-term debt** | **$7,103.2** | **$7,038.3** | **$7,103.2** | **$7,036.8** | - The company entered into a **$650.0 million** senior unsecured delayed-draw Term Loan Credit Agreement in March 2025, maturing March 5, 2027, with an interest rate of **5.44%** as of July 31, 2025[55](index=55&type=chunk) - Short-term borrowings outstanding under the commercial paper program increased to **$952.0 million** at July 31, 2025, from $641.0 million at April 30, 2025, with weighted-average interest rates of 4.65% and 4.73%, respectively[57](index=57&type=chunk) [Note 8: Pensions and Other Postretirement Benefits](index=14&type=section&id=Note%208%3A%20Pensions%20and%20Other%20Postretirement%20Benefits) This note provides information on the company's defined benefit pension plans and other postretirement benefit costs **Net Periodic Benefit Cost (Three Months Ended July 31, Dollars in millions):** | Cost Component | Defined Benefit Pension Plans (2025) | Defined Benefit Pension Plans (2024) | Other Postretirement Benefits (2025) | Other Postretirement Benefits (2024) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Service cost | $0.2 | $0.1 | $0.2 | $0.2 | | Interest cost | $3.8 | $4.4 | $0.6 | $0.7 | | Expected return on plan assets | $(3.4) | $(3.1) | $0.0 | $0.0 | | Amortization of net actuarial loss (gain) | $1.0 | $1.1 | $(0.5) | $(0.5) | | Amortization of prior service cost (credit) | $0.0 | $0.1 | $(0.1) | $(0.2) | | **Net periodic benefit cost** | **$1.6** | **$2.6** | **$0.2** | **$0.2** | - Net periodic benefit cost for defined benefit pension plans decreased from $2.6 million in 2024 to **$1.6 million** in 2025[60](index=60&type=chunk) [Note 9: Derivative Financial Instruments](index=14&type=section&id=Note%209%3A%20Derivative%20Financial%20Instruments) This note explains the company's use of derivatives to manage market risks and their financial impact - The company uses commodity, foreign currency exchange, and interest rate derivatives to manage market risks, but does not enter into them for speculative purposes[61](index=61&type=chunk) **Gross Notional Value of Outstanding Derivative Contracts (Dollars in millions):** | Contract Type | July 31, 2025 | April 30, 2025 | | :------------------------------ | :------------ | :------------- | | Commodity contracts | $1,866.4 | $1,698.1 | | Foreign currency exchange contracts | $125.8 | $122.4 | **Net Gains (Losses) Recognized in Cost of Products Sold (Three Months Ended July 31, Dollars in millions):** | Derivative Type | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Commodity contracts | $(227.7) | $(30.0) | | Foreign currency exchange contracts | $0.6 | $0.2 | | **Total derivative gains (losses)** | **$(227.1)** | **$(29.8)** | - The change in net cumulative unallocated derivative gains and losses was a loss of **$253.1 million** in 2025, compared to a loss of $30.0 million in 2024[73](index=73&type=chunk) [Note 10: Other Financial Instruments and Fair Value Measurements](index=16&type=section&id=Note%2010%3A%20Other%20Financial%20Instruments%20and%20Fair%20Value%20Measurements) This note details the fair value measurements of financial instruments and their categorization **Fair Values of Financial Instruments (Dollars in millions):** | Instrument | Carrying Amount (July 31, 2025) | Fair Value (July 31, 2025) | Carrying Amount (April 30, 2025) | Fair Value (April 30, 2025) | | :-------------------------------- | :------------------------------ | :------------------------- | :------------------------------- | :------------------------ | | Marketable securities and other investments | $20.1 | $20.1 | $20.0 | $20.0 | | Derivative financial instruments – net | $(117.1) | $(117.1) | $62.1 | $62.1 | | Total long-term debt | $(7,038.3) | $(6,987.6) | $(7,036.8) | $(7,242.0) | - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant observable inputs), and Level 3 (significant unobservable inputs)[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 11: Leases](index=17&type=section&id=Note%2011%3A%20Leases) This note provides information on the company's operating and finance lease arrangements and associated costs - The company leases warehouses, manufacturing facilities, office space, equipment, and vehicles, primarily through operating lease agreements, and does not recognize leases with terms of 12 months or less on the balance sheet[82](index=82&type=chunk) **Lease Liabilities and Right-of-Use Assets (Dollars in millions):** | Metric | July 31, 2025 | April 30, 2025 | | :-------------------------------- | :------------ | :------------- | | Operating lease right-of-use assets | $120.1 | $115.4 | | Total operating lease liabilities | $126.3 | $121.6 | | Finance lease right-of-use assets (net) | $11.1 | $11.9 | | Total finance lease liabilities | $11.7 | $12.5 | **Total Lease Cost (Three Months Ended July 31, Dollars in millions):** | Cost Type | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Operating lease cost | $12.4 | $12.5 | | Finance lease cost | $1.1 | $1.0 | | Variable lease cost | $5.9 | $6.5 | | Short-term lease cost | $10.3 | $11.2 | | **Total lease cost** | **$29.7** | **$31.2** | [Note 12: Income Taxes](index=19&type=section&id=Note%2012%3A%20Income%20Taxes) This note details the effective income tax rate and significant factors affecting income tax expense or benefit - The effective income tax rate for the three months ended July 31, 2025, was **22.3%**, compared to 24.8% in 2024, primarily due to state income taxes[95](index=95&type=chunk) - The company anticipates a full-year effective income tax rate of approximately **24.0%** for 2026[127](index=127&type=chunk) - The 'One Big Beautiful Bill Act' signed by President Trump on July 4, 2025, did not materially impact the effective income tax rate for the quarter but will reduce cash income tax requirements for the current year due to accelerated tax deductions[97](index=97&type=chunk) [Note 13: Accumulated Other Comprehensive Income (Loss)](index=20&type=section&id=Note%2013%3A%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note presents the components of accumulated other comprehensive income or loss **Accumulated Other Comprehensive Income (Loss) (Dollars in millions):** | Component | Balance at May 1, 2025 | Balance at July 31, 2025 | Balance at May 1, 2024 | Balance at July 31, 2024 | | :-------------------------------- | :--------------------- | :----------------------- | :--------------------- | :----------------------- | | Foreign Currency Translation Adjustment | $(41.7) | $(42.7) | $(39.2) | $(39.8) | | Net Gains (Losses) on Cash Flow Hedging Derivatives | $(90.1) | $(87.7) | $(143.1) | $(140.5) | | Pension and Other Postretirement Liabilities | $(53.2) | $(52.9) | $(53.4) | $(53.0) | | Gain (Loss) on Available-for-Sale Securities | $0.5 | $0.8 | $1.1 | $1.1 | | **Total Accumulated Other Comprehensive Income (Loss)** | **$(184.5)** | **$(182.5)** | **$(234.6)** | **$(232.2)** | - Deferred net pre-tax losses of **$114.3 million** related to terminated interest rate contracts were included in accumulated other comprehensive income (loss) at July 31, 2025[76](index=76&type=chunk) [Note 14: Contingencies](index=20&type=section&id=Note%2014%3A%20Contingencies) This note describes legal proceedings and other contingent liabilities facing the company - The company is a defendant in class action lawsuits alleging misrepresentation of Folgers coffee servings; no loss contingency has been recorded as the likelihood of loss is not probable or reasonably estimable[103](index=103&type=chunk) - The company is pursuing claims for damages of **$109.0 CAD** plus punitive damages against the sellers of Voortman for alleged non-disclosures and misrepresentations, retaining these rights after the divestiture of the Voortman business[106](index=106&type=chunk) [Note 15: Common Shares](index=21&type=section&id=Note%2015%3A%20Common%20Shares) This note provides information on the company's authorized, outstanding, and treasury common shares **Common Share Information (Millions):** | Metric | July 31, 2025 | April 30, 2025 | | :-------------------------- | :------------ | :------------- | | Common shares authorized | 300.0 | 300.0 | | Common shares outstanding | 106.7 | 106.4 | | Treasury shares | 43.8 | 44.1 | - No common shares were repurchased under a Board-authorized plan during the three months ended July 31, 2025; repurchases consisted of shares from stock plan recipients[108](index=108&type=chunk) [Note 16: Supplier Financing Program](index=21&type=section&id=Note%2016%3A%20Supplier%20Financing%20Program) This note explains the company's supplier financing program and outstanding payment obligations - The company utilizes a supplier financing program, allowing participating suppliers to sell payment obligations to a third-party financial institution[109](index=109&type=chunk) - As of July 31, 2025, **$324.5 million** of outstanding payment obligations were sold to a financial institution by participating suppliers, down from $340.4 million at April 30, 2025[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and results of operations, covering key trends, detailed financial results, liquidity, and capital resources [Trends Affecting our Business](index=22&type=section&id=Trends%20Affecting%20our%20Business) This section discusses macroeconomic factors, input cost inflation, and strategic initiatives impacting the business - The company continues to experience input cost inflation and a dynamic macroeconomic environment, including tariffs, regulatory changes, and shifts in consumer behaviors, which are expected to persist through 2026[115](index=115&type=chunk) - Price increases have been implemented due to higher costs, and elevated price elasticity of demand is anticipated as consumers face broader inflationary pressures[115](index=115&type=chunk) - The company is focusing on a company-wide transformation initiative to drive sustainable productivity, grow profit margins, and reinvest for future growth and cost savings[115](index=115&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including net sales, gross profit, and operating income **Key Financial Results (Three Months Ended July 31, Dollars in millions, except per share data):** | Metric | 2025 | 2024 | % Increase (Decrease) | | :------------------------------------------ | :----- | :----- | :-------------------- | | Net sales | $2,113.3 | $2,125.1 | (1)% | | Gross profit | $474.7 | $797.2 | (40)% | | Operating income | $45.6 | $349.5 | (87)% | | Net income (loss) | $(43.9) | $185.0 | (124)% | | Net income (loss) per common share – assuming dilution | $(0.41) | $1.74 | (124)% | [Net Sales](index=23&type=section&id=Net%20Sales) This section analyzes the drivers of changes in net sales, including divestitures, pricing, and volume/mix - Net sales decreased by **1% ($11.8 million)** YoY, including a $52.8 million impact from divestitures[119](index=119&type=chunk)[120](index=120&type=chunk) - Excluding divestitures and foreign currency exchange, net sales increased by **2% ($41.2 million)**, driven by 6 percentage points from net price realization (primarily coffee) and offset by a 4 percentage point decrease from volume/mix (coffee, dog snacks, sweet baked goods, fruit spreads)[119](index=119&type=chunk)[120](index=120&type=chunk) [Operating Income](index=24&type=section&id=Operating%20Income) This section analyzes the factors influencing operating income, including gross profit, expenses, and amortization - Gross profit decreased by **$322.5 million (40%)** due to higher commodity costs (including unfavorable derivative impacts), unfavorable volume/mix, and divestitures, partially offset by higher net price realization[123](index=123&type=chunk) - Operating income decreased by **$303.9 million (87%)**, primarily reflecting the decrease in gross profit, partially offset by lower selling, distribution, and administrative (SD&A) expenses and amortization[124](index=124&type=chunk) **Operating Income Components as % of Net Sales (Three Months Ended July 31):** | Component | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Gross profit | 22.5% | 37.5% | | Total selling, distribution, and administrative expenses | 17.9% | 18.4% | | Amortization | 2.4% | 2.6% | | Other special project costs | 0.3% | 0.3% | | Other operating expense (income) – net | (0.2)% | (0.3)% | | **Operating income** | **2.2%** | **16.4%** | [Interest Expense](index=24&type=section&id=Interest%20Expense) This section discusses the company's net interest expense and its comparability to the prior year - Net interest expense remained comparable to the prior year[126](index=126&type=chunk) [Income Taxes](index=24&type=section&id=Income%20Taxes) This section details the changes in income taxes and the effective tax rate for the period - Income taxes decreased by **$73.6 million (121%)** due to a pre-tax loss in the current year, resulting in an income tax benefit[127](index=127&type=chunk) [Special Project Costs](index=24&type=section&id=Special%20Project%20Costs) This section outlines the costs associated with divestitures, acquisitions, and restructuring initiatives - Total cumulative divestiture costs related to Sahale Snacks and Canada condiment businesses were **$6.4 million**, with no new costs incurred in Q1 2026[128](index=128&type=chunk) - Total cumulative integration costs for the Hostess Brands acquisition reached **$185.3 million**, with $0.4 million recognized in Q1 2026[131](index=131&type=chunk) - Restructuring costs of **$20.7 million** were recognized in Q1 2026 for the Indianapolis manufacturing facility closure, including $4.2 million in employee-related and $16.5 million in other transition costs[132](index=132&type=chunk) [Segment Results](index=25&type=section&id=Segment%20Results) This section provides a detailed breakdown of net sales and profit performance by reportable segment **Segment Net Sales and Profit (Three Months Ended July 31, 2025 vs. 2024, Dollars in millions):** | Segment | Net Sales 2025 | Net Sales 2024 | Net Sales % Change | Segment Profit 2025 | Segment Profit 2024 | Segment Profit % Change | | :-------------------------------- | :------------- | :------------- | :----------------- | :------------------ | :------------------ | :---------------------- | | U.S. Retail Coffee | $717.2 | $623.4 | 15% | $134.2 | $172.6 | (22)% | | U.S. Retail Frozen Handheld and Spreads | $484.7 | $496.8 | (2)% | $114.3 | $119.0 | (4)% | | U.S. Retail Pet Foods | $368.0 | $399.7 | (8)% | $101.3 | $115.3 | (12)% | | Sweet Baked Snacks | $253.2 | $333.7 | (24)% | $34.2 | $74.4 | (54)% | | International and Away From Home | $290.2 | $271.5 | 7% | $65.5 | $48.6 | 35% | [LIQUIDITY AND CAPITAL RESOURCES](index=27&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section evaluates the company's ability to generate and manage cash, including sources of funds and capital structure - Cash and cash equivalents decreased to **$39.3 million** at July 31, 2025, from $69.9 million at April 30, 2025[143](index=143&type=chunk) **Cash Flow Summary (Three Months Ended July 31, Dollars in millions):** | Activity | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Net cash provided by (used for) operating activities | $(10.6) | $172.9 | | Net cash provided by (used for) investing activities | $(197.9) | $(172.4) | | Net cash provided by (used for) financing activities | $178.0 | $(23.0) | | Free cash flow | $(94.9) | $49.2 | - The **$183.5 million** increase in cash used for operating activities was primarily due to lower net income and related tax impacts, partially offset by lower working capital requirements[145](index=145&type=chunk) [Liquidity](index=27&type=section&id=Liquidity) This section discusses the company's primary sources and uses of cash, including operating, investing, and financing activities - Principal sources of funds are cash from operations, commercial paper program borrowings, and revolving credit facility[143](index=143&type=chunk) - Cash used for investing activities in Q1 2026 primarily included a **$126.7 million** increase in derivative cash margin accounts and **$84.3 million** in capital expenditures[146](index=146&type=chunk) - Cash provided by financing activities in Q1 2026 was mainly from a **$300.6 million** net increase in short-term borrowings, partially offset by **$114.4 million** in dividend payments[147](index=147&type=chunk) [Supplier Financing Program](index=27&type=section&id=Supplier%20Financing%20Program) This section describes the company's supplier financing program and the amount of outstanding payment obligations - The company's supplier financing program allows suppliers to sell payment obligations to a third-party financial institution, with **$324.5 million** outstanding at July 31, 2025[148](index=148&type=chunk) [Contingencies](index=28&type=section&id=Contingencies) This section addresses the company's involvement in legal proceedings and other contingent liabilities - The company is involved in class action lawsuits regarding Folgers coffee servings and a claim against Voortman sellers for alleged misrepresentations, with no material adverse effect on financial position currently anticipated for most proceedings[149](index=149&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) [Capital Resources](index=28&type=section&id=Capital%20Resources) This section details the company's capital structure, including debt, equity, and credit facilities **Capital Structure (Dollars in millions):** | Metric | July 31, 2025 | April 30, 2025 | | :------------------ | :------------ | :------------- | | Short-term borrowings | $951.6 | $640.8 | | Long-term debt | $7,038.3 | $7,036.8 | | **Total debt** | **$7,989.9** | **$7,677.6** | | Shareholders' equity | $5,925.9 | $6,082.6 | | **Total capital** | **$13,915.8** | **$13,760.2** | - The company has a **$2.0 billion** unsecured revolving credit facility and a commercial paper program, with **$952.0 million** in short-term borrowings outstanding at July 31, 2025[154](index=154&type=chunk) - Quarterly dividends paid were **$114.4 million** in Q1 2026 (**$1.10 per share**), up from $112.1 million in Q1 2025 ($1.08 per share)[156](index=156&type=chunk) [Material Cash Requirements](index=29&type=section&id=Material%20Cash%20Requirements) This section confirms no material changes to the company's cash requirements since the last annual report - No material changes to material cash requirements were reported as of July 31, 2025, compared to the Annual Report on Form 10-K for April 30, 2025[161](index=161&type=chunk) [NON-GAAP FINANCIAL MEASURES](index=29&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section provides reconciliations and explanations for non-GAAP financial measures used by management - The company uses non-GAAP financial measures (e.g., adjusted gross profit, adjusted operating income, free cash flow) to evaluate internal performance and enhance investor understanding, excluding items like amortization, special project costs, and derivative gains/losses[162](index=162&type=chunk)[163](index=163&type=chunk) **Non-GAAP Reconciliations (Three Months Ended July 31, Dollars in millions, except per share data):** | Metric | 2025 | 2024 | | :------------------------------------------ | :----- | :----- | | Adjusted gross profit | $743.2 | $832.5 | | Adjusted operating income | $370.3 | $447.9 | | Adjusted income | $203.4 | $259.5 | | Adjusted earnings per share – assuming dilution | $1.90 | $2.44 | [CRITICAL ACCOUNTING ESTIMATES AND POLICIES](index=30&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20POLICIES) This section highlights key accounting estimates and policies that require significant management judgment - There were no material changes to the critical accounting estimates and policies previously disclosed in the Annual Report on Form 10-K for the year ended April 30, 2025[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rates, commodity prices, and foreign currency, and strategies to manage these volatilities [Interest Rate Risk](index=30&type=section&id=Interest%20Rate%20Risk) This section discusses the company's exposure to interest rate fluctuations on its debt portfolio - The company is exposed to interest rate risk from fixed- and variable-rate debt, primarily related to U.S. Treasury rates, SOFR, and commercial paper rates[169](index=169&type=chunk) - A hypothetical **100 basis-point decrease** in interest rates at July 31, 2025, would increase the fair value of long-term debt by **$529.3 million**[171](index=171&type=chunk) [Commodity Price Risk](index=31&type=section&id=Commodity%20Price%20Risk) This section details the company's management of commodity price volatility for raw materials and energy costs - The company uses derivatives with maturities generally less than one year to manage price volatility of raw materials (e.g., green coffee, wheat, soybean meal, corn, edible oils) and energy costs[172](index=172&type=chunk) - Gains and losses on commodity derivatives are immediately recognized in cost of products sold, as they do not qualify for hedge accounting[172](index=172&type=chunk) **Potential Loss (Gain) from Hypothetical 10% Change in Commodity Prices (Dollars in millions):** | Metric | July 31, 2025 | April 30, 2025 | | :------ | :------------ | :------------- | | High | $113.5 | $112.7 | | Low | $20.4 | $20.0 | | Average | $52.5 | $49.6 | [Foreign Currency Exchange Risk](index=31&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section addresses the company's exposure to foreign currency fluctuations, primarily in Canadian currency - The company's foreign currency exposure is primarily in Canadian currency, managed with derivatives having maturities generally less than one year[175](index=175&type=chunk)[176](index=176&type=chunk) - A hypothetical **10% change** in exchange rates would not materially impact the fair value of hedged foreign currency positions[176](index=176&type=chunk) - Revenues from customers outside the U.S. represented **3% of net sales** for the three months ended July 31, 2025[177](index=177&type=chunk) [Certain Forward-Looking Statements](index=31&type=section&id=Certain%20Forward-Looking%20Statements) This section provides a cautionary statement regarding forward-looking information and associated risks - The report contains forward-looking statements subject to risks and uncertainties, including integration of Hostess Brands, supply chain disruptions, input cost inflation, consumer preferences, and regulatory changes[178](index=178&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) - Readers are cautioned not to unduly rely on forward-looking statements, which speak only as of the date made, and the company does not undertake to update or revise them[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures and any changes in internal controls over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of July 31, 2025[182](index=182&type=chunk) - A new enterprise performance management system (Oracle Cloud Solutions) was implemented during the quarter, leading to new controls and processes[183](index=183&type=chunk) - No other changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the quarter[183](index=183&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the discussion of legal proceedings and contingencies from the financial statements - Information on legal proceedings is incorporated by reference from Note 14: Contingencies in Part I, Item 1[186](index=186&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section advises readers to consider the risk factors described in the Annual Report on Form 10-K and other filings - Readers should carefully consider risk factors from the Annual Report on Form 10-K for the year ended April 30, 2025, and other filings, as additional unknown risks may also affect the company[187](index=187&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases, primarily from stock plan recipients, during the first quarter of 2026 **Common Stock Purchases (First Quarter of 2026):** | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | | :-------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :----------------------------------------------------------------------------- | | May 1, 2025 - May 31, 2025 | — | $— | — | 1,111,472 | | June 1, 2025 - June 30, 2025 | 46,733 | $95.36 | — | 1,111,472 | | July 1, 2025 - July 31, 2025 | 955 | $104.51 | — | 1,111,472 | | **Total** | **47,688** | **$95.54** | **—** | **1,111,472** | - Shares repurchased were from stock plan recipients in lieu of cash payments, not under a publicly announced repurchase program[188](index=188&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section states that no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the first three months of 2026[190](index=190&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section refers to the Index of Exhibits for a detailed list of documents filed with the report - A detailed list of exhibits is provided in the Index of Exhibits on Page 35 of the report[191](index=191&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) Official attestations to the report's accuracy and compliance [INDEX OF EXHIBITS](index=36&type=section&id=INDEX%20OF%20EXHIBITS) A comprehensive list of all exhibits filed with the report

Financial Data and Key Metrics Changes - The company increased its free cash flow outlook from $875 million to $975 million for the full fiscal year, driven by benefits from the One Big Beautiful Bill Act, which will provide ongoing annual benefits [40][41] - The midpoint guidance for the full year remains at $9, with expectations for overall growth despite increased tariffs impacting costs [9][10][29] Business Line Data and Key Metrics Changes - The coffee segment is expected to see pricing benefits in the mid-20% range, with anticipated volume impacts in the low to mid-teens, leading to overall growth in the low to mid-teens year over year [8][10][56] - Milk Bone is projected to return to growth in the second half of the fiscal year, supported by advertising and innovation, despite cautious consumer spending in discretionary categories [17][19] - The Sweet Baked Snacks segment is undergoing SKU rationalization, with expected savings of $30 million, and profitability is anticipated to improve sequentially throughout the fiscal year [31][65] Market Data and Key Metrics Changes - The company is seeing positive momentum in its coffee portfolio, with strong margins expected in the fourth quarter, and ongoing benefits from stabilization efforts within the Hostess portfolio [35][36] - The away-from-home business continues to perform well, contributing positively to the overall portfolio [44] Company Strategy and Development Direction - The company is focused on strategic investments, consumer-led innovation, and shifting its portfolio towards growth, while managing controllable factors and reacting positively to external challenges [74] - A dedicated sales organization is being implemented to enhance execution and focus on key areas, particularly in the convenience store channel [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the impact of increased tariffs on coffee, which has led to a net $0.25 impact on guidance, but remains optimistic about the resilience of the coffee category and the strength of its brands [57][68] - The company continues to monitor the impact of GLP-1 drugs on consumer behavior but has not observed any significant effects on its product categories thus far [50][62] Other Important Information - The company is actively engaging with industry associations to advocate for favorable trade policies and tariff relief, particularly concerning coffee [49] - The company plans to achieve a three times leverage profile by the end of fiscal 2027 through ongoing debt paydown efforts [41] Q&A Session Summary Question: Updated expectations on coffee pricing benefits due to tariffs - The coffee segment's pricing outlook has shifted to the mid-20s, with additional pricing actions expected in early winter due to increased tariffs [8] Question: Changes in EPS guidance and quarterly performance - The overall profit outlook remains intact, with some profit shifting to the third and fourth quarters due to timing of coffee costs [29] Question: Clarification on SKU rationalization impact - SKU rationalization is ongoing, and while it has not impacted first-quarter volume, it is expected to improve profitability over time [25][31] Question: Future visibility and confidence in fiscal 2027 - The company is optimistic about strong margins in the coffee portfolio and ongoing growth in key brands, providing a positive outlook for fiscal 2027 [35][36] Question: Impact of GLP-1 drugs on consumer behavior - Management has not seen a meaningful impact from GLP-1 drugs on its categories, as the products remain appealing to consumers [50][62] Question: Timing of benefits from SKU rationalization - The company expects to see about $10 million in savings from SKU rationalization in the fourth quarter, with the remaining benefits impacting fiscal 2027 [31] Question: Clarification on tariff impacts and potential exemptions - Should tariff relief be granted, the company would revise its guidance accordingly, but timing factors would affect the realization of benefits [68]