Financial Data and Key Metrics Changes - For fiscal 2025, net sales exceeded $12 billion, representing a 2% organic growth over the prior year, despite falling short of earnings goals [5][12] - 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% [16] - Diluted EPS for the full year was $0.87, with adjusted diluted EPS at $1.37; for the fourth quarter, diluted loss per share was $0.10, while adjusted diluted EPS was $0.32 [17] Business Line Data and Key Metrics Changes - The retail segment faced profitability pressures due to heightened commodity costs, but leading brands like Jennie-O and SPAM maintained strong market positions [6][8] - The foodservice segment outperformed the broader industry, leveraging direct sales and innovation, although it faced challenges from traffic declines and higher input costs [6][8] - The international segment's performance varied, with strong contributions from China but challenges in Brazil impacting overall growth objectives [8][9] Market Data and Key Metrics Changes - The pork market saw a 25% increase in pork bellies and a 10% rise in pork cutouts, while beef remained a significant inflationary pressure throughout the year [12][13] - Turkey supply constraints are expected to continue into the first half of 2026 due to avian illnesses affecting the supply chain [13][14] - The Planters brand experienced a 12% increase in dollar consumption and a 6% increase in volume consumption, indicating recovery in the snack category [58] Company Strategy and Development Direction - The company aims to focus on a protein-centric portfolio, emphasizing consumer needs and expanding brand capabilities to drive growth [20][21] - Strategic priorities for 2026 include consumer obsession, breaking brand boundaries, and becoming future-ready through portfolio reshaping and technological advancements [20][28] - The Transform and Modernize initiative will continue to support margin expansion and operational efficiency [34][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging fiscal 2025 but expressed confidence in returning to growth in fiscal 2026, targeting organic net sales growth of 1%-4% and adjusted operating income growth of 4%-10% [32][33] - The consumer environment remains strained, with expectations of continued value-seeking behavior, impacting demand in both retail and foodservice channels [72] - Management highlighted the importance of agility in responding to market volatility and refining processes for better commodity risk management [70] Other Important Information - The company returned a record $633 million to shareholders in dividends, marking 60 consecutive years of dividend increases [18] - A corporate restructuring resulted in a reduction of approximately 250 positions, aimed at streamlining operations and supporting long-term growth [9][51] Q&A Session Summary Question: Can you unpack guidance further and key factors to consider? - Management expects organic net sales growth of 1%-4% and adjusted operating income growth of 4%-10%, driven by pricing actions and enhanced marketing support [39][40] Question: What is the status of portfolio reshaping? - Portfolio reshaping is an ongoing strategic effort to simplify operations and focus on sustainable long-term growth, including exiting non-strategic businesses [42][43] Question: What are the expectations for turkey markets? - Turkey remains a critical business, with expectations for elevated whole bird prices throughout the year, but ground turkey continues to perform well [46][49] 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 expected cost to implement, with a quick payback within the first 12 months [51][52] Question: How is the Planters brand performing? - Planters is back in growth mode, with a 12% increase in dollar consumption and a 13% increase in distribution, although profit recovery is impacted by mix shifts [57][58] Question: What is the outlook for the Brazil venture? - The Brazil venture is under review, with ongoing assessments of the international portfolio to determine strategic fit and performance [62][64] Question: How does the consumer environment factor into the outlook? - The consumer environment is expected to remain challenging, with continued value-seeking behavior influencing demand across channels [72][73]