Financial Data and Key Metrics Changes - In the fourth quarter, reported net sales increased by 1%, while organic net sales declined by 3% due to unfavorable shipment timing and divestitures [9][27] - Adjusted EBIT decreased by 2%, and adjusted EPS was down by 2% to $0.62, reflecting the impact of tariffs and divestitures [29][32] - For the full year, net sales grew by 6%, primarily driven by the Sovos Brands acquisition, while adjusted EBIT increased by 2% [9][29] Business Line Data and Key Metrics Changes - Meals and Beverages organic net sales decreased by 3% in Q4, with volume and mix down by 4%, while dollar consumption grew by 1% [15][32] - Snacks reported a 2% increase in net sales, but organic net sales decreased by 2%, driven by lower volume and mix [33][34] - The consumption of leadership brands in Meals and Beverages increased by 1% in Q4, while Snacks leadership brand consumption declined by 2% [13][15] Market Data and Key Metrics Changes - In-market consumption for the overall category declined by 1%, with consumers remaining cautious in their spending [7][8] - The broth category saw a 7% consumption growth, driven by increased usage among millennials and boomers [16] - The Italian sauce category grew by 2% year-over-year, with Campbell's Italian sauce portfolio outpacing this at 4% growth [17] Company Strategy and Development Direction - The company plans to increase marketing investments and focus on innovation to support brand growth, particularly in the Meals and Beverages segment [8][25] - A new growth office has been established to align innovation with consumer needs, emphasizing health and elevated taste experiences [11][25] - The company is committed to mitigating tariff impacts through cost savings initiatives and strategic pricing actions [25][37] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly seeking value through at-home cooking, which supports growth in the Meals and Beverages segment [7][8] - The company anticipates a challenging operating environment in fiscal 2026, with expected declines in adjusted EBIT and EPS due to tariffs and divestitures [40][41] - Management expressed confidence in the ability to navigate challenges while capturing growth opportunities through strategic investments [42] Other Important Information - The company plans to discontinue the use of FD&C colors in its products by the second half of fiscal 2026 [12] - The Sovos Brands acquisition has been accretive to adjusted EPS and has performed well since its integration [29][30] - The company generated $1.13 billion in operating cash flow for fiscal 2025, with capital expenditures at $426 million [35][36] Q&A Session Summary Question: Can you provide more detail on the outlook for fiscal 2026? - Management highlighted the importance of brand support and innovation, with expectations for stabilization in the snacking business in the second half of the year [45][46] Question: What are the expectations for the snacks category stabilization? - Management noted that snacking occasions are stable, and the company is focused on premiumization and flavor exploration to connect with consumers [56][58] Question: How does the company plan to address tariff impacts? - Management discussed a combination of inventory management, supplier collaboration, and surgical pricing initiatives to mitigate tariff impacts [65][72]