Financial Data and Key Metrics Changes - For fiscal 2025, the company reported net sales exceeding $12 billion, reflecting a 2% organic growth compared to the previous year, despite falling short of earnings goals [7][13] - Operating income for fiscal 2025 was $719 million, with an adjusted operating income of just over $1 billion, resulting in an operating margin of 5.9% and an adjusted operating margin of 8.4% [17] - Diluted EPS for the full year was $0.87, with adjusted diluted EPS at $1.37; however, the fourth quarter saw a diluted loss per share of $0.10 and adjusted diluted EPS of $0.32 [18] Business Line Data and Key Metrics Changes - The retail segment maintained strong brand positions, with brands like Jennie-O and SPAM contributing to growth, although profitability was pressured due to input cost increases [8][9] - The foodservice segment outperformed the broader industry, leveraging direct sales and innovation, but faced challenges from traffic declines and higher input costs [9] - The international segment's performance varied by geography, with China being a strong contributor, while Brazil faced challenges impacting growth objectives [9][10] Market Data and Key Metrics Changes - The company experienced over 500 basis points of raw material cost inflation in the fourth quarter, with pork bellies increasing approximately 25% and beef remaining a significant inflationary pressure [14][15] - Turkey supply constraints due to avian illnesses impacted the market, with expectations of continued challenges into the first half of 2026 [15][16] Company Strategy and Development Direction - The company aims to build on its protein-centric portfolio, focusing on consumer needs and expanding brand capabilities to drive growth [21][22] - Strategic priorities for 2026 include consumer obsession, breaking brand boundaries, and becoming future-ready through portfolio reshaping and technological advancements [23][30] - The Transform & Modernize initiative will continue to support margin expansion and operational efficiency, although specific savings will not be reported separately going forward [35][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer environment with elevated inflation impacting performance, but expressed confidence in returning to growth in fiscal 2026 [7][33] - The guidance for fiscal 2026 includes organic net sales growth of 1%-4% and adjusted operating income growth of 4%-10%, with expectations of improved turkey markets and continued pricing actions [33][34] Other Important Information - The company returned a record $633 million to shareholders in dividends, marking 60 consecutive years of dividend increases [19] - A corporate restructuring resulted in a reduction of approximately 250 positions, aimed at streamlining operations and reallocating resources for growth [10][52] Q&A Session Summary Question: Can you unpack guidance further and discuss key factors? - Management highlighted expectations for organic net sales growth of 1%-4% and emphasized the strength of the protein-centric portfolio and pricing actions to support growth [39][40] Question: What are the expected savings from restructuring? - The restructuring is expected to deliver gross savings in the range of two to three times the cost to implement, with a quick payback within the first 12 months [52][53] Question: How is the Planters brand performing? - The Planters brand is back in growth mode, with recent data showing over 12% dollar consumption growth and a 13% increase in distribution [58][59] Question: What is the outlook for the Brazil venture? - Management indicated that the Brazil venture is under review, with a focus on strategic priorities and performance in other international markets like China [62][64] Question: How does the consumer environment factor into the outlook? - The consumer environment is expected to remain strained, with continued value-seeking behavior influencing demand throughout 2026 [75][76]