CONAGRA BRANDS INC. (CAG)

CIK: 0000023217. SIC: 2000 Food and Kindred Products. Latest 10-K as of: 2025-07-10.
SIC breadcrumb: Manufacturing > Food And Kindred Products > SIC 2000 Food and Kindred Products
SEC company page: https://www.sec.gov/edgar/browse/?CIK=23217. Latest filing source: 0001558370-25-009180.
Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	11,612,800,000	USD	2025	2025-07-10
Net income	1,152,400,000	USD	2025	2025-07-10
Assets	20,933,900,000	USD	2025	2025-07-10
Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-07-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000023217.json. Derived margins are computed from the extracted annual SEC facts.
Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.
Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue		7,826,900,000	7,938,300,000	9,538,400,000	11,054,400,000	11,184,700,000	11,535,900,000	12,277,000,000	12,050,900,000	11,612,800,000
Net income	-677,000,000	639,300,000	808,400,000	678,300,000	840,100,000	1,298,800,000	888,200,000	683,600,000	347,200,000	1,152,400,000
Operating income	1,223,100,000	1,240,000,000	1,412,500,000	1,641,800,000	1,815,600,000	2,141,000,000	1,587,600,000	1,075,300,000	852,800,000	1,364,600,000
Gross profit								3,264,800,000	3,333,400,000	3,003,500,000
Diluted EPS	-1.56	1.46	1.98	1.52	1.72	2.66	1.84	1.42	0.72	2.40
Assets	13,390,600,000	10,096,300,000	10,389,500,000	22,213,800,000	22,304,000,000	22,195,600,000	22,435,100,000	22,052,600,000	20,862,300,000	20,933,900,000
Liabilities	9,595,800,000	6,018,500,000	6,632,900,000	14,750,100,000	14,353,300,000	13,564,200,000	13,572,900,000	13,245,300,000	12,351,000,000	12,001,200,000
Stockholders' equity	3,713,600,000	3,990,800,000	3,676,200,000	7,384,600,000	7,876,100,000	8,551,800,000	8,787,700,000	8,736,800,000	8,440,400,000	8,932,700,000
Cash and cash equivalents	798,100,000	251,400,000	128,000,000	236,600,000	553,300,000	79,200,000	83,300,000	93,300,000	77,700,000	68,000,000
Net margin		8.17%	10.18%	7.11%	7.60%	11.61%	7.70%	5.57%	2.88%	9.92%
Operating margin		15.84%	17.79%	17.21%	16.42%	19.14%	13.76%	8.76%	7.08%	11.75%
Financial Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-07-10. Report date: 2025-05-25.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide a summary of significant factors relevant to our financial performance and condition. The discussion and analysis should be read together with our consolidated financial statements and related notes in Item 8, Financial Statements and Supplementary Data. Results for the fiscal year ended May 25, 2025 are not necessarily indicative of results that may be attained in the future.

FORWARD-LOOKING STATEMENTS

The information contained in this report includes forward-looking statements within the meaning of the federal securities laws. Examples of forward-looking statements include statements regarding our expected future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as “may”, “will”, “anticipate”, “expect”, “believe”, “estimate”, “intend”, “plan”, “should”, “seek”, or comparable terms.

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include: risks associated with general economic and industry conditions, including inflation, reduced consumer confidence and spending, declining benefits or increased limitations under government food assistance programs for consumers, rising unemployment, recessions, increased energy costs, supply chain challenges, increased tariffs and taxes, labor cost increases or shortages, currency rate fluctuations, actual or threatened hostilities or war, and or other geopolitical conflicts; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, health pandemics or outbreaks of disease, or other geopolitical uncertainty; disruptions or inefficiencies in our supply chain and/or operations; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to the Company’s competitive environment, cost structure, and related market conditions; risks related to our ability to respond to changing consumer preferences including health and wellness perceptions and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the seasonality of our business; risks associated with our contract manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations including to address climate change; risks related to the Company’s ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon pricing or carbon taxes; risks related to a material failure in or breach of our or our vendors’ information technology systems and other cybersecurity incidents; risks related to our ability to identify, attract, hire, train, retain and develop qualified personnel; risk of increased pension, labor or people-related expenses; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks relating to

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our ability to protect our intellectual property rights; risks relating to acquisition, divestiture, joint venture or investment activities; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the U.S. Securities and Exchange Commission (the “SEC”). We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law. 

The discussion that follows should be read together with the consolidated financial statements and related notes contained in this report. Results for fiscal 2025 are not necessarily indicative of results that may be attained in the future.

EXECUTIVE OVERVIEW

Conagra Brands, Inc. (the “Company”, “Conagra Brands”, “we”, “us”, or “our”), headquartered in Chicago, is one of North America’s leading branded food companies. We combine a 100-year history of making quality food with agility and a relentless focus on collaboration and innovation. The company’s portfolio is continuously evolving to satisfy consumers’ ever-changing food preferences. Conagra’s brands include Birds Eye®, Duncan Hines®, Healthy Choice®, Marie Callender’s®, Reddi-wip®, Slim Jim®, Angie’s® BOOMCHICKAPOP®, and many more.

Fiscal 2025 Results

Fiscal 2025 performance compared to fiscal 2024 reflected a decrease in net sales, with organic (excludes the impacts of foreign exchange, acquisitions, and divestitures) decreases in our Grocery & Snacks, Refrigerated & Frozen, and Foodservice segments, partially offset by an increase in our International segment. Overall gross profit decreased primarily as a result of lower net sales, input cost inflation, and unfavorable operating leverage, partially offset by productivity. Excluding items impacting comparability, overall segment operating profit decreased in all of our segments compared to the prior year. Corporate expenses and selling, general and administrative (“SG&A”) expenses were higher primarily due to items impacting comparability, as discussed below, partially offset by lower incentive compensation expense. We recognized higher equity method investment earnings, lower interest expense, and lower income tax expense, in each case compared to fiscal 2024. Excluding items impacting comparability, our effective tax rate was lower compared to fiscal 2024.

Diluted earnings per share were $2.40 and $0.72 in fiscal 2025 and 2024, respectively. The increase in diluted earnings per share reflected higher net income. See “Items Impacting Comparability” below as several significant items affected the comparability of year-over-year results.

Trends Impacting our Business

Our industry continues to be impacted by shifting consumer behavior, commodity cost fluctuations, exchange rate volatility, labor cost inflation, input cost inflation, supply chain pressures, and other global macroeconomic challenges. Although rapidly changing trade policies and announcements of potential tariff increases caused increased uncertainty in the second half of fiscal 2025, we saw little impact to our results in fiscal 2025 due to delayed implementation or effect of the announced tariffs. Throughout fiscal 2025, we experienced an elevated amount of input cost inflation and negative impacts from foreign exchange rates, which we were able to partially offset through our on-going productivity initiatives.

Our industry is anticipating increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies including increasing or fluctuating tariffs. We expect inflation and tariffs to negatively impact our costs of goods sold in fiscal 2026. We expect consumer trends to continue to evolve and our volumes to improve over time; however, in the near-term, we expect economic pressures on consumers, including the challenges of high inflation and the impact of increased or fluctuating tariffs, and related price increases, to continue to negatively impact our volumes throughout fiscal 2026. We also expect foreign exchange rates to continue to negatively impact our earnings through fiscal 2026. We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business, consolidated results of operations, and financial condition.

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Items Impacting Comparability

Items of note impacting comparability of results for fiscal 2025 included the following:

●

income tax benefits of $253.5 million associated with the release of valuation allowances on certain deferred tax assets based primarily on interactions with the taxing authorities,

●

charges totaling $101.7 million ($77.0 million after-tax) in connection with our restructuring plans,

●

net charges totaling $88.7 million ($67.0 million after-tax) related to legacy legal matters,

●

charges of $72.1 million ($55.4 million after-tax) related to the impairments of certain brand intangible assets,

●

charges totaling $29.5 million ($24.4 million after-tax) primarily related to the impairment of a business held for sale,

●

a gain of $17.0 million ($12.8 million after-tax) associated with insurance proceeds from the previous fire that occurred at one of our manufacturing facilities,

●

a non-cash settlement gain of $13.0 million ($9.8 million after-tax) associated with a partial transfer of our U.S. defined benefit pension plan obligation to a third-party insurance provider through the purchase of an annuity contract, and

●

charges of $7.2 million ($5.5 million after-tax) related to restructuring activities of the Ardent Mills joint venture.

Items of note impacting comparability of results for fiscal 2024 included the following:

●

charges totaling $956.7 million ($847.7 million after-tax) related to the impairments of goodwill and certain brand intangible assets,

●

charges totaling $66.6 million ($49.9 million after-tax) in connection with our restructuring plans,

●

charges totaling $36.4 million ($36.0 million after-tax) related to the impairment of a business held for sale,

●

net charges totaling $34.8 million ($26.2 million after-tax) related to legacy legal matters,

●

a benefit of $11.5 million ($8.7 million after-tax) related primarily to our year-end remeasurement of an hourly pension plan liability, and

●

a net gain of $8.7 million ($6.6 million after-tax) primarily associated with insurance proceeds from the previous fire that occurred at one of our manufacturing facilities.

Segment presentation of gains and losses from derivatives used for economic hedging of anticipated commodity input costs and economic hedging of foreign currency exchange rate risks of anticipated transactions are discussed in the segment review below.

SEGMENT REVIEW

We reflect our results of operations in four reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice.

Grocery & Snacks

The Grocery & Snacks reporting segment principally includes branded, shelf-stable food products sold in various retail channels in the United States.

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Refrigerated & Frozen

The Refrigerated & Frozen reporting segment principally includes branded, temperature-controlled food products sold in various retail channels in the United States.

International

The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States.

Foodservice

The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces, and a variety of custom-manufactured culinary products that are packaged for sale to restaurants and other foodservice establishments primarily in the United States.

Presentation of Derivative Gains (Losses) from Economic Hedges of Forecasted Cash Flows in Segment Results

Derivatives used to manage commodity price risk and foreign currency risk are not designated for hedge accounting treatment. We believe these derivatives provide economic hedges of certain forecasted transactions. As such, these derivatives are generally recognized at fair market value with realized and unrealized gains and losses recognized in general corporate expenses. The gains and losses are subsequently recognized in the operating results of the reporting segments in the period in which the underlying transaction being economically hedged is included in earnings. In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results, immediately. See Note 17, “Derivative Financial Instruments”, to the Consolidated Financial Statements contained in this report for further discussion.

Presentation of Information

Below is a detailed discussion and comparison of our results of operations for the fiscal years ended May 25, 2025 and May 26, 2024. For a discussion of changes from the fiscal year ended May 28, 2023 to the fiscal year ended May 26, 2024, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended May 26, 2024 (filed July 11, 2024).

Fiscal 2025 compared to Fiscal 2024

Net Sales





















($ in millions)



Fiscal 2025



Fiscal 2024



% Inc



Reporting Segment

Net Sales

Net Sales

(Dec)



Grocery & Snacks



$

4,899.3



$

4,958.7



(1.2)%



Refrigerated & Frozen





4,662.3





4,865.5



(4.2)%



International





956.5





1,078.3



(11.3)%



Foodservice





1,094.7





1,148.4



(4.7)%



Total



$

11,612.8



$

12,050.9



(3.6)%





Net sales for fiscal 2025 in our Grocery & Snacks segment included a decrease in organic volumes and price/mix of 1.1% and 0.9%, respectively, when compared to fiscal 2024. Price/mix was impacted by an increase in strategic trade investments. The acquisitions of Sweetwood Smoke & Co. in August 2024 and an existing contract manufacturer of our cooking spray products in July 2024 contributed $38.0 million to our Grocery & Snacks segment net sales during fiscal 2025.

Net sales for fiscal 2025 in our Refrigerated & Frozen segment included a decrease in price/mix of 3.5% compared to fiscal 2024, primarily attributable to an increase in strategic trade investments. Volume decreased by 0.7% compared to fiscal 2024. During fiscal 2025, the largest impact to our volumes was a result of supply constraints impacting the company’s frozen meals containing chicken and frozen vegetable products. Additionally, we estimate that net sales during fiscal 2025 were impacted by approximately $24 million due to temporary manufacturing disruptions in our Hebrew National® business during the key grilling season.

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Net sales for fiscal 2025 in our International segment reflected a 5.7% decrease due to unfavorable foreign exchange rates, a 3.9% increase in organic price/mix, and a 3.4% decrease in organic volume, in each case compared to fiscal 2024. The unfavorable foreign exchange rates were primarily due to the devaluation of the Mexican Peso relative to the US dollar. Fiscal 2025 and 2024 included $23.6 million and $93.2 million, respectively, of net sales related to our ownership stake in Agro Tech Foods Limited (“ATFL”), which was sold in the first quarter of fiscal 2025.

Net sales for fiscal 2025 in our Foodservice segment included a decrease in organic volume of 8.1% compared to fiscal 2024, driven by the ongoing softness in restaurant traffic and the impact of lost business from the prior year. Organic price/mix increased by 3.3% compared to fiscal 2024, reflecting inflation-driven pricing. Additionally, we estimate that net sales in our Foodservice segment during fiscal 2025 were impacted by approximately $3 million due to the temporary manufacturing disruptions in our Hebrew National® business.

SG&A Expenses (Includes general corporate expenses)

SG&A expenses totaled $1.54 billion for fiscal 2025, an increase of $49.8 million compared to fiscal 2024. SG&A expenses for fiscal 2025 reflected the following:

Items impacting comparability of earnings

●

net charges of $91.1 million in connection with our restructuring plans and

●

net charges totaling $88.7 million related to legacy legal matters.

Other changes in expenses compared to fiscal 2024

●

a decrease in short-term incentive expense of $43.9 million primarily due to a decrease in the estimated level of achievement of certain performance targets,

●

a decrease in advertising and promotion expense of $26.4 million,

●

an increase in salary, wage, and fringe benefit expense of $18.4 million due to merit and employee insurance costs,

●

a decrease in consulting and professional fees of $11.8 million, partially due to the implementation of a new enterprise resource planning software system in Mexico in the prior year, and

●

an increase in share-based payment expense of $10.5 million.

SG&A expenses for fiscal 2024 included the following items impacting the comparability of earnings:

●

net charges of $47.5 million in connection with our restructuring plans,

●

net charges of $34.8 million related to legacy legal matters, and

●

a net gain of $8.1 million primarily associated with insurance proceeds from the previous fire that occurred at one of our manufacturing facilities.

Segment Operating Profit





















($ in millions)



Fiscal 2025



Fiscal 2024



% Inc



Reporting Segment

Operating Profit

Operating Profit

(Dec)



Grocery & Snacks



$

1,017.0



$

1,100.3



(7.6)%



Refrigerated & Frozen





651.7





815.9



(20.1)%



International





143.9





155.1



(7.1)%



Foodservice





131.0





151.3



(13.4)%





Segment operating profit in our Grocery & Snacks segment for fiscal 2025 reflected a decrease in gross profits of $86.6 million compared to fiscal 2024. The decrease in gross profit was driven by the decrease in net sales discussed above, the impacts of input cost

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inflation, and unfavorable operating leverage, partially offset by productivity. In addition, we recognized a benefit of $11.3 million and $14.4 million in fiscal 2025 and 2024, respectively, related to insurance proceeds for lost sales from our fiscal 2023 brand recall on Armour Star®. The decrease in gross profits was partially offset by lower SG&A expenses compared to fiscal 2024. 

Segment operating profit in our Refrigerated & Frozen segment for fiscal 2025 reflected a decrease in gross profits of $211.3 million compared to fiscal 2024. The decrease was driven by the net sales decline discussed above, impacts of input cost inflation, and unfavorable operating leverage, partially offset by productivity. In fiscal 2025, we also experienced manufacturing challenges at the primary facility that prepares and cooks chicken used in our frozen meals. This resulted in increased product costs from utilizing third-party manufacturers, as well as abnormal inventory costs while we temporarily stopped production. In addition, we estimate that gross profits during fiscal 2025 were negatively impacted by approximately $10 million, primarily due to lost profits, abnormal manufacturing variances, and certain inventory write-offs resulting from the temporary manufacturing disruptions in our Hebrew National® business. The decrease in gross profits was partially offset by lower SG&A expenses compared to fiscal 2024, which included a decrease of $20.9 million in advertising and promotion expenses.

Segment operating profit in our International segment for fiscal 2025 reflected a decrease in gross profits of $29.9 million compared to fiscal 2024. The decrease was driven by a reduction in profit associated with the sale of our ownership stake in ATFL, the impacts of input cost inflation, and unfavorable foreign exchange rates, partially offset by productivity. The decrease in gross profits was partially offset by lower SG&A expenses, including a decrease of $5.1 million in advertising and promotion expenses due primarily to the sale of our ownership stake in ATFL.

Segment operating profit in our Foodservice segment for fiscal 2025 reflected a decrease in gross profits of $19.1 million compared to fiscal 2024. The decrease in gross profits was driven by the net sales declines discussed above, the impacts of input cost inflation, and unfavorable operating leverage, partially offset by productivity.

Pension and Postretirement Non-service Income

In fiscal 2025, pension and postretirement non-service income was $25.9 million, an increase of $15.6 million compared to fiscal 2024. Fiscal 2025 reflected lower interest costs and a non-cash settlement gain of $13.0 million associated with a partial transfer of our U.S. defined benefit pension plan obligation to a third-party insurance provider through the purchase of an annuity contract. Fiscal 2024 included a benefit of $11.5 million related primarily to our annual remeasurement of an hourly pension plan liability.

Interest Expense, Net

In fiscal 2025, net interest expense was $416.7 million, a decrease of $13.8 million, or 3.2%, from fiscal 2024. The decrease was driven by an overall reduction of our debt balances. See Note 4, “Long-Term Debt”, to the Consolidated Financial Statements contained in this report for further discussion.

Equity Method Investment Earnings

We include our share of the earnings of certain affiliates based on our economic ownership interest in the affiliates. Our most significant affiliate is the Ardent Mills joint venture. Our share of earnings from our equity method investment earnings were $182.4 million and $177.6 million for fiscal 2025 and 2024, respectively. Ardent Mills earnings for fiscal 2025 reflected improved commodity revenue, partially offset by continued lower volume trends as seen throughout the industry. Results for fiscal 2025 included charges of $7.2 million related to Ardent Mills restructuring activities.

Income Taxes

Our income tax expense was $3.7 million and $262.5 million in fiscal 2025 and 2024, respectively. The decrease in our income tax expense was principally related to a release of a valuation allowance from a federal audit settlement that gave rise to a $225.8 million tax benefit in fiscal 2025. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was approximately 0.3% and 43.0% for fiscal 2025 and 2024, respectively. See Note 14, “Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for a further discussion on the change in effective tax rates.

We expect our effective tax rate in fiscal 2026, exclusive of any unusual transactions or tax events, to be approximately 23%.

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Earnings Per Share

Diluted earnings per share in fiscal 2025 and 2024 were $2.40 and $0.72, respectively. The increase in diluted earnings per share reflected higher net income. See “Items Impacting Comparability” above as several significant items affected the comparability of year-over-year results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity and Capital

The primary objective of our financing strategy is to maintain a prudent capital structure that provides us flexibility to pursue our growth objectives. We use a combination of equity and short- and long-term debt. We use short-term debt principally to finance ongoing operations, including our seasonal requirements for working capital (accounts receivable, prepaid expenses and other current assets, and inventories, less accounts and other payables, accrued payroll, and other accrued liabilities). We strive to maintain solid investment grade credit ratings.

Management believes that existing cash balances, cash flows from operations, existing credit facilities, our commercial paper program, and access to capital markets will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, other contractual obligations, and payment of anticipated quarterly dividends for at least the next twelve months and the foreseeable future thereafter.

Borrowing Facilities and Long-Term Debt

At May 25, 2025, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $2.0 billion (subject to increase to a maximum aggregate principal amount of $2.5 billion with the consent of the lenders). The Revolving Credit Facility matures on August 26, 2027 and is unsecured. The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of May 25, 2025, there were no outstanding borrowings under the Revolving Credit Facility. On June 27, 2025, subsequent to our fiscal year end, we terminated and replaced our existing revolving credit facility by entering into an amendment which extends the maturity date to June 27, 2030.

We had $259.0 million outstanding under our commercial paper program as of May 25, 2025 and $586.0 million outstanding as of May 26, 2024. The highest level of borrowings during fiscal 2025 was $1.0 billion.

During the fourth quarter of fiscal 2025, we entered into an unsecured Term Loan with a financial institution and borrowed the full principal amount, $200.0 million, available thereunder (the “2025 Term Loan”). The net proceeds were used to repay outstanding borrowings under our commercial paper program. On June 4, 2025, subsequent to our fiscal year end, we repaid $100.0 million of the $200.0 million aggregate principal amount outstanding under the 2025 Term Loan with a portion of the proceeds received in connection with the sale of our Chef Boyardee® business. The 2025 Term Loan matures on October 29, 2025.

During the fourth quarter of fiscal 2024, we entered into an unsecured Term Loan with a financial institution and borrowed the full principal amount, $300.0 million, available thereunder (the “2024 Term Loan”). During the fourth quarter of fiscal 2025, we entered into a letter agreement extending the maturity date of the 2024 Term Loan to October 29, 2025. On June 4, 2025, subsequent to our fiscal year end, we repaid $150.0 million of the $300.0 million aggregate principal amount outstanding under the 2024 Term Loan with a portion of the proceeds received in connection with the sale of our Chef Boyardee® business.

During the second quarter of fiscal 2025, we repaid the remaining $250.0 million aggregate principal amount outstanding under our unsecured Term Loan Agreement, dated August 26, 2023 (the “2023 Term Loan”). The repayment was primarily funded by operating cash flows.

See Note 4, “Long-Term Debt” and Note 5, “Credit Facilities and Borrowings”, to the Consolidated Financial Statements contained in this report for additional information on our debt transactions. The weighted-average coupon interest rate of the long-term debt obligations outstanding as of May 25, 2025, was approximately 4.9%.

We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt at maturity or otherwise, from operating cash flows, our commercial paper program, access to the capital markets, and our Revolving Credit Facility. We have $1.0

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billion aggregate principal amount of 4.6% senior notes maturing in November 2025 that we expect to pay and/or refinance using available sources which may include the investment grade note market, bank loans, commercial paper, and cash on hand. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at all.

As of the end of fiscal 2025, our senior long-term debt ratings were all investment grade. A significant downgrade in our credit ratings would not affect our ability to borrow amounts under the Revolving Credit Facility, although borrowing costs would increase. A downgrade of our short-term credit ratings would impact our ability to borrow under our commercial paper program by negatively impacting borrowing costs and causing shorter durations, as well as making access to commercial paper more difficult, or impossible.

Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense not be less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed 4.5 to 1.0. Each ratio is to be calculated on a rolling four-quarter basis. As of May 25, 2025, we were in compliance with all financial covenants.

Equity and Dividends

We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board. Under our current share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. During fiscal 2025, we repurchased 2.1 million shares of our common stock under this authorization for an aggregate of $64.0 million. The Company’s total remaining share repurchase authorization as of May 25, 2025 was $852.6 million.

On April 2, 2025, we announced that our Board had authorized a quarterly dividend payment of $0.35 per share, which was paid on May 29, 2025, to stockholders of record as of the close of business on April 28, 2025. Subsequent to our fiscal year end, on July 9, 2025, we announced that our Board had authorized a quarterly dividend of $0.35 per share to be paid on August 28, 2025 to stockholders of record as of the close of business on July 30, 2025.

Contractual Obligations

As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs. In addition to principal and interest payments on our outstanding long-term debt and notes payable balances, discussed above, our contractual obligations primarily consist of lease payments, income taxes, pension and postretirement benefits, and unconditional purchase obligations.

A summary of our operating and finance lease obligations as of May 25, 2025 can be found in Note 15, “Leases”, to the Consolidated Financial Statements contained in this report.

The liability for gross unrecognized tax benefits related to uncertain tax positions was $11.0 million as of May 25, 2025. See Note 14, “Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for information related to income taxes.

As of May 25, 2025, we had an aggregate funded pension asset of $253.0 million and an aggregate unfunded postretirement benefit obligation totaling $48.3 million. We expect to make payments totaling approximately $11.0 million and $6.6 million in fiscal 2026 to fund our pension and postretirement plans, respectively. See Note 18, “Pension and Postretirement Benefits”, to the Consolidated Financial Statements and “Critical Accounting Estimates – Employee-Related Benefits” contained in this report for further discussion of our pension obligation and factors that could affect estimates of these obligations.

As of May 25, 2025, our unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as “take-or-pay” contracts) totaled approximately $2.89 billion. Approximately $1.73 billion of this balance is due in fiscal 2026. Included in this amount are open purchase orders and other supply agreements totaling approximately $1.37 billion, which are generally settleable in the ordinary course of business in less than one year. Warehousing service agreements totaling approximately $916 million make up a majority of our remaining unconditional purchase obligations with various terms of up to 10 years.

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We expect to have sufficient cash flows from the above cited sources to meet the material cash requirements of these contractual obligations as they become settleable in the ordinary course of business.

Capital Expenditures

We continue to make investments in our business and operating facilities. Our preliminary estimate of capital expenditures for fiscal 2026 is approximately $450 million.

Cash Flows

In fiscal 2025, we used $11.0 million of cash, which was the net result of $1.69 billion generated from operating activities, $542.2 million used in investing activities, $1.16 billion used in financing activities, and a decrease of $2.4 million due to the effects of changes in foreign currency exchange rates.

Cash generated from operating activities totaled $1.69 billion in fiscal 2025, as compared to $2.02 billion generated in fiscal 2024. The decrease in operating cash flows for fiscal 2025 compared to fiscal 2024 was primarily driven by lower operating profits, lower dividend payments received from one of our equity method investments, and higher inventory balances. These decreases were partially offset by the accelerated receipt of our outstanding receivables in exchange for a slightly higher prompt pay discount, which increased our cash flow from operations by approximately $140 million. Operating cash flows in fiscal 2025 also benefited from lower tax payments as a result of lower taxable income and recent interactions with the U.S. Internal Revenue Service (“IRS”) allowing for additional tax deductions.

Cash used in investing activities totaled $542.2 million in fiscal 2025 compared to $375.0 million in fiscal 2024. Investing activities in fiscal 2025 consisted primarily of capital expenditures totaling $389.3 million, and the purchases of an existing contract manufacturer and Sweetwood Smoke & Co. for a total of $230.6 million, net of cash acquired, which were partially offset by net proceeds totaling $76.8 million from the sale of our ownership stake in ATFL. Investing activities in fiscal 2024 consisted primarily of capital expenditures totaling $388.1 million.

Cash used in financing activities totaled $1.16 billion in fiscal 2025 compared to $1.66 billion in fiscal 2024. Financing activities in fiscal 2025 principally reflected repayments of long-term debt of $281.3 million, net short-term borrowing repayments of $125.6 million, cash dividends paid of $669.2 million, and common stock repurchases of $64.0 million. Financing activities in fiscal 2024 principally reflected repayments of long-term debt of $1.77 billion, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $290.6 million, and cash dividends paid of $659.3 million.

Cash Held by International Subsidiaries

The Company had cash and cash equivalents of $68.0 million at May 25, 2025 and $77.7 million at May 26, 2024, of which $61.6 million at May 25, 2025 and $66.7 million at May 26, 2024 was held in foreign countries. A deferred tax liability is provided for certain undistributed foreign earnings that are not considered to be indefinitely reinvested or cannot be remitted in a tax-neutral transaction. Other undistributed foreign earnings are invested indefinitely and therefore we have not provided deferred taxes on those earnings.

CRITICAL ACCOUNTING ESTIMATES

The process of preparing financial statements requires the use of estimates on the part of management. The estimates used by management are based on our historical experiences combined with management’s understanding of current facts and circumstances. Certain of our accounting estimates are considered critical as they are both important to the portrayal of our financial condition and results and require significant or complex judgment on the part of management. The following is a summary of certain accounting estimates considered critical by management.

Our Audit/Finance Committee has reviewed management’s development, selection, and disclosure of the critical accounting estimates.

Marketing Costs—We offer various forms of advertising, trade promotions, and consumer incentives which are primarily recorded as a reduction in revenue. Advertising costs are expensed as incurred and recorded in SG&A expenses.

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The methodologies for determining trade promotions and consumer incentives are dependent on local customer pricing practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized as a reduction of revenue at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period.

We have recognized trade promotion and advertising liabilities of $131.5 million as of May 25, 2025. Changes in the assumptions used in estimating the cost of any individual customer marketing program would not result in a material change in our results of operations or cash flows.

Income Taxes—Our income tax expense is based on our income, statutory tax rates, and tax planning opportunities available in the various jurisdictions in which we operate. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining our income tax expense and in evaluating our tax positions, including evaluating uncertainties. Management reviews tax positions at least quarterly and adjusts the balances as new information becomes available. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the tax bases of assets and liabilities and their carrying amounts in our consolidated balance sheets, as well as from net operating loss and tax credit carryforwards. Management evaluates the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings, and available tax planning strategies. These estimates of future taxable income inherently require significant judgment. Management uses historical experience and short and long-range business forecasts to develop such estimates. Further, we employ various prudent and feasible tax planning strategies to facilitate the recoverability of future deductions. To the extent management does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established.

Further information on income taxes is provided in Note 14, “Pre-tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report.

Employee-Related Benefits—We incur certain employment-related expenses associated with our pension plans. In order to measure the annual expense associated with these pension benefits, management must make a variety of estimates including discount rates used to measure the present value of certain liabilities, assumed rates of return on assets set aside to fund these expenses, and anticipated mortality rates. The estimates used by management are based on our historical experience as well as current facts and circumstances. We use third-party specialists to assist management in appropriately measuring the expense associated with these pension benefits. Different estimates used by management could result in us recognizing different amounts of expense over different periods of time.

The Company uses a split discount rate (the “spot-rate approach”) for the U.S. plans and certain foreign plans. The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost.

We have recognized a pension liability of $89.8 million and $95.9 million as of the end of fiscal 2025 and 2024, respectively. We also have recognized a pension asset of $342.8 million and $260.1 million as of the end of fiscal 2025 and 2024, respectively, as certain individual plans of the Company had a positive funded status.

We recognize cumulative changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plan’s projected benefit obligation (“the corridor”) in current period expense annually as of our measurement date, which is our fiscal year-end, or when measurement is required otherwise under accounting principles generally accepted in the United States of America.

We recognized a pension benefit from Company plans of $19.6 million, $0.6 million, and $13.9 million in fiscal 2025, 2024, and 2023, respectively. Such amounts reflect the year-end write-off of actuarial losses (gains) in excess of 10% of our pension liability of $(3.5) million, $(12.5) million, and $0.1 million in fiscal 2025, 2024, and 2023, respectively. This also reflected expected returns on plan assets of $146.3 million, $141.3 million, and $145.9 million in fiscal 2025, 2024, and 2023, respectively. We contributed $11.9 million, $12.2 million, and $12.5 million to our pension plans in fiscal 2025, 2024, and 2023, respectively. We anticipate contributing approximately $11.0 million to our pension plans in fiscal 2026.

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One significant assumption for pension plan accounting is the discount rate. We use a spot-rate approach, discussed above. This approach focuses on measuring the service cost and interest cost components of net periodic benefit cost by using individual spot rates derived from a high-quality corporate bond yield curve and matched with separate cash flows for each future year instead of a single weighted-average discount rate approach.

Based on this information, the weighted-average discount rate selected by us for determination of the interest cost component of our pension expense was 5.51% for fiscal 2025, 5.41% for fiscal 2024, and 4.09% for fiscal 2023. The weighted-average discount rate selected by us for determination of the service cost component of our pension expense was 5.72% for fiscal 2025, 5.60% for fiscal 2024, and 4.74% for fiscal 2023. We selected a weighted-average discount rate of 6.17% and 5.41% for determination of service and interest expense, respectively, for fiscal 2026. A 50-basis point increase in our discount rate assumption as of the end of fiscal 2025 would increase our annual pension expense for our pension plans by $3.2 million. A 50-basis point decrease in our discount rate assumption as of the end of fiscal 2025 would decrease our annual pension expense for our pension plans by $3.6 million. For our year-end pension obligation determination, we selected discount rates of 5.91% and 5.58% for fiscal years 2025 and 2024, respectively.

Another significant assumption used to account for our pension plans is the expected long-term rate of return on plan assets. In developing the assumed long-term rate of return on plan assets for determining pension expense, we consider long-term historical returns (arithmetic average) of the plan’s investments, the asset allocation among types of investments, estimated long-term returns by investment type from external sources, and the current economic environment. Based on this information, we selected a weighted-average expected long-term rate of return on plan assets of 5.53% and 5.89% for determining our fiscal 2025 and 2026 pension expense, respectively. A 50-basis point increase/decrease in our expected long-term rate of return assumption as of the beginning of fiscal 2026 would decrease/increase annual pension expense for our pension plans by $9.4 million.

Business Combinations, Impairment of Long-Lived Assets (including property, plant and equipment), Identifiable Intangible Assets, and Goodwill—We use the acquisition method in accounting for acquired businesses. Under the acquisition method, our financial statements reflect the operations of an acquired business starting from the closing of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. As a result, in the case of significant acquisitions we normally obtain the assistance of a third-party valuation specialist in estimating fair values of tangible and intangible assets. The fair value estimates are based on available historical information and on expectations and assumptions about the future, considering the perspective of marketplace participants. While management believes those expectations and assumptions are reasonable, they are inherently uncertain. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.

We reduce the carrying amounts of long-lived assets to their fair values when their carrying amount is determined to not be recoverable. We generally compare undiscounted estimated future cash flows of an asset or asset group to the carrying values of the asset or asset group for property, plant and equipment. If the undiscounted estimated future cash flows exceed the carrying values of the asset or asset group, no impairment is recognized. If the undiscounted estimated future cash flows are less than the carrying values of the asset or asset group, we write-down the asset or assets to their estimated fair values. The estimates of fair value are generally in the form of appraisal, or by discounting estimated future cash flows of the asset or asset group.

Determining the useful lives of intangible assets also requires management judgment. Certain brand intangibles are expected to have indefinite lives based on their history and our plans to continue to support and build the acquired brands, while other acquired intangible assets (e.g., customer relationships) are expected to have determinable useful lives. Our estimates of the useful lives of definite-lived intangible assets are primarily based upon historical experience, the competitive and macroeconomic environment, and our operating plans. The costs of definite-lived intangibles are amortized to expense over their estimated life.

We reduce the carrying amounts of indefinite-lived intangible assets, and goodwill to their fair values when the fair value of such assets is determined to be less than their carrying amounts (i.e., assets are deemed to be impaired). Fair value is estimated using a “relief from royalty” methodology for our indefinite-lived intangible assets and is typically estimated using a discounted cash flow method for our goodwill, which requires us to estimate the future cash flows anticipated to be generated by the particular reporting unit being tested for impairment as well as to select a discount rate to measure the present value of the anticipated cash flows. In certain circumstances, we also utilize a guideline public company method which is based on market multiples and our estimated EBITDA that considers public companies that are comparable to our reporting units. When determining future cash flow estimates under the guideline public company method or discounted cash flow method, we consider historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or

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estimates for selected EBITDA multiples and future cash flows could produce different impairment amounts (or none at all) for goodwill and indefinite-lived intangible assets. For further information on our indefinite-lived intangible assets and goodwill, see Note 1, “Summary of Significant Accounting Policies”, to the Consolidated Financial Statements contained in this report.

As of May 25, 2025, we have goodwill of $10.50 billion, indefinite-lived intangibles of $1.80 billion and definite-lived intangibles of $620.6 million. Historically, we have experienced material impairments in brand intangibles and goodwill as a result of declining sales, reductions to our assumed royalty rates due to lower-than-expected profit margins, and other economic conditions such as increases to interest rates.

In fiscal 2025, 2024, and 2023, we recorded total indefinite-lived intangibles impairments of $72.1 million, $430.2 million, and $589.2 million, respectively, primarily related to brands acquired as part of the Pinnacle acquisition that were recorded at fair value in fiscal 2019. We continue to be susceptible to impairment charges in the future if our long-term sales forecasts, royalty rates, and other assumptions change as a result of lower than expected performance or other economic conditions. We will monitor these assumptions as management continues to achieve gross margin improvement and long-term sales growth. Discount rates, long-term growth rates, and royalty rates used to estimate the fair value of our domestic retail brands with 10% or less excess fair value over carrying amount as of the fiscal 2025 annual impairment test were as follows:





















































Discount Rate





Long-Term Growth Rate



Royalty Rate





Carrying Amount



































(in billions)



Minimum



Maximum



Minimum



Maximum

Minimum

Maximum

Brands (10% cushion)



$

1.1





8.25%





12.50%





0.0%





2.0%



1.0%



11.0%



Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based upon the facts and circumstances present at each annual impairment test date. Additionally, these assumptions are generally interdependent and do not change in isolation. However, as it is reasonably possible that changes in assumptions could occur, as a sensitivity measure, we have presented the estimated effects of isolated changes in discount rates, long-term growth rates, and royalty rates on the fair value of our reporting unit and brands with 10% or less excess fair value over carrying amount. These estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline.

If we had changed the assumptions used to estimate the fair value of our brands with 10% or less excess fair value over carrying amount as of the fiscal 2025 annual impairment test, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of certain brands (in millions):



















































Discount Rate



Long-Term Growth Rate



Royalty Rate











50-Basis-Point



25-Basis-Point



100-Basis-Point









Increase

Decrease

Increase

Decrease

Increase

Decrease

Brands (10% cushion)











(70.9)





81.1





28.4





(23.5)



253.5



(247.9)









RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, to provide more detailed income tax disclosure requirements. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the standard is for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are in the process of analyzing the impact of the ASU on our related disclosures. We will adopt this guidance in the fourth quarter of fiscal 2026, when it becomes effective.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, to provide disaggregated disclosures of specific expense categories underlying certain income statement expense line items on an annual and interim basis. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are in the process of analyzing the impact of the ASU on our related disclosures.