J M SMUCKER Co 10-Q for FY2026 Q3
J M SMUCKER Co (SJM)
10-Q
2026-02-26
For: 2026-01-31
View Original
Added on
April 04, 2026
About this 10-Q
J M SMUCKER Co filed this 10-Q on February 26, 2026, covering the quarter ended January 31, 2026 (FY2026 Q3).
Headline figures
Quarter ended January 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.34B
- up 7.0% from $2.19B a year earlier
- Net loss
- $724.2M
- compared with a net loss of $662.3M a year earlier
- Diluted EPS
- -$6.79
- compared with -$6.22 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________________
FORM 10-Q
___________________________________________________
| QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended: January 31, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 1-5111
___________________________________________________
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip code) | ||||||||||||||||
Registrant’s telephone number, including area code: | |||||||||||||||||
N/A | |||||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | |||||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | |||||||||||||||||
Title of each class | Trading symbol | Name of each exchange on which registered | |||||||||||||||
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ý | Accelerated filer | ☐ | |||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
The Company had 106,648,319 common shares outstanding on February 19, 2026.
TABLE OF CONTENTS
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1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (LOSS)
(Unaudited)
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| Dollars in millions, except per share data | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of products sold (A) | |||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||
| Selling, distribution, and administrative expenses | |||||||||||||||||||||||
| Amortization | |||||||||||||||||||||||
| Goodwill impairment charges | |||||||||||||||||||||||
| Other intangible assets impairment charges | |||||||||||||||||||||||
Other special project costs (A) | |||||||||||||||||||||||
| Loss (gain) on divestitures – net | |||||||||||||||||||||||
| Other operating expense (income) – net | ( | ( | ( | ( | |||||||||||||||||||
| Operating Income (Loss) | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense – net | ( | ( | ( | ( | |||||||||||||||||||
| Other debt gains (charges) – net | |||||||||||||||||||||||
Other income (expense) – net (A) | ( | ( | ( | ( | |||||||||||||||||||
| Income (Loss) Before Income Taxes | ( | ( | ( | ( | |||||||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||||||||
| Net Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Net Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net Income (Loss) – Assuming Dilution | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(A) Includes certain divestiture, acquisition, integration, and restructuring costs ( “special project costs”). For more information, see Note 4: Special Project Costs and Note 5: Reportable Segments.
See notes to unaudited condensed consolidated financial statements.
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| Dollars in millions | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
| Cash flow hedging derivative activity, net of tax | |||||||||||||||||||||||
| Pension and other postretirement benefit plans activity, net of tax | |||||||||||||||||||||||
| Available-for-sale securities activity, net of tax | ( | ( | ( | ||||||||||||||||||||
| Total Other Comprehensive Income (Loss) | |||||||||||||||||||||||
| Comprehensive Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
See notes to unaudited condensed consolidated financial statements.
2
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| Dollars in millions | January 31, 2026 | April 30, 2025 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Trade receivables – net | |||||||||||
| Inventories: | |||||||||||
| Finished products | |||||||||||
| Raw materials | |||||||||||
| Total Inventory | |||||||||||
| Other current assets | |||||||||||
| Total Current Assets | |||||||||||
| Property, Plant, and Equipment | |||||||||||
| Land and land improvements | |||||||||||
| Buildings and fixtures | |||||||||||
| Machinery and equipment | |||||||||||
| Construction in progress | |||||||||||
| Gross Property, Plant, and Equipment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Total Property, Plant, and Equipment | |||||||||||
| Other Noncurrent Assets | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets – net | |||||||||||
| Other noncurrent assets | |||||||||||
| Total Other Noncurrent Assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued trade marketing and merchandising | |||||||||||
| Short-term borrowings | |||||||||||
| Other current liabilities | |||||||||||
| Total Current Liabilities | |||||||||||
| Noncurrent Liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred income taxes | |||||||||||
| Noncurrent operating lease liabilities | |||||||||||
| Other noncurrent liabilities | |||||||||||
| Total Noncurrent Liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Shareholders’ Equity | |||||||||||
| Common shares | |||||||||||
| Additional capital | |||||||||||
| Retained income (accumulated deficit) | ( | ||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
| Total Shareholders’ Equity | |||||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | |||||||||
See notes to unaudited condensed consolidated financial statements.
3
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
| Nine Months Ended January 31, | |||||||||||
| Dollars in millions | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net income (loss) | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used for) operations: | |||||||||||
| Depreciation | |||||||||||
| Amortization | |||||||||||
| Goodwill impairment charges | |||||||||||
| Other intangible assets impairment charges | |||||||||||
| Pension settlement loss (gain) | |||||||||||
| Share-based compensation expense | |||||||||||
| Loss (gain) on divestitures – net | |||||||||||
| Deferred income tax expense (benefit) | ( | ( | |||||||||
| Other noncash adjustments – net | |||||||||||
| Changes in assets and liabilities, net of effect from acquisition and divestitures: | |||||||||||
| Trade receivables | ( | ||||||||||
| Inventories | ( | ||||||||||
| Other current assets | ( | ||||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued liabilities | ( | ( | |||||||||
| Income and other taxes | ( | ||||||||||
| Other – net | ( | ( | |||||||||
| Net Cash Provided by (Used for) Operating Activities | |||||||||||
| Investing Activities | |||||||||||
| Additions to property, plant, and equipment | ( | ( | |||||||||
| Proceeds from divestitures – net | |||||||||||
| Proceeds from disposal of property, plant, and equipment | |||||||||||
| Collateral received (pledged) for derivative cash margin accounts | ( | ||||||||||
| Other – net | |||||||||||
| Net Cash Provided by (Used for) Investing Activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Short-term borrowings (repayments) – net | ( | ( | |||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Quarterly dividends paid | ( | ( | |||||||||
| Purchase of treasury shares | ( | ( | |||||||||
| Other – net | ( | ( | |||||||||
| Net Cash Provided by (Used for) Financing Activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash | ( | ||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and Cash Equivalents at End of Period | $ | $ | |||||||||
( ) Denotes use of cash
See notes to unaudited condensed consolidated financial statements.
4
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY
(Unaudited)
| Nine Months Ended January 31, 2026 | |||||||||||||||||||||||||||||||||||
| Dollars in millions | Common Shares Outstanding | Common Shares | Additional Capital | Retained Income (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||||||||
| Balance at May 1, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at July 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at October 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
5
| Nine Months Ended January 31, 2025 | |||||||||||||||||||||||||||||||||||
| Dollars in millions | Common Shares Outstanding | Common Shares | Additional Capital | Retained Income | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||||||||
| Balance at May 1, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at July 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ||||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at October 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Stock plans | |||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at January 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
See notes to unaudited condensed consolidated financial statements.
6
THE J. M. SMUCKER COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, unless otherwise noted, except per share data)
Note 1: Basis of Presentation
The unaudited interim condensed consolidated financial statements of The J. M. Smucker Company (“Company,” “we,” “us,” or “our”) have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included.
Operating results for the nine months ended January 31, 2026, are not necessarily indicative of the results that may be expected for the year ending April 30 , 2026. For further information, reference is made to the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended April 30, 2025.
Note 2: Recently Issued Accounting Standards
Recently Adopted Accounting Standard: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures. ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. This ASU requires entities to provide significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), other segment expenses included in each reported measure of segment profitability, and disclosure of the title and position of the CODM. We adopted the interim disclosure requirements on a retrospective basis during the first quarter of 2026, which are presented in Note 5: Reportable Segments. The annual disclosure requirements were adopted during 2025. The adoption of this standard did not have a material impact on our consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted: In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 will modernize the accounting guidance for the costs to develop software for internal use by removing all references to software development project stages so that the guidance is neutral to different software development methods. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project and it is probable that the project will be completed and the software will be used for its intended purpose. It will be effective for our annual and interim periods beginning May 1, 2028, with the option to early adopt at any time prior to the effective date on either a prospective or retrospective basis. We do not anticipate any impact to our results of operations, financial position, or cash flows upon adoption and are currently evaluating the impacts of the standard on our disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 will provide investors with more decision-useful information about an entity’s expenses by improving disclosures on income statement expenses. The amendments in this ASU will require public business entities to disclose disaggregated information about specific categories underlying certain income statement expense line items. It will be effective for our annual period beginning May 1, 2027, and interim periods beginning May 1, 2028, with the option to early adopt at any time prior to the effective dates on either a prospective or retrospective basis. We do not anticipate any impact to our results of operations, financial position, or cash flows upon adoption and are currently evaluating the impacts of the standard on our disclosures.
7
Note 3: Divestitures
On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM Foods, LLC (“JTM”). The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $34.6 , inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 on this transaction, primarily during the third quarter of 2025.
On December 2, 2024, we sold the Voortman® business to Second Nature Brands (“Second Nature”). The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $291.4 , inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 on this transaction, primarily during the second quarter of 2025.
Note 4: Special Project Costs
Special project costs consist primarily of employee-related costs and other transition and termination costs related to certain divestiture, acquisition, integration, and restructuring activities. Employee-related costs include severance, retention bonuses, and relocation costs. Severance costs are generally recognized when deemed probable and reasonably estimable, retention bonuses are recognized over the estimated future service period of the impacted employees, and relocation costs are expensed as incurred. Other transition and termination costs include fixed asset-related charges, contract and lease termination costs, professional fees, and other miscellaneous expenditures associated with divestiture, acquisition, integration, and restructuring activities. With the exception of accelerated depreciation, these costs are expensed as incurred. These special project costs are reported in cost of products sold, other special project costs, and other income (expense) – net in the Condensed Statements of Consolidated Income (Loss) and are not allocated to segment profit. The obligation related to employee separation costs is included in other current liabilities in the Condensed Consolidated Balance Sheets.
Divestiture Costs: Total divestiture costs incurred to date related to the Sahale Snacks® and Canada condiment businesses that were divested in 2024 were $6.4 , which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges. We did not 1.3 and $1.7 during the three and nine months ended January 31, 2025, respectively, primarily consisting of employee-related costs. We do not anticipate any additional costs to be incurred related to these divestiture activities. The obligation related to severance and retention bonuses was fully satisfied as of April 30, 2025.
As a result of our recent divestitures, we identified opportunities to address certain distribution inefficiencies. We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026. We have recognized total cumulative costs of $8.9 , of which $0.5 and $2.4 were recognized during the three and nine months ended January 31, 2026, respectively, and $2.1 and $3.0 during the three and nine months ended January 31, 2025, respectively, primarily consisting of other transition and termination costs.
Integration Costs: On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, Inc. (“Hostess Brands”), a manufacturer and marketer of sweet baked goods brands. Total integration costs related to the acquisition are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges.
The following table summarizes our integration costs incurred related to the acquisition of Hostess Brands.
| Three Months Ended January 31, | Nine Months Ended January 31, | Total Costs Incurred to Date at January 31, 2026 | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Transaction costs | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| Employee-related costs | |||||||||||||||||||||||||||||||||||||||||
| Other transition and termination costs | |||||||||||||||||||||||||||||||||||||||||
| Total integration costs | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
8
Cumulative noncash charges incurred through January 31, 2026, were $16.1 and primarily consisted of accelerated depreciation. We incurred noncash charges of $0.2 and $0.7 during the three and nine months ended January 31, 2026, and incurred $1.7 and $13.2 during the three and nine months ended January 31, 2025, respectively. Transaction costs primarily reflect equity compensation payouts, legal fees, and fees related to a 364-day senior unsecured Bridge Term Loan Credit Facility that provided committed financing for the acquisition of Hostess Brands. Other transition and termination costs primarily consist of contract termination charges, accelerated depreciation, and consulting fees. We anticipate the remaining integration costs will be incurred by the end of 2026 and are expected to be split between employee-related and other transition and termination costs. The obligation related to severance and retention bonuses was $1.1 and $6.2 at January 31, 2026, and April 30, 2025, respectively.
Restructuring Costs: During the first quarter of 2026, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess® branded products, and consolidated operations into other existing facilities during the third quarter of 2026 to further optimize operations within our Sweet Baked Snacks segment.
The following table summarizes our restructuring costs incurred related to the restructuring program.
| Three Months Ended January 31, | Nine Months Ended January 31, | Total Costs Incurred to Date at January 31, 2026 | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | ||||||||||||||||||||||||||||||||||||||||
| Employee-related costs | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Other transition and termination costs | |||||||||||||||||||||||||||||||||||||||||
| Total restructuring costs | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Noncash charges were included in other transition and termination costs and consisted of accelerated depreciation. We incurred noncash charges of $23.7 and $62.6 during the three and nine months ended January 31, 2026, respectively. We anticipate any remaining charges to be minimal. The obligation related to severance and retention bonuses was $1.1 at January 31, 2026.
Note 5: Reportable Segments
We operate in one industry: the manufacturing and marketing of food and beverage products. We have four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks. The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable. Subsequent to the third quarter of 2026, we announced several senior leadership updates in support of continued advancement of our long-term growth strategy and enhancement of our profitability and earnings. As a result, we are evaluating the impact of these changes to the way in which we present our reportable segments during the fourth quarter of 2026.
The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers®, Dunkin’®, and Café Bustelo® branded coffee; the U.S. Retail Frozen Handheld and Spreads segment primarily includes the domestic sales of Uncrustables®, Jif®, and Smucker’s® branded products; the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix®, Milk-Bone®, Pup-Peroni®, and Canine Carry Outs® branded products; and the Sweet Baked Snacks segment primarily includes all domestic and foreign sales of Hostess branded products in all channels. With the exception of Sweet Baked Snacks products, International and Away From Home includes the sale of all products that are distributed in foreign countries through retail channels, as well as domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).
Reportable segments have been identified based on financial data utilized to manage our businesses by our CODMs. The CODMs use net sales and segment profit to evaluate segment performance and allocate resources, including consideration of plan-to-actual variances and prior year-to-actual variances on a monthly basis. Segment profit represents net sales, less direct and allocable operating expenses, and is consistent with the way in which the CODMs manage our segments. However, we do not represent that the segments, if operated independently, would report operating profit equal to the segment profit set forth below, as segment profit excludes certain expenses such as amortization expense and impairment charges related to intangible assets, gains and losses on divestitures, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), special project costs, as well as corporate administrative expenses.
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Commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold. At that time, we reclassify the hedge gains and losses from unallocated derivative gains and losses to segment profit, allowing our segments to realize the economic effect of the hedge without experiencing any mark-to-market volatility. We would expect that any gain or loss in the estimated fair value of the derivatives would generally be offset by a change in the estimated fair value of the underlying exposures.
The following tables reconcile segment profit to income before income taxes.
| Three Months Ended January 31, 2026 | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | U.S. Retail Frozen Handheld and Spreads | U.S. Retail Pet Foods | Sweet Baked Snacks | International and Away From Home | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Segment cost of products sold (A) | |||||||||||||||||||||||||||||||||||
Segment selling and distribution expenses (B) | |||||||||||||||||||||||||||||||||||
Other segment items (C) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reconciliation of segment profit: | |||||||||||||||||||||||||||||||||||
| Amortization | ( | ||||||||||||||||||||||||||||||||||
| Goodwill impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Other intangible assets impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Interest expense – net | ( | ||||||||||||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | |||||||||||||||||||||||||||||||||||
Cost of products sold – special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
| Corporate administrative expenses | ( | ||||||||||||||||||||||||||||||||||
Other income (expense) – net (D) | ( | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | ( | |||||||||||||||||||||||||||||||||
| Nine Months Ended January 31, 2026 | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | U.S. Retail Frozen Handheld and Spreads | U.S. Retail Pet Foods | Sweet Baked Snacks | International and Away From Home | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Segment cost of products sold (A) | |||||||||||||||||||||||||||||||||||
Segment selling and distribution expenses (B) | |||||||||||||||||||||||||||||||||||
Other segment items (C) | ( | ( | |||||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reconciliation of segment profit: | |||||||||||||||||||||||||||||||||||
| Amortization | ( | ||||||||||||||||||||||||||||||||||
| Goodwill impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Other intangible assets impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Interest expense – net | ( | ||||||||||||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | ( | ||||||||||||||||||||||||||||||||||
Cost of products sold – special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
| Corporate administrative expenses | ( | ||||||||||||||||||||||||||||||||||
Other income (expense) – net (D) | ( | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | ( | |||||||||||||||||||||||||||||||||
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| Three Months Ended January 31, 2025 | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | U.S. Retail Frozen Handheld and Spreads | U.S. Retail Pet Foods | Sweet Baked Snacks | International and Away From Home | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Segment cost of products sold (A) | |||||||||||||||||||||||||||||||||||
Segment selling and distribution expenses (B) | |||||||||||||||||||||||||||||||||||
Other segment items (C) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reconciliation of segment profit: | |||||||||||||||||||||||||||||||||||
| Amortization | ( | ||||||||||||||||||||||||||||||||||
| Goodwill impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Other intangible assets impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Gain (loss) on divestitures – net | ( | ||||||||||||||||||||||||||||||||||
| Interest expense – net | ( | ||||||||||||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | |||||||||||||||||||||||||||||||||||
Cost of products sold – special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other debt gains (charges) – net (E) | |||||||||||||||||||||||||||||||||||
| Corporate administrative expenses | ( | ||||||||||||||||||||||||||||||||||
| Other income (expense) – net | ( | ||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | ( | |||||||||||||||||||||||||||||||||
| Nine Months Ended January 31, 2025 | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | U.S. Retail Frozen Handheld and Spreads | U.S. Retail Pet Foods | Sweet Baked Snacks | International and Away From Home | Total | ||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Segment cost of products sold (A) | |||||||||||||||||||||||||||||||||||
Segment selling and distribution expenses (B) | |||||||||||||||||||||||||||||||||||
Other segment items (C) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Segment profit | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reconciliation of segment profit: | |||||||||||||||||||||||||||||||||||
| Amortization | ( | ||||||||||||||||||||||||||||||||||
| Goodwill impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Other intangible assets impairment charges | ( | ||||||||||||||||||||||||||||||||||
| Gain (loss) on divestitures – net | ( | ||||||||||||||||||||||||||||||||||
| Interest expense – net | ( | ||||||||||||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | |||||||||||||||||||||||||||||||||||
Cost of products sold – special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other special project costs (D) | ( | ||||||||||||||||||||||||||||||||||
Other debt gains (charges) – net (E) | |||||||||||||||||||||||||||||||||||
| Corporate administrative expenses | ( | ||||||||||||||||||||||||||||||||||
| Other income (expense) – net | ( | ||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | ( | |||||||||||||||||||||||||||||||||
(A) Segment cost of products sold excludes special project costs related to certain divestiture, acquisition, integration, and restructuring activities and the change in net cumulative unallocated derivative gains and losses. For more information, see Note 4: Special Project Costs and Note 10: Derivative Financial Instruments.
(B) Segment selling and distribution expenses excludes corporate administrative expenses and special project costs that are not allocated to the segments.
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(C) Other segment items primarily reflects the loss (gain) on disposal of assets, plant administrative expenses, equity method investment income, and royalty income. Further, favorable property taxes are included in the U.S. Retail Coffee segment for the three and nine months ended January 31, 2025.
(D) Includes special project costs related to certain divestiture, acquisition, integration, and restructuring activities. For more information, see Note 4: Special Project Costs.
(E) Includes a net gain on extinguishment of debt as a result of tender offers completed during the third quarter of 2025. For more information, see Note 8: Debt and Financing Arrangements.
The following tables present total assets; total depreciation, amortization, and impairment charges; and total additions to property, plant, and equipment by segment.
| January 31, 2026 | April 30, 2025 | ||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| U.S. Retail Coffee | $ | $ | |||||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | |||||||||||||||||||||||
| U.S. Retail Pet Foods | |||||||||||||||||||||||
| Sweet Baked Snacks | |||||||||||||||||||||||
| International and Away From Home | |||||||||||||||||||||||
Unallocated (A) | |||||||||||||||||||||||
| Total assets | $ | $ | |||||||||||||||||||||
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Depreciation, amortization, and impairment charges: | |||||||||||||||||||||||
| U.S. Retail Coffee | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | |||||||||||||||||||||||
| U.S. Retail Pet Foods | |||||||||||||||||||||||
| Sweet Baked Snacks | |||||||||||||||||||||||
| International and Away From Home | |||||||||||||||||||||||
Unallocated (B) | |||||||||||||||||||||||
| Total depreciation, amortization, and impairment charges | $ | $ | $ | $ | |||||||||||||||||||
| Additions to property, plant, and equipment: | |||||||||||||||||||||||
| U.S. Retail Coffee | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | |||||||||||||||||||||||
| U.S. Retail Pet Foods | |||||||||||||||||||||||
| Sweet Baked Snacks | |||||||||||||||||||||||
| International and Away From Home | |||||||||||||||||||||||
| Total additions to property, plant, and equipment | $ | $ | $ | $ | |||||||||||||||||||
(A)Primarily represents unallocated cash and cash equivalents and corporate-held investments.
(B)Primarily represents unallocated accelerated depreciation related to restructuring activities and corporate administrative expenses, mainly consisting of depreciation and software amortization.
The following table presents certain geographical information.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| International: | |||||||||||||||||||||||
| Canada | $ | $ | $ | $ | |||||||||||||||||||
| All other international | |||||||||||||||||||||||
| Total international | $ | $ | $ | $ | |||||||||||||||||||
| Total net sales | $ | $ | $ | $ | |||||||||||||||||||
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The following table presents product category information.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | Primary Reportable Segment (A) | |||||||||||||||||||||||||
| Coffee | $ | $ | $ | $ | U.S. Retail Coffee | ||||||||||||||||||||||||
| Frozen handheld | U.S. Retail Frozen Handheld and Spreads | ||||||||||||||||||||||||||||
| Sweet baked goods | Sweet Baked Snacks | ||||||||||||||||||||||||||||
| Pet snacks | U.S. Retail Pet Foods | ||||||||||||||||||||||||||||
| Peanut butter | U.S. Retail Frozen Handheld and Spreads | ||||||||||||||||||||||||||||
| Cat food | U.S. Retail Pet Foods | ||||||||||||||||||||||||||||
| Fruit spreads | U.S. Retail Frozen Handheld and Spreads | ||||||||||||||||||||||||||||
| Portion control | Other (B) | ||||||||||||||||||||||||||||
| Toppings and syrups | U.S. Retail Frozen Handheld and Spreads | ||||||||||||||||||||||||||||
| Baking mixes and ingredients | Other (B) | ||||||||||||||||||||||||||||
| Cookies | Sweet Baked Snacks | ||||||||||||||||||||||||||||
| Other | Other (B) | ||||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | |||||||||||||||||||||||||
(A)The primary reportable segment generally represents at least 75
(B)Represents the combined International and Away From Home operating segments.
Note 6: Earnings per Share
We computed net income (loss) per common share (“basic earnings per share”) under the two-class method for the three and nine months ended January 31, 2026 and 2025, due to certain unvested common shares that contained non-forfeitable rights to dividends (i.e., participating securities) during these periods. Further, we computed net income (loss) per common share – assuming dilution (“diluted earnings per share”) under the two-class and treasury stock methods to determine the method that was most dilutive, in accordance with FASB Accounting Standards Codification 260, Earnings Per Share. For the three and nine months ended January 31, 2026 and 2025, we recognized a net loss and as a result, excluded the anti-dilutive effect of stock-based awards from the computation of diluted earnings per share.
The following table sets forth the computation of basic and diluted earnings per share under the two-class method.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Less: Net income (loss) allocated to participating securities | |||||||||||||||||||||||
| Net income (loss) allocated to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||
| Add: Dilutive effect of stock options | |||||||||||||||||||||||
| Weighted-average common shares outstanding – assuming dilution | |||||||||||||||||||||||
| Net income (loss) per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net income (loss) per common share – assuming dilution | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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The following table sets forth the computation of diluted earnings per share under the treasury stock method.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average common shares outstanding – assuming dilution: | |||||||||||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||
| Add: Dilutive effect of stock options | |||||||||||||||||||||||
| Add: Dilutive effect of restricted shares, restricted stock units, and performance units | |||||||||||||||||||||||
| Weighted-average common shares outstanding – assuming dilution | |||||||||||||||||||||||
| Net income (loss) per common share – assuming dilution | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Note 7: Goodwill and Other Intangible Assets
The following table summarizes the changes in our goodwill.
| U.S. Retail Coffee | U.S. Retail Frozen Handheld and Spreads | U.S. Retail Pet Foods | Sweet Baked Snacks | International and Away From Home | Total | ||||||||||||||||||||||||||||||
| Balance at April 30, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Impairment charge (A) | ( | ( | |||||||||||||||||||||||||||||||||
Other (B) | |||||||||||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(A)We have recognized accumulated goodwill impairment charges of $2,412.0 as of January 31, 2026.
(B)The amount classified as other in International and Away From Home represents foreign currency translation adjustments.
The following table summarizes our other intangible assets and related accumulated amortization and impairment charges including foreign currency exchange adjustments.
| January 31, 2026 | April 30, 2025 | ||||||||||||||||||||||||||||||||||
| Acquisition Cost | Accumulated Amortization/Impairment Charges/Foreign Currency Exchange | Net | Acquisition Cost | Accumulated Amortization/Impairment Charges/Foreign Currency Exchange | Net | ||||||||||||||||||||||||||||||
| Finite-lived intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||
| Customer and contractual relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Patents and technology | |||||||||||||||||||||||||||||||||||
| Trademarks | |||||||||||||||||||||||||||||||||||
| Total intangible assets subject to amortization | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Indefinite-lived intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||
| Trademarks | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total other intangible assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
We review goodwill and other indefinite-lived intangible assets for impairment at least annually on February 1, and more often if indicators of impairment exist.
During the third quarter of 2026, both net sales and segment profit continued to underperform as compared to plan for the Sweet Baked Snacks segment, reflecting sustained challenges in the sweet baked goods category, ongoing executional and operating challenges, and the impact of a dynamic macroeconomic environment, inclusive of continued pressures on consumer discretionary spending and an evolving regulatory environment. Furthermore, we also completed our long-range planning process during the third quarter of 2026, which resulted in a decrease in projected net sales and segment profit for the Sweet
14
Baked Snacks segment, as compared to the projected financial information used in the previous impairment test during the fourth quarter of 2025. The declines are reflective of both near-term underperformance and long-term expectations for both net sales and segment profit, driven by the sustained reduction in consumer discretionary income due to inflationary pressures and an overall shift in consumer sentiment related to sweet baked goods, contributing to a slower than anticipated recovery in the sweet baked goods category. In addition, the overall reduction in net sales and segment profit, in conjunction with the sustained underperformance of the sweet baked goods category, led to a further reduction of the projected long-term growth rate and royalty rate for the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively.
As a result of these declines and the narrow differences between estimated fair values and carrying values as of April 30, 2025, we performed an interim impairment analysis on the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark. We recognized total pre-tax impairment charges of $961.7 during the third quarter of 2026, of which $507.5 and $454.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively. The goodwill impairment charge represents the full remaining carrying value of the goodwill within the Sweet Baked Snacks reporting unit and the indefinite-lived trademark impairment charge represents the excess of the carrying value over the estimated fair value. These charges were included as noncash charges in our Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows. As a result of the goodwill impairment charge, we completed an impairment review of the remaining long-lived assets within the Sweet Baked Snacks reporting unit and did not recognize any additional impairment charges. Furthermore, we reassessed the long-term strategic expectations for the Hostess brand, inclusive of the impact of recent category trends, resulting in the reprioritization of our investments in growth brands outside of the reporting unit and the brand being reclassified as a finite-lived intangible asset as of January 31, 2026. The reclassification will result in annual amortization expense of $38.8 . There were no other indicators of impairment during the third quarter of 2026, and as a result, we do not believe that any of our remaining reporting units or material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2026.
During the third quarter of 2025, we recognized total pre-tax impairment charges of $1.0 billion, of which $794.3 and $208.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively, due to a decline in both actual and forecasted net sales, reflecting underperformance of the business, increased inflationary pressures, and diminished consumer discretionary income. These charges were included as noncash charges in our Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows.
Note 8: Debt and Financing Arrangements
The following table summarizes the components of our long-term debt.
| January 31, 2026 | April 30, 2025 | ||||||||||||||||||||||
| Principal Outstanding | Carrying Amount (A) | Principal Outstanding | Carrying Amount (A) | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Term Loan Credit Agreement due March 5, 2027 | |||||||||||||||||||||||
| Total long-term debt | $ | $ | $ | $ | |||||||||||||||||||
(A) Represents the carrying amount included in the Condensed Consolidated Balance Sheets, which includes the impact of capitalized debt issuance costs, offering discounts, and terminated interest rate contracts.
15
In March 2025, we entered into a $650.0 senior unsecured delayed-draw Term Loan Credit Agreement (“Term Loan”). Borrowings under the Term Loan bear interest on the prevailing Secured Overnight Financing Rate (“SOFR”) and are payable at the end of the borrowing term. The Term Loan matures on March 5, 2027, and does not require scheduled amortization payments. Voluntary prepayments are permitted without premium or penalty. On March 14, 2025, the full amount was drawn on the Term Loan to partially finance the repayment of $1.0 billion in principal of our 3.50 % Senior Notes due March 15, 2025. During the three months ended January 31, 2026, we prepaid $200.0 . As of January 31, 2026, the interest rate on the Term Loan was 4.77 percent. Subsequent to the quarter, we prepaid an additional $100.0 on the Term Loan.
In December 2024, we commenced cash tender offers to purchase up to $300.0 aggregate purchase price, not including accrued and unpaid interest, of certain outstanding Senior Notes. As a result, an aggregate principal amount of $122.5 138.8 194.1 of our 2.125% Senior Notes due 2032 were tendered, of which $135.5 was accepted. We recorded a net gain on the extinguishment of debt of $30.3 during the three and nine months ended January 31, 2025, included within other debt gains (charges) – net on the Condensed Statement of Consolidated Income. Components of the net gain include debt carrying value write-off of $335.9 (inclusive of terminated interest rate contract, debt issuance costs, and discounts), net of the reacquisition price of $300.0 , debt tender fees of $1.1 , and a loss on the associated reverse treasury locks of $4.5 . For additional information, see Note 10: Derivative Financial Instruments.
We have available a $2.0 billion unsecured revolving credit facility with a group of ten banks that matures in March 2030. Borrowings under the revolving credit facility bear interest on the prevailing U.S. Prime Rate, SOFR, Euro Interbank Offered Rate, or Canadian Overnight Repo Rate Average, based on our election. Interest is payable either on a quarterly basis or at the end of the borrowing term. We did not
We participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of January 31, 2026, and April 30, 2025, we had $487.0 and $641.0 of short-term borrowings outstanding, respectively, which were issued under our commercial paper program at weighted-average interest rates of 3.85 and 4.73 percent, respectively.
Interest paid totaled $133.5 and $126.9 for the three months ended January 31, 2026 and 2025, respectively, and $332.2 and $341.8 for the nine months ended January 31, 2026 and 2025, respectively. This differs from interest expense due to the timing of interest payments, capitalized interest, the effect of interest rate contracts, amortization of debt issuance costs and discounts, and the payment of other debt fees.
Our debt instruments contain covenant restrictions, including an interest coverage ratio. As of January 31, 2026, we are in compliance with all covenants.
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Note 9: Pensions and Other Postretirement Benefits
The following table summarizes our net periodic benefit cost for defined benefit pension and other postretirement benefit plans.
| Three Months Ended January 31, | |||||||||||||||||||||||
| Defined Benefit Pension Plans | Other Postretirement Benefits | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||
| Amortization of net actuarial loss (gain) | ( | ( | |||||||||||||||||||||
| Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
| Settlement loss (gain) | |||||||||||||||||||||||
| Net periodic benefit cost | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended January 31, | |||||||||||||||||||||||
| Defined Benefit Pension Plans | Other Postretirement Benefits | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||
| Amortization of net actuarial loss (gain) | ( | ( | |||||||||||||||||||||
| Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
| Settlement loss (gain) | |||||||||||||||||||||||
| Net periodic benefit cost | $ | $ | $ | $ | |||||||||||||||||||
In October 2023, we approved an amendment to terminate one of our U.S. qualified defined benefit plans, effective as of December 31, 2023. We provided notice to participants of the intent to terminate the plan and applied for a determination letter from the Internal Revenue Service. Pension obligations will be distributed through a combination of lump sum payments to eligible plan participants and through the purchase of a group annuity contract. During the plan year ended December 31, 2023, the asset allocation for the plan’s assets was adjusted in anticipation of the plan termination. Upon settlement of the pension obligations, we will reclassify unrecognized actuarial gains or losses, currently recorded in accumulated other comprehensive income (loss), to the Statement of Consolidated Income (Loss) as a settlement gain or charge. As of January 31, 2026, we had unrecognized losses related to the plan of $35.9 . We anticipate the termination process will be substantially complete by the end of 2026. As a result of significant lump sum payments during the third quarter of 2026, we recognized a noncash pre-tax settlement charge of $7.8
We made contributions of $0.7 and $1.0 to our U.S. qualified defined benefit pension plans for the nine months ended January 31, 2026 and 2025, respectively and direct benefit payments of $2.7
Note 10: Derivative Financial Instruments
We are exposed to market risks, such as changes in commodity prices, foreign currency exchange rates, and interest rates. To manage the volatility related to these exposures, we enter into various derivative transactions. We have policies in place that define acceptable instrument types we may enter into and establish controls to limit our market risk exposure. By policy, we do not enter into derivative transactions for speculative purposes.
Commodity Derivatives: We enter into commodity derivatives to manage the price volatility and reduce the variability of future cash flows related to anticipated inventory purchases of key raw materials, notably green coffee, wheat, soybean meal, corn, and edible oils. We also enter into commodity derivatives to manage price risk for energy input costs, including diesel fuel and natural gas. Our derivative instruments generally have maturities of less than one year .
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We do not qualify commodity derivatives for hedge accounting treatment, and as a result, the derivative gains and losses are immediately recognized in earnings. Although we do not perform the assessments required to achieve hedge accounting for derivative positions, we believe all of our commodity derivatives are economic hedges of our risk exposure.
The commodities hedged have a high inverse correlation to price changes of the derivative instrument. Thus, we would expect that over time any gain or loss in the estimated fair value of its derivatives would generally be offset by an increase or decrease in the estimated fair value of the underlying exposures.
Foreign Currency Exchange Derivatives: We utilize foreign currency derivatives to manage the effect of foreign currency exchange fluctuations on future cash payments primarily related to purchases of certain raw materials and finished goods. The contracts generally have maturities of less than one year . We do not qualify instruments used to manage foreign currency exchange exposures for hedge accounting treatment and believe all of our foreign currency derivatives are economic hedges of our risk exposure.
Interest Rate Derivatives: From time to time, we utilize derivative instruments to manage interest rate risk associated with anticipated debt transactions, as well as to manage changes in the fair value of our long-term debt. At the inception of an interest rate contract, the instrument is evaluated and documented for qualifying hedge accounting treatment. If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss) and generally reclassified to interest expense in the period during which the hedged transaction affects earnings. If the contract is designated as a fair value hedge, the contract is recognized at fair value on the balance sheet, and changes in the fair value are recognized in interest expense. Generally, changes in the fair value of the contract are equal to changes in the fair value of the underlying debt and have no net impact on earnings.
In November 2024, we entered into reverse treasury locks to manage our exposure to interest rate fluctuations related to the tender offers. In December 2024, concurrent with the pricing of the tender offers, we settled the reverse treasury locks and realized a net loss of $4.5 during the three months ended January 31, 2025, recognized in earnings within other debt gains (charges) – net on the Condensed Statement of Consolidated Income, netting with the gain on extinguishment associated with the tender offers. For additional information, see Note 8: Debt and Financing Arrangements.
The following table presents the gross notional value of outstanding derivative contracts.
| January 31, 2026 | April 30, 2025 | ||||||||||
| Commodity contracts | $ | $ | |||||||||
| Foreign currency exchange contracts | |||||||||||
The following tables set forth the gross fair value amounts of derivative instruments recognized in the Condensed Consolidated Balance Sheets.
| January 31, 2026 | |||||||||||||||||||||||
| Other Current Assets | Other Current Liabilities | Other Noncurrent Assets | Other Noncurrent Liabilities | ||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Commodity contracts | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency exchange contracts | |||||||||||||||||||||||
| Total derivative instruments | $ | $ | $ | $ | |||||||||||||||||||
| April 30, 2025 | |||||||||||||||||||||||
| Other Current Assets | Other Current Liabilities | Other Noncurrent Assets | Other Noncurrent Liabilities | ||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Commodity contracts | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency exchange contracts | |||||||||||||||||||||||
| Total derivative instruments | $ | $ | $ | $ | |||||||||||||||||||
We have elected to not offset fair value amounts recognized for our exchange-traded derivative instruments and our cash margin accounts executed with the same counterparty that are generally subject to enforceable netting agreements. We are required to maintain cash margin accounts in connection with funding the settlement of our open positions. Our cash margin
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accounts represented collateral pledged of $2.7 and $37.5 at January 31, 2026, and April 30, 2025, respectively, and are included in other current assets in the Condensed Consolidated Balance Sheets. The change in the cash margin accounts is included within investing activities in the Condensed Statements of Consolidated Cash Flows. In the event of default and immediate net settlement of all of our open positions with individual counterparties, all of our derivative liabilities would be fully offset by either our derivative asset positions or margin accounts based on the net asset or liability position with our individual counterparties. Cash flows associated with the settlement of derivative instruments are classified in the same line item as the cash flows of the related hedged item, which is within operating activities in the Condensed Statements of Consolidated Cash Flows.
Economic Hedges
The following table presents the net gains and losses recognized in cost of products sold in the Condensed Statements of Consolidated Income (Loss) on derivatives not designated as hedging instruments.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Derivative gains (losses) on commodity contracts | $ | $ | $ | ( | $ | ||||||||||||||||||
| Derivative gains (losses) on foreign currency exchange contracts | ( | ( | |||||||||||||||||||||
| Total derivative gains (losses) recognized in cost of products sold | $ | $ | $ | ( | $ | ||||||||||||||||||
Commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold. At that time, we reclassify the hedge gains and losses from unallocated derivative gains and losses to segment profit, allowing our segments to realize the economic effect of the hedge without experiencing any mark-to-market volatility.
The following table presents the net change in cumulative unallocated derivative gains and losses.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net derivative gains (losses) recognized and classified as unallocated | $ | $ | $ | ( | $ | ||||||||||||||||||
| Less: Net derivative gains (losses) reclassified to segment operating profit | ( | ( | |||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | $ | $ | $ | ( | $ | ||||||||||||||||||
As of January 31, 2026, the net cumulative unallocated derivative losses were $10.0 , and at April 30, 2025, the net cumulative unallocated derivative gains were $80.8 .
Cash Flow Hedges
The following table presents information on the pre-tax gains and losses recognized on all contracts previously designated as cash flow hedges.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Gains (losses) recognized in other comprehensive income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Less: Gains (losses) reclassified from accumulated other comprehensive income (loss) to interest expense – net (A) | ( | ( | ( | ( | |||||||||||||||||||
Less: Gains (losses) reclassified from accumulated other comprehensive income (loss) to other debt gains (charges) – net (B) | ( | ( | |||||||||||||||||||||
| Change in accumulated other comprehensive income (loss) | $ | $ | $ | $ | |||||||||||||||||||
(A)Interest expense – net, as presented in the Condensed Statements of Consolidated Income (Loss) was $94.5 and $95.4 for the three months ended January 31, 2026 and 2025, respectively and, $293.3 and $294.5 for the nine months ended January 31, 2026 and 2025. The reclassification includes terminated contracts which were designated as cash flow hedges.
(B)Other debt gains (charges) – net, as presented in the Condensed Statement of Consolidated Income was $30.3 for the three and nine months ended January 31, 2025. The reclassification is related to the debt extinguishment due to the tender offers, as discussed in Note 8: Debt and Financing Arrangements.
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Included as a component of accumulated other comprehensive income (loss) at January 31, 2026 and April 30, 2025, were deferred net pre-tax losses of $108.0 and $117.4 , respectively, related to the terminated interest rate contracts associated with the Senior Notes due March 15, 2030 and March 15, 2050, which were terminated in 2020. The related net tax benefit recognized in accumulated other comprehensive income (loss) at January 31, 2026 and April 30, 2025, was $25.1 and $27.3 , respectively. Approximately $12.5 of the net pre-tax loss will be recognized over the next 12 months related to the terminated interest rate contracts.
Note 11: Other Financial Instruments and Fair Value Measurements
Financial instruments, other than derivatives, that potentially subject us to significant concentrations of credit risk consist principally of cash investments, short-term borrowings, and trade receivables. The carrying value of these financial instruments approximates fair value. Our remaining financial instruments, with the exception of long-term debt, are recognized at estimated fair value in the Condensed Consolidated Balance Sheets.
The following table provides information on the carrying amounts and fair values of our financial instruments.
| January 31, 2026 | April 30, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
| Marketable securities and other investments | $ | $ | $ | $ | |||||||||||||||||||
| Derivative financial instruments – net | |||||||||||||||||||||||
| Total long-term debt | ( | ( | ( | ( | |||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions.
The following tables summarize the fair values and the levels within the fair value hierarchy in which the fair value measurements fall for our financial instruments.
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at January 31, 2026 | ||||||||||||||||||||
Marketable securities and other investments: (A) | |||||||||||||||||||||||
| Equity mutual funds | $ | $ | $ | $ | |||||||||||||||||||
| Municipal obligations | |||||||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
Derivative financial instruments: (B) | |||||||||||||||||||||||
| Commodity contracts – net | ( | ||||||||||||||||||||||
| Foreign currency exchange contracts – net | ( | ( | |||||||||||||||||||||
Total long-term debt (C) | ( | ( | ( | ||||||||||||||||||||
| Total financial instruments measured at fair value | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
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| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at April 30, 2025 | ||||||||||||||||||||
Marketable securities and other investments: (A) | |||||||||||||||||||||||
| Equity mutual funds | $ | $ | $ | $ | |||||||||||||||||||
| Municipal obligations | |||||||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
Derivative financial instruments: (B) | |||||||||||||||||||||||
| Commodity contracts – net | |||||||||||||||||||||||
| Foreign currency exchange contracts – net | ( | ( | |||||||||||||||||||||
Total long-term debt (C) | ( | ( | ( | ||||||||||||||||||||
| Total financial instruments measured at fair value | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
(A)Marketable securities and other investments consist of funds maintained for the payment of benefits associated with nonqualified retirement plans. The funds include equity securities listed in active markets, municipal obligations valued by a third-party using valuation techniques that utilize inputs that are derived principally from or corroborated by observable market data, and money market funds with maturities of three months or less. Based on the short-term nature of these money market funds, carrying value approximates fair value. As of January 31, 2026, our municipal obligations are scheduled to mature as follows: $0.1 in 2026, $3.9 in 2027, $0.4 in 2028, $2.0 in 2029, $0.6 in 2030, and the remaining $7.1 in 2031 and beyond.
(B)Level 1 commodity and foreign currency exchange derivatives are valued using quoted market prices for identical instruments in active markets. Level 2 commodity and foreign currency exchange derivatives are valued using quoted prices for similar assets or liabilities in active markets. For additional information, see Note 10: Derivative Financial Instruments.
(C)Long-term debt is composed of public Senior Notes classified as Level 1 and the Term Loan classified as Level 2. The public Senior Notes are traded in an active secondary market and valued using quoted prices. The fair value of the Term Loan is based on the net present value of each interest and principal payment calculated utilizing an interest rate derived from an estimated yield curve obtained from independent pricing sources for similar types of term loan borrowing arrangements. For additional information, see Note 8: Debt and Financing Arrangements.
During the third quarter of 2026, we recognized nonrecurring fair value adjustments of $961.7 , of which $507.5 and $454.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively. These adjustments were included as noncash charges in our Condensed Statement of Consolidated Income. We utilized Level 3 inputs based on management’s best estimates and assumptions to estimate the fair values of the reporting unit and the indefinite-lived trademark. For additional information, see Note 7: Goodwill and Other Intangible Assets.
Note 12: Leases
We lease certain warehouses, manufacturing facilities, office space, equipment, and vehicles, primarily through operating lease agreements. We have elected to not recognize leases with a term of 12 months or less in the Condensed Consolidated Balance Sheets. Instead, we recognize the related lease expense on a straight-line basis over the lease term.
Although the majority of our right-of-use asset and lease liability balances consist of leases with renewal options, these optional periods do not typically impact the lease term as we are not reasonably certain to exercise them. Certain leases also include termination provisions or options to purchase the leased property. Since we are not reasonably certain to exercise these types of options, minimum lease payments do not include any amounts related to these termination or purchase options. Our lease agreements generally do not contain residual value guarantees or restrictive covenants that are material.
We determine if an agreement is or contains a lease at inception by evaluating whether an identified asset exists that we control over the term of the arrangement. A lease commences when the lessor makes the identified asset available for our use. We generally account for lease and non-lease components as a single lease component. Minimum lease payments do not include variable lease payments other than those that depend on an index or rate.
Because the interest rate implicit in the lease cannot be readily determined for the majority of our leases, we utilize our incremental borrowing rate to present value lease payments using information available at the lease commencement date. We consider our credit rating and the current economic environment in determining this collateralized rate.
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The following table sets forth the right-of-use assets and lease liabilities recognized in the Condensed Consolidated Balance Sheets.
| January 31, 2026 | April 30, 2025 | ||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Operating lease liabilities: | |||||||||||
| $ | $ | ||||||||||
Noncurrent operating lease liabilities | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
| Finance lease right-of-use assets: | |||||||||||
Machinery and equipment | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
| Finance lease liabilities: | |||||||||||
| $ | $ | ||||||||||
| $ | $ | ||||||||||
The following table summarizes the components of lease expense.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of right-of-use assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Short-term lease cost | |||||||||||||||||||||||
Total lease cost (A) | $ | $ | $ | $ | |||||||||||||||||||
(A)Total lease cost does not include sublease income which is immaterial for all years presented.
The following table sets forth cash flow and noncash information related to leases.
| Nine Months Ended January 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
| Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
| Right-of-use assets obtained in exchange for new lease liabilities: | |||||||||||
| Operating leases | |||||||||||
Finance leases | |||||||||||
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The following table summarizes the maturity of our lease liabilities by fiscal year.
| January 31, 2026 | |||||||||||
| Operating Leases | Finance Leases | ||||||||||
| 2026 (remainder of the year) | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| 2031 and beyond | |||||||||||
| Total undiscounted minimum lease payments | $ | $ | |||||||||
| Less: Imputed interest | |||||||||||
| Lease liabilities | $ | $ | |||||||||
We entered into a lease and financing agreement with the Development Authority of Columbus, Georgia (the “Development Authority”), effective December 1, 2025, in connection with a taxable revenue bond transaction between Hostess Brands, LLC and the Development Authority on December 30, 2025 (the “Bond Transaction”). The Bond Transaction required Hostess Brands, LLC to exchange its property to the taxing jurisdiction for one or more tax-exempt bonds issued in the name of Hostess Brands, LLC not to exceed $120.6 . As both the owner of the bonds and the lessee of the project, we are not required to make lease payments as our obligation to pay rent is equal to the Development Authority’s obligation to pay debt service on the bonds. Further, in connection with the Bond Transaction, we received a letter agreement from the Columbus, Georgia Board of Tax Assessors granting tax abatement for certain real and personal property located at our Columbus, Georgia bakery through 2045, subject to certain commitments. We have elected to use the right of offset under Accounting Standards Codification 210-20 to net the asset and the liability.
The following table sets forth the weighted average remaining lease term and discount rate.
| January 31, 2026 | April 30, 2025 | ||||||||||
| Weighted average remaining lease term (in years): | |||||||||||
Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | % | % | |||||||||
Finance leases | % | % | |||||||||
Note 13: Income Taxes
Income tax expense (benefit) for the three months ended January 31, 2026 and 2025, was $72.3 and $(0.2 ), respectively. The effective income tax rate for the third quarter of 2026 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit. The effective income tax rate for the third quarter of 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit, partially offset by the reversal of a deferred tax liability upon completion of the sale of the Voortman Cookies Limited entity, and a favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.
Income tax expense (benefit) for the nine months ended January 31, 2026 and 2025, was $136.8 and $152.1 , respectively. The effective income tax rate for the first nine months of 2026 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit. The effective income tax rate for the first nine months of 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and unfavorable permanent impacts associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit and the sale of the Voortman business, partially offset by the favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.
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Within the next 12 months, it is reasonably possible that we could decrease our unrecognized tax benefits by an estimated $1.1 , primarily as a result of the expiration of statute of limitation periods.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “Act”). The corporate tax changes included in the Act did not have a material impact on our effective income tax rate during the three and nine months ended January 31, 2026, and we do not anticipate a material impact on our effective income tax rate in future periods. The Act’s provisions for accelerated tax deductions will reduce our cash income tax requirements for the current year.
Note 14: Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), including the reclassification adjustments for items that are reclassified from accumulated other comprehensive income (loss) to net income (loss), are shown below.
| Foreign Currency Translation Adjustment | Net Gains (Losses) on Cash Flow Hedging Derivatives (A) | Pension and Other Postretirement Liabilities (B) | Unrealized Gain (Loss) on Available- for-Sale Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
| Balance at May 1, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Reclassification adjustments | |||||||||||||||||||||||||||||
| Current period credit (charge) | ( | ||||||||||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | ( | ( | |||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Foreign Currency Translation Adjustment | Net Gains (Losses) on Cash Flow Hedging Derivatives (A) | Pension and Other Postretirement Liabilities (B) | Unrealized Gain (Loss) on Available- for-Sale Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
| Balance at May 1, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Reclassification adjustments | |||||||||||||||||||||||||||||
| Current period credit (charge) | ( | ( | ( | ||||||||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | ( | ||||||||||||||||||||||||||
| Balance at January 31, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
(A)The reclassification from accumulated other comprehensive income (loss) is primarily composed of deferred gains (losses) related to terminated interest rate contracts which were reclassified to interest expense – net. In addition, a portion of the reclassification in 2025 was reclassified to other debt gains (charges) – net resulting from the extinguishment of debt from the tender offers. For additional information, see Note 8: Debt and Financing Arrangements and Note 10: Derivative Financial Instruments.
(B)The reclassification from accumulated other comprehensive income (loss) to other income (expense) – net is composed of settlement charges and amortization of net losses and prior service costs. For additional information, see Note 9: Pensions and Other Postretirement Benefits.
Note 15: Contingencies
We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings, and while we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these or other matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at January 31, 2026. Based on the information known to date, with the exception of the matters discussed below, we do not believe the final outcome of these proceedings will have a material adverse effect on our financial position, results of operations, or cash flows.
Class Action Lawsuits: We are defendants in a series of putative class action lawsuits that were transferred to the U.S. District Court for the Western District of Missouri for coordinated pre-trial proceedings. The plaintiffs assert claims arising under various state laws for false advertising, consumer protection, deceptive and unfair trade practices, and similar statutes. Their claims are premised on allegations that we have misrepresented the number of servings that can be made from various canisters of Folgers coffee on the packaging for those products. The outcome and the financial impact of these cases, if any, cannot be predicted at this time. Accordingly, no loss contingency has been recorded for these matters as of January 31, 2026, as the likelihood of loss is not considered probable or reasonably estimable. However, if we are required to pay significant damages,
24
our business and financial results could be adversely impacted, and sales of those products could suffer not only in these locations but elsewhere.
Voortman Contingency: In December 2020, Hostess Brands asserted claims for indemnification against the sellers (the “Sellers”) under the terms of a Share Purchase Agreement (the “Purchase Agreement”) pursuant to which Hostess Brands acquired Voortman Cookies Limited (“Voortman”). The claims were for damages arising out of alleged breaches by the Sellers of certain representations, warranties, and covenants contained in the Purchase Agreement relating to periods prior to the closing of the acquisition. Hostess Brands also submitted claims relating to these alleged breaches under the representation and warranty insurance policy (“RWI”) that was purchased in connection with the acquisition. In the third quarter of calendar 2022, the RWI insurers paid Hostess Brands $42.5 CAD (the RWI coverage limit) (the “Proceeds”) related to these breaches. Per agreement with the RWI insurers, we will not be required to return the Proceeds under any circumstances.
On November 3, 2022, pursuant to the agreement with the RWI insurers, Voortman brought claims in the Ontario (Canada) Superior Court of Justice (the “Claim”), related to the breaches against certain of the Sellers. The Claim alleges the seller defendants made certain non-disclosures and misrepresentations to induce Hostess Brands to overpay for Voortman. We are seeking damages of $109.0 CAD representing the amount of the aggregate liability of the Sellers for indemnification under the Purchase Agreement, $5.0 CAD in punitive or aggravated damages, interest, proceedings fees, and any other relief the presiding court deems appropriate. A portion of any recovery will be shared with the RWI insurers. Although we believe that the Claim is meritorious, no assurance can be given as to whether we will recover all, or any part, of the amounts being pursued. We retained rights to the Claim upon the divestiture of the Voortman business in 2025.
Note 16: Common Shares
The following table sets forth common share information.
| January 31, 2026 | April 30, 2025 | ||||||||||
| Common shares authorized | |||||||||||
| Treasury shares | |||||||||||
Repurchase Program: During the nine months ended January 31, 2026 and 2025, we did not 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations.
Note 17: Supplier Financing Program
As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. However, our right to offset balances due from suppliers against our payment obligations is restricted by the agreement for those payment obligations that have been sold by our suppliers. The payment of these obligations is included in cash provided by operating activities in the Condensed Statements of Consolidated Cash Flows. Included in in the Condensed Consolidated Balance Sheets as of January 31, 2026, and April 30, 2025, were $296.1 and $340.4 of our outstanding payment obligations, respectively, that were elected and sold to a financial institution by participating suppliers. During the first nine months of 2026 and 2025, we paid $938.2 and $1,211.9 , respectively, to a financial institution for payment obligations that were settled through the supplier financing program.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(Dollars and shares in millions, unless otherwise noted, except per share data)
This discussion and analysis deals with comparisons of material changes in the unaudited condensed consolidated financial statements for the three and nine months ended January 31, 2026 and 2025. All comparisons presented are to the corresponding period of the prior year, unless otherwise noted.
On March 3, 2025, we sold certain Sweet Baked Snacks value brands to JTM. The transaction included certain trademarks and licenses, a manufacturing facility in Chicago, Illinois, and approximately 400 employees who supported the business. Under our ownership, these Sweet Baked Snacks value brands generated net sales of approximately $48.4 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $34.6, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $44.2 on this transaction, primarily during the third quarter of 2025.
On December 2, 2024, we sold the Voortman business to Second Nature. The transaction included products sold under the Voortman brand, inclusive of certain trademarks, a leased manufacturing facility in Burlington, Ontario, and approximately 300 employees who supported the business. Under our ownership, the Voortman business generated net sales of approximately $86.3 in 2025, which were included in the Sweet Baked Snacks segment. Net proceeds from the divestiture were $291.4, inclusive of the final working capital adjustment and cash transaction costs. We recognized a pre-tax loss of $265.9 on this transaction, primarily during the second quarter of 2025.
We are the owner of all trademarks referenced herein, except for the following, which are used under license: Dunkin’ is a trademark of DD IP Holder LLC used under three licenses (the “Dunkin’ Licenses”) for packaged coffee products, including K-Cup® pods, sold in retail channels, such as grocery stores, mass merchandisers, club stores, e-commerce, and drug stores, as well as in certain away from home channels. The Dunkin’ Licenses do not pertain to coffee or other products for sale in Dunkin’ restaurants. K-Cup® is a trademark of Keurig Green Mountain, Inc., used with permission.
Trends Affecting our Business
During the first nine months of 2026, we continued to experience input cost inflation and a dynamic macroeconomic environment, inclusive of tariffs, regulatory and policy changes, and changes in consumer behaviors, including health and wellness trends, which we anticipate will persist through the remainder of 2026. Further, the higher costs have required price increases across our business, and we anticipate that the price elasticity of demand could remain elevated during 2026 as consumers continue to experience broader inflationary pressures and are selective in their spending. In response to the inflationary pressures, we continue to focus on the delivery of our company-wide transformation initiative to deliberately translate our continuous improvement mindset into sustainable productivity initiatives in order to grow our profit margins and reinvest in the Company to enable future growth and cost savings.
In addition, it is possible significant disruptions in our supply chain could occur if certain geopolitical events continue to impact markets around the world, including the impact of potential shipping delays due to supply and demand imbalances, as well as labor shortages and tariffs. We also continue to work closely with our customers and external business partners, taking additional actions to ensure safety and business continuity and to maximize product availability. We have maintained production at all our facilities and availability of appointments at distribution centers.
Although we do not have any operations in Russia, Ukraine, Israel, Palestine, China, or Taiwan, we continue to monitor these environments, among others, for any significant escalation or expansion of economic or supply chain disruptions, including broader inflationary costs and the impact of tariffs, as well as regional or global economic recessions. Overall, broad-based supply chain disruptions and the impact of inflation remain uncertain. We will continue to evaluate the nature and extent to which supply chain disruptions and inflation will impact our business, supply chain, including labor availability and attrition, results of operations, financial condition, and liquidity.
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Results of Operations
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Increase (Decrease) | 2026 | 2025 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| Net sales | $ | 2,339.4 | $ | 2,186.0 | 7 | % | $ | 6,782.8 | $ | 6,582.3 | 3 | % | |||||||||||||||||||||||
| Gross profit | $ | 827.8 | $ | 878.1 | (6) | $ | 2,172.4 | $ | 2,561.4 | (15) | |||||||||||||||||||||||||
| % of net sales | 35.4 | % | 40.2 | % | 32.0 | % | 38.9 | % | |||||||||||||||||||||||||||
| Operating income (loss) | $ | (548.4) | $ | (594.0) | 8 | $ | (84.3) | $ | (74.8) | (13) | |||||||||||||||||||||||||
| % of net sales | (23.4) | % | (27.2) | % | (1.2) | % | (1.1) | % | |||||||||||||||||||||||||||
| Net income (loss): | |||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (724.2) | $ | (662.3) | (9) | $ | (526.8) | $ | (501.8) | (5) | |||||||||||||||||||||||||
| Net income (loss) per common share – assuming dilution | $ | (6.79) | $ | (6.22) | (9) | $ | (4.94) | $ | (4.72) | (5) | |||||||||||||||||||||||||
Adjusted gross profit (A) | $ | 790.8 | $ | 819.2 | (3) | $ | 2,323.9 | $ | 2,531.4 | (8) | |||||||||||||||||||||||||
| % of net sales | 33.8 | % | 37.5 | % | 34.3 | % | 38.5 | % | |||||||||||||||||||||||||||
Adjusted operating income (A) | $ | 431.6 | $ | 463.8 | (7) | $ | 1,196.2 | $ | 1,402.3 | (15) | |||||||||||||||||||||||||
| % of net sales | 18.4 | % | 21.2 | % | 17.6 | % | 21.3 | % | |||||||||||||||||||||||||||
Adjusted income: (A) | |||||||||||||||||||||||||||||||||||
| Income | $ | 254.5 | $ | 278.3 | (9) | $ | 682.2 | $ | 832.0 | (18) | |||||||||||||||||||||||||
| Earnings per share – assuming dilution | $ | 2.38 | $ | 2.61 | (9) | $ | 6.38 | $ | 7.80 | (18) | |||||||||||||||||||||||||
(A)We use non-GAAP financial measures to evaluate our performance. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for a reconciliation to the comparable GAAP financial measure.
Net Sales
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Increase (Decrease) | % | 2026 | 2025 | Increase (Decrease) | % | ||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 2,339.4 | $ | 2,186.0 | $ | 153.4 | 7 | % | $ | 6,782.8 | $ | 6,582.3 | $ | 200.5 | 3 | % | |||||||||||||||||||||||||||||||
| Sweet Baked Snacks value brands divestiture | — | (13.4) | 13.4 | 1 | — | (43.3) | 43.3 | 1 | |||||||||||||||||||||||||||||||||||||||
Voortman divestiture | — | (12.9) | 12.9 | 1 | — | (86.3) | 86.3 | 1 | |||||||||||||||||||||||||||||||||||||||
| Foreign currency exchange | (2.0) | — | (2.0) | — | (0.2) | — | (0.2) | — | |||||||||||||||||||||||||||||||||||||||
Net sales excluding divestitures and foreign currency exchange (A) | $ | 2,337.4 | $ | 2,159.7 | $ | 177.7 | 8 | % | $ | 6,782.6 | $ | 6,452.7 | $ | 329.9 | 5 | % | |||||||||||||||||||||||||||||||
Amounts may not add due to rounding.
(A) Net sales excluding divestitures and foreign currency exchange is a non-GAAP financial measure used to evaluate performance internally. This measure provides useful information to investors because it enables comparison of results on a year-over-year basis.
Net sales in the third quarter of 2026 increased $153.4, or 7 percent, which includes $26.3 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $177.7, or 8 percent. Net price realization contributed 10 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix decreased net sales by 2 percentage points, primarily driven by decreases for sweet baked goods and fruit spreads, and lapping contract manufacturing sales related to the divested pet food brands in the prior year, partially offset by an increase for Uncrustables sandwiches.
Net sales in the first nine months of 2026 increased $200.5, or 3 percent, which includes $129.6 of noncomparable net sales in the prior year related to divestitures. Net sales excluding divestitures and foreign currency exchange increased $329.9, or 5 percent. Net price realization contributed 9 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix decreased net sales by 4 percentage points, primarily driven by decreases for coffee, dog snacks, sweet baked goods, fruit spreads, and peanut butter, and lapping contract manufacturing sales related to the divested pet food brands in the prior year, partially offset by an increase for Uncrustables sandwiches.
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Operating Income (Loss)
The following table presents the components of operating income (loss) as a percentage of net sales.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Gross profit | 35.4 | % | 40.2 | % | 32.0 | % | 38.9 | % | |||||||||||||||
| Selling, distribution, and administrative expenses: | |||||||||||||||||||||||
| Marketing | 4.7 | % | 5.2 | % | 5.5 | % | 5.2 | % | |||||||||||||||
| Selling | 2.8 | 2.9 | 2.9 | 3.0 | |||||||||||||||||||
| Distribution | 3.1 | 3.4 | 3.1 | 3.3 | |||||||||||||||||||
| General and administrative | 5.0 | 5.4 | 5.3 | 5.9 | |||||||||||||||||||
| Total selling, distribution, and administrative expenses | 15.5 | % | 16.8 | % | 16.8 | % | 17.4 | % | |||||||||||||||
| Amortization | 2.2 | 2.5 | 2.2 | 2.5 | |||||||||||||||||||
| Goodwill impairment charges | 21.7 | 36.3 | 7.5 | 12.1 | |||||||||||||||||||
| Other intangible assets impairment charges | 19.4 | 9.5 | 6.7 | 3.2 | |||||||||||||||||||
| Other special project costs | 0.2 | 0.5 | 0.2 | 0.4 | |||||||||||||||||||
| Loss (gain) on divestitures – net | — | 2.3 | — | 4.7 | |||||||||||||||||||
| Other operating expense (income) – net | (0.2) | (0.6) | (0.2) | (0.3) | |||||||||||||||||||
| Operating income (loss) | (23.4) | % | (27.2) | % | (1.2) | % | (1.1) | % | |||||||||||||||
Amounts may not add due to rounding.
Gross profit decreased $50.3, or 6 percent, in the third quarter of 2026, primarily driven by higher costs, inclusive of commodity costs and tariffs, and unfavorable volume/mix, partially offset by higher net price realization.
Operating loss decreased $45.6, or 8 percent, in the third quarter of 2026, primarily driven by lapping a $50.2 net pre-tax loss on divestitures in the prior year and a $40.8 decrease in impairment charges related to the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, partially offset by the decrease in gross profit.
Our non-GAAP financial measures are adjusted to exclude amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Refer to “Non-GAAP Financial Measures” in this discussion and analysis for additional information. Gross profit excluding non-GAAP adjustments (“adjusted gross profit”) decreased $28.4, or 3 percent, as compared to the prior year third quarter, primarily reflecting the exclusion of the change in special project costs as compared to GAAP gross profit. Adjusted operating income decreased $32.2, or 7 percent, as compared to the prior year third quarter, further reflecting the exclusion of the net pre-tax loss on the divestitures in the prior year and the change in noncash impairment charges.
Gross profit decreased $389.0, or 15 percent, in the first nine months of 2026, primarily driven by higher commodity costs, a net unfavorable impact of derivative gains and losses, tariffs, unfavorable volume/mix, an increase in special project costs, and the noncomparable impact of divestitures, partially offset by higher net price realization.
Operating loss increased $9.5, or 13 percent, in the first nine months of 2026, primarily reflecting the decrease in gross profit, partially offset by lapping a $311.0 net pre-tax loss on divestitures in the prior year, a $40.8 decrease in impairment charges related to the goodwill of the Sweet Baked Snacks reporting unit and Hostess brand indefinite-lived trademark, lower amortization expense, and a decrease in other special project costs.
Adjusted gross profit decreased $207.5, or 8 percent, as compared to the prior year, reflecting the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs as compared to GAAP gross profit. Adjusted operating income decreased $206.1, or 15 percent, as compared to the prior year, further reflecting the exclusion of the net pre-tax loss on the divestitures in the prior year and the change in noncash impairment charges, amortization, and other special project costs.
Interest Expense
Net interest expense was comparable to the prior year for the three and nine months ended January 31, 2026. For additional information, refer to Note 8: Debt and Financing Arrangements.
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Income Taxes
Income tax expense (benefit) for the three months ended January 31, 2026 and 2025, was $72.3 and $(0.2), respectively. The effective income tax rate for the third quarter of 2026 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit. The effective income tax rate for the third quarter of 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and an unfavorable permanent impact associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit, partially offset by the reversal of the deferred tax liability upon completion of the sale of the Voortman Cookies Limited entity, and a favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.
Income tax expense (benefit) for the nine months ended January 31, 2026 and 2025, was $136.8 and $152.1, respectively. The effective income tax rate for the first nine months of 2026 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and the unfavorable permanent impacts associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit. The effective income tax rate for the first nine months of 2025 varied from the U.S. statutory income tax rate of 21.0 percent primarily due to state income taxes and the unfavorable permanent impacts associated with the goodwill impairment charge for the Sweet Baked Snacks reporting unit and the sale of the Voortman business, partially offset by the favorable noncash deferred tax benefit associated with the integration of Hostess Brands into our Company.
We anticipate a full-year effective income tax rate for 2026 to be approximately (32.5) percent. For additional information, refer to Note 7: Goodwill and Other Intangible Assets and Note 13: Income Taxes.
Special Project Costs
Divestiture Costs: Total divestiture costs incurred to date related to the Sahale Snacks and Canada condiment businesses that were divested in 2024 were $6.4, which included $4.3 and $2.1 of employee-related and other transition and termination costs, respectively, all of which were cash charges. We did not incur any divestiture costs during the three and nine months ended January 31, 2026, and incurred divestiture costs of $1.3 and $1.7 during the three and nine months ended January 31, 2025, respectively, primarily consisting of employee-related costs. We do not anticipate any additional costs to be incurred related to these divestiture activities.
As a result of our recent divestitures, we identified opportunities to address certain distribution inefficiencies. We anticipate incurring approximately $12.0 of costs related to these efforts, consisting primarily of other transition and termination charges. The majority of these costs are expected to be cash charges and incurred by the end of 2026. We have recognized total cumulative costs of $8.9, of which $0.5 and $2.4 were recognized during the three and nine months ended January 31, 2026, respectively, and $2.1 and $3.0 during the three and nine months ended January 31, 2025, respectively, primarily consisting of other transition and termination costs.
Integration Costs: On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands, a manufacturer and marketer of sweet baked goods brands. Total integration costs related to the acquisition are anticipated to be approximately $190.0 and include transaction costs, employee-related costs, and other transition and termination charges. We have recognized total cumulative integration costs of $186.4, of which $0.4 and $1.5 were recognized during the three and nine months ended January 31, 2026, respectively, and $7.8 and $34.9 were recognized during the three and nine months ended January 31, 2025, respectively. We anticipate the remaining integration costs will be incurred by the end of 2026 and are expected to be split between employee-related and other transition and termination costs.
Restructuring Costs: During the first quarter of 2026, we announced plans to close our Indianapolis, Indiana manufacturing facility, which manufactures Hostess branded products, and consolidated operations into other existing facilities during the third quarter of 2026 to further optimize operations within our Sweet Baked Snacks segment. We have recognized total cumulative costs of $74.4, which included $26.5 and $74.4 of employee-related and other transition and termination costs, during the three and nine months ended January 31, 2026, respectively. We anticipate any remaining charges to be minimal.
For further information on these costs, refer to Note 4: Special Project Costs.
Segment Results
We have four reportable segments: U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks. The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable. Subsequent to the third quarter of 2026, we announced several senior leadership updates in support of continued advancement of our long-term growth strategy and enhancement of our profitability and earnings. As a result, we are evaluating the impact of these changes to the way in which we present our reportable segments during the fourth quarter of 2026.
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The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers, Dunkin’, and Café Bustelo branded coffee; the U.S. Retail Frozen Handheld and Spreads segment primarily includes the domestic sales of Uncrustables, Jif, and Smucker’s branded products; the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix, Milk-Bone, Pup-Peroni, and Canine Carry Outs branded products; and the Sweet Baked Snacks segment primarily includes all domestic and foreign sales of Hostess branded products in all channels. With the exception of Sweet Baked Snacks products, International and Away From Home includes the sale of all products that are distributed in foreign countries through retail channels, as well as domestically and in foreign countries through foodservice distributors and operators (e.g., healthcare operators, restaurants, educational institutions, offices, lodging and gaming establishments, and convenience stores).
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Increase (Decrease) | 2026 | 2025 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | $ | 908.2 | $ | 740.6 | 23 | % | $ | 2,474.3 | $ | 2,068.0 | 20 | % | |||||||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | 454.0 | 445.2 | 2 | 1,399.8 | 1,427.2 | (2) | |||||||||||||||||||||||||||||
| U.S. Retail Pet Foods | 417.1 | 423.0 | (1) | 1,198.3 | 1,268.1 | (6) | |||||||||||||||||||||||||||||
| Sweet Baked Snacks | 224.8 | 278.6 | (19) | 734.1 | 927.8 | (21) | |||||||||||||||||||||||||||||
| International and Away From Home | 335.3 | 298.6 | 12 | 976.3 | 891.2 | 10 | |||||||||||||||||||||||||||||
| Segment profit: | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | $ | 199.0 | $ | 208.6 | (5) | % | $ | 487.5 | $ | 583.9 | (17) | % | |||||||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | 103.6 | 99.2 | 4 | 320.0 | 334.3 | (4) | |||||||||||||||||||||||||||||
| U.S. Retail Pet Foods | 121.9 | 116.8 | 4 | 347.6 | 353.5 | (2) | |||||||||||||||||||||||||||||
| Sweet Baked Snacks | 12.2 | 54.8 | (78) | 68.2 | 199.8 | (66) | |||||||||||||||||||||||||||||
| International and Away From Home | 72.0 | 61.6 | 17 | 213.9 | 178.2 | 20 | |||||||||||||||||||||||||||||
| Segment profit margin: | |||||||||||||||||||||||||||||||||||
| U.S. Retail Coffee | 21.9 | % | 28.2 | % | 19.7 | % | 28.2 | % | |||||||||||||||||||||||||||
| U.S. Retail Frozen Handheld and Spreads | 22.8 | 22.3 | 22.9 | 23.4 | |||||||||||||||||||||||||||||||
| U.S. Retail Pet Foods | 29.2 | 27.6 | 29.0 | 27.9 | |||||||||||||||||||||||||||||||
| Sweet Baked Snacks | 5.4 | 19.7 | 9.3 | 21.5 | |||||||||||||||||||||||||||||||
| International and Away From Home | 21.5 | 20.6 | 21.9 | 20.0 | |||||||||||||||||||||||||||||||
U.S. Retail Coffee
The U.S. Retail Coffee segment net sales increased $167.6 in the third quarter of 2026. Net price realization increased net sales by 23 percentage points, reflecting higher net pricing across the portfolio. Volume/mix decreased net sales by 1 percentage point, reflecting decreases for the Dunkin’ and Folgers brands, partially offset by an increase for the Café Bustelo brand. Segment profit decreased $9.6, primarily reflecting higher commodity costs, tariffs, unfavorable volume/mix, and lapping favorable property taxes in the prior year, partially offset by higher net price realization.
The U.S. Retail Coffee segment net sales increased $406.3 in the first nine months of 2026. Net price realization increased net sales by 23 percentage points, reflecting higher net pricing across the portfolio. Volume/mix decreased net sales by 3 percentage points, reflecting decreases for the Dunkin’ and Folgers brands, partially offset by an increase for the Café Bustelo brand. Segment profit decreased $96.4, primarily reflecting higher commodity costs, tariffs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.
U.S. Retail Frozen Handheld and Spreads
The U.S. Retail Frozen Handheld and Spreads segment net sales increased $8.8 in the third quarter of 2026. Net price realization contributed 2 percentage points to net sales, primarily reflecting higher net pricing for Uncrustables sandwiches, partially offset by higher trade spend for peanut butter. Volume/mix was neutral to net sales, as an increase for peanut butter was mostly offset by a decrease for fruit spreads. Segment profit increased $4.4, primarily driven by higher net price realization and lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility, partially offset by higher costs and unfavorable volume/mix.
The U.S. Retail Frozen Handheld and Spreads segment net sales decreased $27.4 in the first nine months of 2026. Volume/mix decreased net sales by 3 percentage points, primarily reflecting decreases for peanut butter and fruit spreads. Net price
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realization contributed 2 percentage points to net sales, reflecting higher net pricing for Uncrustables sandwiches, partially offset by higher trade spend for peanut butter. Segment profit decreased $14.3, primarily driven by unfavorable volume/mix, higher marketing spend, and higher costs, partially offset by higher net price realization and lower pre-production expenses related to the new Uncrustables sandwiches manufacturing facility.
U.S. Retail Pet Foods
The U.S. Retail Pet Foods segment net sales decreased $5.9 in the third quarter of 2026. Volume/mix decreased net sales by 2 percentage points, primarily driven by lapping contract manufacturing sales related to the divested pet food brands in the prior year and a decrease for dog snacks, partially offset by an increase for cat food. Net price realization was neutral to net sales, as higher net pricing for cat food was mostly offset by lower net pricing for dog snacks. Segment profit increased $5.1, primarily reflecting lower marketing spend.
The U.S. Retail Pet Foods segment net sales decreased $69.8 in the first nine months of 2026. Volume/mix decreased net sales by 6 percentage points, primarily reflecting a decrease for dog snacks and lapping contract manufacturing sales related to the divested pet food brands in the prior year, partially offset by an increase for cat food. Net price realization was neutral to net sales. Segment profit decreased $5.9, primarily reflecting unfavorable volume/mix, partially offset by lower marketing spend and higher net price realization.
Sweet Baked Snacks
The Sweet Baked Snacks segment net sales decreased $53.8 in the third quarter of 2026, inclusive of the impact of $26.3 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands. Excluding the noncomparable impact of the divestitures, net sales decreased $27.5, or 11 percent. Volume/mix decreased net sales by 10 percentage points, primarily reflecting decreases for snack cakes, donuts, and breakfast. Net price realization was neutral to net sales. Segment profit decreased $42.6, primarily reflecting higher costs, unfavorable volume/mix, and higher marketing spend.
The Sweet Baked Snacks segment net sales decreased $193.7 in the first nine months of 2026, inclusive of the impact of $129.6 of noncomparable net sales in the prior year related to the divested Voortman business and certain Sweet Baked Snacks value brands. Excluding the noncomparable impact of the divestitures, net sales decreased $64.1, or 8 percent. Volume/mix decreased net sales by 7 percentage points, primarily reflecting decreases for snack cakes and private label products. Net price realization decreased net sales by 1 percentage point, primarily reflecting lower net pricing across the majority of the portfolio. Segment profit decreased $131.6, primarily reflecting higher costs, unfavorable volume/mix, the impact of noncomparable segment profit in the prior year related to the divested businesses, and higher marketing spend.
Subsequent to January 31, 2026, a fire occurred at our Emporia, Kansas manufacturing facility resulting in a temporary disruption of production. We expect the incident to result in reduced net sales in the fourth quarter of 2026. While we continue to evaluate the operational and financial effects of the incident, including potential insurance recoveries, we do not anticipate it to have a material impact on earnings.
International and Away From Home
International and Away From Home net sales increased $36.7 in the third quarter of 2026, including $2.0 of favorable foreign currency exchange. Excluding the noncomparable impact of foreign currency exchange, net sales increased $34.7, or 12 percent. Net price realization contributed 11 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix was neutral to net sales, as increases for Uncrustables sandwiches and coffee was mostly offset by decreases for fruit spreads, portion control products, cat food, and peanut butter. Segment profit increased $10.4, primarily driven by higher net price realization, partially offset by higher costs, tariffs, and unfavorable volume/mix.
International and Away From Home net sales increased $85.1 in the first nine months of 2026, including $0.2 of favorable foreign currency exchange. Excluding the noncomparable impact of foreign currency exchange, net sales increased $84.9, or 10 percent. Net price realization contributed 10 percentage points to net sales, primarily driven by higher net pricing for coffee. Volume/mix was neutral to net sales as decreases for coffee, fruit spreads, portion control products, and dog snacks were mostly offset by an increase for Uncrustables sandwiches. Segment profit increased $35.7, primarily driven by higher net price realization and lower selling, distribution, and administrative expenses, partially offset by higher costs and tariffs.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Our principal source of funds is cash generated from operations, supplemented by borrowings against our commercial paper program and revolving credit facility. Total cash and cash equivalents decreased to $52.8 at January 31, 2026, compared to $69.9 at April 30, 2025.
The following table presents selected cash flow information.
| Nine Months Ended January 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by (used for) operating activities | $ | 894.4 | $ | 816.5 | |||||||
| Net cash provided by (used for) investing activities | (173.9) | (18.5) | |||||||||
| Net cash provided by (used for) financing activities | (737.7) | (810.6) | |||||||||
| Net cash provided by (used for) operating activities | $ | 894.4 | $ | 816.5 | |||||||
| Additions to property, plant, and equipment | (222.1) | (298.8) | |||||||||
Free cash flow (A) | $ | 672.3 | $ | 517.7 | |||||||
(A)Free cash flow is a non-GAAP financial measure used by management to evaluate the amount of cash available for debt repayment, dividend distribution, acquisition opportunities, share repurchases, and other corporate purposes.
The $77.9 increase in cash provided by operating activities in the first nine months of 2026 was primarily driven by lower working capital requirements in 2026 and a decrease in cash used for income and other taxes, primarily reflecting lower taxable income and timing of income tax payments, partially offset by lower net income (loss) adjusted for noncash items in the current year. The cash required to fund working capital decreased compared to the prior year, primarily driven by lower inventories, reflecting moderation in input cost inflation during the current year, a reduction in payments related to transition services agreements entered into in connection with the divestitures, and the timing of settling our derivative instruments. These increases in cash were partially offset by a decrease in cash related to the change in trade receivables due to the timing of sales and payments.
Cash used for investing activities in the first nine months of 2026 consisted primarily of $222.1 in capital expenditures, primarily reflecting plant maintenance and improvement of our facilities, partially offset by a decrease of $34.8 in our derivative cash margin account balances. Cash used for investing activities in the first nine months of 2025 consisted primarily of $298.8 in capital expenditures, reflecting our investments in the new Uncrustables sandwiches manufacturing and distribution facilities in McCalla, Alabama, as well as plant maintenance across our facilities, and also included an increase of $10.4 in our derivative cash margin account balances. These uses of cash for 2025 were partially offset by net proceeds received of $290.5 from the divested Voortman business.
Cash used for financing activities in the first nine months of 2026 consisted primarily of dividend payments of $347.9, long-term debt repayments of 200.0, and a net decrease in short-term borrowings of $181.0. Cash used for financing activities in the first nine months of 2025 consisted primarily of dividend payments of $340.9, long-term debt repayments of $300.0, and a net decrease in short-term borrowings of $153.2.
Supplier Financing Program
As part of ongoing efforts to maximize working capital, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. Payment terms with our suppliers, which we deem to be commercially reasonable, range from 0 to 180 days. We have an agreement with a third-party administrator to provide an accounts payable tracking system and facilitate a supplier financing program, which allows participating suppliers the ability to monitor and voluntarily elect to sell our payment obligations to a designated third-party financial institution. Participating suppliers can sell one or more of our payment obligations at their sole discretion. We have no economic interest in a supplier’s decision to enter into these agreements. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted by our suppliers’ decisions to sell amounts under these arrangements. As of January 31, 2026, and April 30, 2025, $296.1 and $340.4 of our outstanding payment obligations, respectively, were elected and sold to a financial institution by participating suppliers. During the first nine months of 2026 and 2025, we paid $938.2 and $1,211.9, respectively, to a financial institution for payment obligations that were settled through the supplier financing program.
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Contingencies
We, like other food manufacturers, are from time to time subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. We are currently a defendant in a variety of such legal proceedings, and while we cannot predict with certainty the ultimate results of these proceedings or potential settlements associated with these or other matters, we have accrued losses for certain contingent liabilities that we have determined are probable and reasonably estimable at January 31, 2026. Based on the information known to date, with the exception of the matters discussed below, we do not believe the final outcome of these proceedings will have a material adverse effect on our financial position, results of operations, or cash flows.
Class Action Lawsuits: We are defendants in a series of putative class action lawsuits that were transferred to the U.S. District Court for the Western District of Missouri for coordinated pre-trial proceedings. The plaintiffs assert claims arising under various state laws for false advertising, consumer protection, deceptive and unfair trade practices, and similar statutes. Their claims are premised on allegations that we have misrepresented the number of servings that can be made from various canisters of Folgers coffee on the packaging for those products. The outcome and the financial impact of these cases, if any, cannot be predicted at this time. Accordingly, no loss contingency has been recorded for these matters as of January 31, 2026, as the likelihood of loss is not considered probable or reasonably estimable. However, if we are required to pay significant damages, our business and financial results could be adversely impacted, and sales of those products could suffer not only in these locations but elsewhere.
Voortman Contingency: In December 2020, Hostess Brands asserted claims for indemnification against the Sellers under the terms of the Purchase Agreement pursuant to which Hostess Brands acquired Voortman. The claims were for damages arising out of alleged breaches by the Sellers of certain representations, warranties, and covenants contained in the Purchase Agreement relating to periods prior to the closing of the acquisition. Hostess Brands also submitted claims relating to these alleged breaches under RWI that was purchased in connection with the acquisition. In the third quarter of calendar 2022, the RWI insurers paid Hostess Brands the Proceeds related to these breaches. Per agreement with the RWI insurers, we will not be required to return the Proceeds under any circumstances.
On November 3, 2022, pursuant to the agreement with the RWI insurers, Voortman brought the Claim related to the breaches against certain of the Sellers. The Claim alleges the seller defendants made certain non-disclosures and misrepresentations to induce Hostess Brands to overpay for Voortman. We are seeking damages of $109.0 CAD representing the amount of the aggregate liability of the Sellers for indemnification under the Purchase Agreement, $5.0 CAD in punitive or aggravated damages, interest, proceedings fees, and any other relief the presiding court deems appropriate. A portion of any recovery will be shared with the RWI insurers. Although we believe that the Claim is meritorious, no assurance can be given as to whether we will recover all, or any part, of the amounts being pursued. We retained rights to the Claim upon the divestiture of the Voortman business in 2025.
Capital Resources
The following table presents our capital structure.
| January 31, 2026 | April 30, 2025 | ||||||||||
| Short-term borrowings | $ | 486.9 | $ | 640.8 | |||||||
| Long-term debt | 6,841.3 | 7,036.8 | |||||||||
| Total debt | $ | 7,328.2 | $ | 7,677.6 | |||||||
| Shareholders’ equity | 5,236.1 | 6,082.6 | |||||||||
| Total capital | $ | 12,564.3 | $ | 13,760.2 | |||||||
We have available a $2.0 billion unsecured revolving credit facility with a group of ten banks that matures in March 2030. Additionally, we participate in a commercial paper program under which we can issue short-term, unsecured commercial paper not to exceed $2.0 billion at any time. The commercial paper program is backed by our revolving credit facility and reduces what we can borrow under the revolving credit facility by the amount of commercial paper outstanding. Commercial paper is used as a continuing source of short-term financing for general corporate purposes. As of January 31, 2026, we had $487.0 of short-term borrowings outstanding, which were issued under our commercial paper program at a weighted-average interest rate of 3.85 percent.
We are in compliance with all our debt covenants as of January 31, 2026, and expect to be for the next 12 months. For additional information on our long-term debt, sources of liquidity, and debt covenants, see Note 8: Debt and Financing Arrangements.
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Dividend payments were $347.9 and $340.9 in the first nine months of 2026 and 2025, respectively, and dividends declared per share were $3.30 and $3.24 in the first nine months of 2026 and 2025, respectively. The declaration of dividends is subject to the discretion of our Board and depends on various factors, such as our net income (loss), financial condition, cash requirements, future events, and other factors deemed relevant by the Board.
During the nine months ended January 31, 2026, we did not repurchase any common shares under a repurchase plan authorized by the Board. The shares repurchased during the nine months ended January 31, 2026 and 2025, consisted of shares repurchased from stock plan recipients in lieu of cash payments. As of January 31, 2026, approximately 1.1 million common shares remain available for repurchase pursuant to the Board’s authorizations. There is no guarantee as to the exact number of shares that may be repurchased or when such purchases may occur.
Absent any material acquisitions or other significant investments, we believe that cash on hand, combined with cash provided by operations, borrowings available under our revolving credit facility and commercial paper program, and access to capital markets, will be sufficient to meet our cash requirements for the next 12 months, including the payment of quarterly dividends, principal and interest payments on debt outstanding, and capital expenditures. However, as a result of the current macroeconomic environment, we may experience an increase in the cost or the difficulty to obtain debt or equity financing, or to refinance our debt in the future. We continue to evaluate these risks, which could affect our financial condition or our ability to fund operations or future investment opportunities.
As of January 31, 2026, total cash and cash equivalents of $45.2 was held by our foreign subsidiaries, primarily in Canada. During the third quarter of 2026, we returned $42.1 of foreign cash to the U.S. from Canada. The repatriation was subject to $2.1 of foreign withholding taxes, while U.S. federal and state income taxes were not significant. There was no other foreign cash repatriated to the U.S. during 2026.
Material Cash Requirements
We do not have material off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as variable interest entities. Transactions with related parties are in the ordinary course of business and are not material to our results of operations, financial condition, or cash flows.
As of January 31, 2026, there were no material changes to our material cash requirements as previously reported in our Annual Report on Form 10-K for the year ended April 30, 2025.
NON-GAAP FINANCIAL MEASURES
We use non-GAAP financial measures including: net sales excluding divestitures and foreign currency exchange, adjusted gross profit, adjusted operating income, adjusted income, adjusted earnings per share, and free cash flow, as key measures for purposes of evaluating performance internally. We believe that investors’ understanding of our performance is enhanced by disclosing these performance measures. Furthermore, these non-GAAP financial measures are used by management in preparation of the annual budget and for the monthly analyses of our operating results. The Board also utilizes certain non-GAAP financial measures as components for measuring performance for incentive compensation purposes.
Non-GAAP financial measures exclude certain items affecting comparability that can significantly affect the year-over-year assessment of operating results, which include amortization expense and impairment charges related to intangible assets, special project costs, gains and losses on divestitures, the change in net cumulative unallocated derivative gains and losses, and other infrequently occurring items that do not directly reflect ongoing operating results. Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income before income taxes and reflects the exclusion of the previously discussed items, as well as any adjustments for one-time tax-related activities, when they occur. While this adjusted effective income tax rate does not generally differ materially from our GAAP effective income tax rate, certain exclusions from non-GAAP results, such as the unfavorable income tax impacts associated with the impairment charges for the Sweet Baked Snacks reporting unit, can significantly impact our adjusted effective income tax rate.
These non-GAAP financial measures are not intended to replace the presentation of financial results in accordance with U.S. GAAP. Rather, the presentation of these non-GAAP financial measures supplements other metrics we use to internally evaluate our business and facilitate the comparison of past and present operations and liquidity. These non-GAAP financial measures may not be comparable to similar measures used by other companies and may exclude certain nondiscretionary expenses and cash payments.
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The following table reconciles certain non-GAAP measures to the comparable GAAP financial measure. See page 27 for a reconciliation of net sales adjusted for certain noncomparable items to the comparable GAAP financial measure.
| Three Months Ended January 31, | Nine Months Ended January 31, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Gross profit reconciliation: | |||||||||||||||||||||||||||||
| Gross profit | $ | 827.8 | $ | 878.1 | $ | 2,172.4 | $ | 2,561.4 | |||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | (59.3) | (60.0) | 90.8 | (41.7) | |||||||||||||||||||||||||
Cost of products sold – special project costs | 22.3 | 1.1 | 60.7 | 11.7 | |||||||||||||||||||||||||
| Adjusted gross profit | $ | 790.8 | $ | 819.2 | $ | 2,323.9 | $ | 2,531.4 | |||||||||||||||||||||
| Operating income (loss) reconciliation: | |||||||||||||||||||||||||||||
| Operating income (loss) | $ | (548.4) | $ | (594.0) | $ | (84.3) | $ | (74.8) | |||||||||||||||||||||
| Amortization | 50.3 | 53.9 | 150.7 | 165.7 | |||||||||||||||||||||||||
| Goodwill impairment charges | 507.5 | 794.3 | 507.5 | 794.3 | |||||||||||||||||||||||||
| Other intangible assets impairment charges | 454.2 | 208.2 | 454.2 | 208.2 | |||||||||||||||||||||||||
| Loss (gain) on divestitures – net | — | 50.2 | — | 311.0 | |||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | (59.3) | (60.0) | 90.8 | (41.7) | |||||||||||||||||||||||||
Cost of products sold – special project costs | 22.3 | 1.1 | 60.7 | 11.7 | |||||||||||||||||||||||||
| Other special project costs | 5.0 | 10.1 | 16.6 | 27.9 | |||||||||||||||||||||||||
| Adjusted operating income | $ | 431.6 | $ | 463.8 | $ | 1,196.2 | $ | 1,402.3 | |||||||||||||||||||||
| Net income (loss) reconciliation: | |||||||||||||||||||||||||||||
| Net income (loss) | $ | (724.2) | $ | (662.3) | $ | (526.8) | $ | (501.8) | |||||||||||||||||||||
| Income tax expense (benefit) | 72.3 | (0.2) | 136.8 | 152.1 | |||||||||||||||||||||||||
| Amortization | 50.3 | 53.9 | 150.7 | 165.7 | |||||||||||||||||||||||||
| Goodwill impairment charges | 507.5 | 794.3 | 507.5 | 794.3 | |||||||||||||||||||||||||
| Other intangible assets impairment charges | 454.2 | 208.2 | 454.2 | 208.2 | |||||||||||||||||||||||||
| Loss (gain) on divestitures – net | — | 50.2 | — | 311.0 | |||||||||||||||||||||||||
| Change in net cumulative unallocated derivative gains and losses | (59.3) | (60.0) | 90.8 | (41.7) | |||||||||||||||||||||||||
| Cost of products sold – special project costs | 22.3 | 1.1 | 60.7 | 11.7 | |||||||||||||||||||||||||
| Other special project costs | 5.0 | 10.1 | 16.6 | 27.9 | |||||||||||||||||||||||||
| Other expense – special project costs | 0.1 | — | 1.0 | — | |||||||||||||||||||||||||
| Other infrequently occurring items: | |||||||||||||||||||||||||||||
Other debt charges (gains) – net (A) | — | (30.3) | — | (30.3) | |||||||||||||||||||||||||
Pension plan termination settlement charge (B) | 7.8 | — | 7.8 | — | |||||||||||||||||||||||||
| Adjusted income before income taxes | $ | 336.0 | $ | 365.0 | $ | 899.3 | $ | 1,097.1 | |||||||||||||||||||||
| Income taxes, as adjusted | 81.5 | 86.7 | 217.1 | 265.1 | |||||||||||||||||||||||||
| Adjusted income | 254.5 | 278.3 | 682.2 | $ | 832.0 | ||||||||||||||||||||||||
Weighted-average shares – assuming dilution (C) | 106.9 | 106.7 | 106.9 | 106.6 | |||||||||||||||||||||||||
Adjusted earnings per share – assuming dilution (C) | $ | 2.38 | $ | 2.61 | $ | 6.38 | $ | 7.80 | |||||||||||||||||||||
(A)Net other debt charges (gains) includes a net gain on extinguishment of debt as a result of the tender offers completed during the third quarter of 2025. For more information, see Note 8: Debt and Financing Arrangements.
(B)Represents the nonrecurring pre-tax settlement charge recognized during the third quarter of 2026 related to the termination of one of our U.S. qualified defined benefit plans. For more information, see Note 9: Pensions and Other Postretirement Benefits.
(C)Adjusted earnings per common share – assuming dilution for the three and nine months ended January 31, 2026 and 2025, was computed using the treasury stock method. Further, for the three and nine months ended January 31, 2026 and 2025, the weighted-average shares – assuming dilution differed from our GAAP weighted-average common shares outstanding – assuming dilution as a result of the anti-dilutive effect of our stock-based awards, which were excluded from the computation of net loss per share – assuming dilution. For more information see Note 6: Earnings per Share.
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CRITICAL ACCOUNTING ESTIMATES AND POLICIES
A discussion of our critical accounting estimates and policies can be found in the “Management’s Discussion and Analysis” section of our Annual Report on Form 10-K for the year ended April 30, 2025. There were no material changes to the information previously disclosed, with the exception of the item discussed below.
During the third quarter of 2026, both net sales and segment profit continued to underperform as compared to plan for the Sweet Baked Snacks segment, reflecting sustained challenges in the sweet baked goods category, ongoing executional and operating challenges, and the impact of a dynamic macroeconomic environment, inclusive of continued pressures on consumer discretionary spending and an evolving regulatory environment. Furthermore, we also completed our long-range planning process during the third quarter of 2026, which resulted in a decrease in projected net sales and segment profit for the Sweet Baked Snacks segment, as compared to the projected financial information used in the previous impairment test during the fourth quarter of 2025. The declines are reflective of both near-term underperformance and long-term expectations for both net sales and segment profit, driven by the sustained reduction in consumer discretionary income due to inflationary pressures and an overall shift in consumer sentiment related to sweet baked goods, contributing to a slower than anticipated recovery in the sweet baked goods category. In addition, the overall reduction in net sales and segment profit, in conjunction with the sustained underperformance of the sweet baked goods category, led to a further reduction of the projected long-term growth rate and royalty rate for the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively.
As a result of these declines and the narrow differences between estimated fair values and carrying values as of April 30, 2025, we performed an interim impairment analysis on the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark. We recognized total pre-tax impairment charges of $961.7 during the third quarter of 2026, of which $507.5 and $454.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively. The goodwill impairment charge represents the full remaining carrying value of the goodwill within the Sweet Baked Snacks reporting unit and the indefinite-lived trademark impairment charge represents the excess of the carrying value over the estimated fair value. These charges were included as noncash charges in our Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows. As a result of the goodwill impairment charge, we completed an impairment review of the remaining long-lived assets within the Sweet Baked Snacks reporting unit and did not recognize any additional impairment charges. Furthermore, we reassessed the long-term strategic expectations for the Hostess brand, inclusive of the impact of recent category trends, resulting in the reprioritization of our investments in growth brands outside of the reporting unit and the brand being reclassified as a finite-lived intangible asset as of January 31, 2026. The reclassification will result in annual amortization expense of $38.8. There were no other indicators of impairment during the third quarter of 2026, and as a result, we do not believe that any of our remaining reporting units or material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
(Dollars in millions, unless otherwise noted)
The following discussions about our market risk disclosures involve forward-looking statements. Actual results could differ from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates, commodity prices, and foreign currency exchange rates.
Interest Rate Risk: The fair value of our cash and cash equivalents at January 31, 2026, approximates carrying value. We are exposed to interest rate risk with regard to existing debt consisting of fixed- and variable-rate maturities. Our interest rate exposure primarily includes U.S. Treasury rates, SOFR, and commercial paper rates in the U.S.
From time to time, we utilize derivative instruments to manage interest rate risk associated with anticipated debt transactions, as well as to manage changes in the fair value of our long-term debt. At the inception of an interest rate contract, the instrument is evaluated and documented for qualifying hedge accounting treatment. If the contract is designated as a cash flow hedge, the mark-to-market gains or losses on the contract are deferred and included as a component of accumulated other comprehensive income (loss) and generally reclassified to interest expense in the period during which the hedged transaction affects earnings. If the contract is designated as a fair value hedge, the contract is recognized at fair value on the balance sheet and changes in the fair value are recognized in interest expense. Generally, changes in the fair value of the contract are equal to changes in the fair value of the underlying debt and have no net impact on earnings.
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In November 2024, we entered into reverse treasury locks to manage our exposure to interest rate fluctuations related to the tender offers. In December 2024, concurrent with the pricing of the tender offers, we settled the reverse treasury locks and realized a net loss of $4.5 during the three months ended January 31, 2025, recognized in earnings within other debt gains (charges) – net on the Condensed Statement of Consolidated Income, netting with the gain on extinguishment associated with the tender offers.
In measuring interest rate risk by the amount of net change in the fair value of our financial liabilities, a hypothetical 100 basis-point decrease in interest rates at January 31, 2026, would increase the fair value of our long-term debt by $524.7.
Commodity Price Risk: We use certain raw materials and other commodities that are subject to price volatility caused by supply and demand conditions, political and economic variables, weather, investor speculation, and other unpredictable factors. To manage the volatility related to anticipated commodity purchases, we use derivatives with maturities of generally less than one year. We do not qualify commodity derivatives for hedge accounting treatment. As a result, the gains and losses on all commodity derivatives are immediately recognized in cost of products sold.
The following sensitivity analysis presents our potential loss (gain) of fair value resulting from a hypothetical 10 percent change in market prices related to commodities.
| January 31, 2026 | April 30, 2025 | ||||||||||
| High | $ | 112.5 | $ | 112.7 | |||||||
| Low | (29.3) | 20.0 | |||||||||
| Average | 34.4 | 49.6 | |||||||||
The estimated fair value was determined using quoted market prices and was based on our net derivative position by commodity for the previous four quarters. The calculations are not intended to represent actual gains or losses in fair value that we expect to incur. In practice, as markets move, we actively manage our risk and adjust hedging strategies as appropriate. The commodities hedged have a high inverse correlation to price changes of the derivative instrument. Thus, we would expect that over time any gain or loss in the estimated fair value of its derivatives would generally be offset by an increase or decrease in the estimated fair value of the underlying exposures.
Foreign Currency Exchange Risk: We have operations outside the U.S. with foreign currency denominated assets and liabilities, primarily denominated in Canadian currency. Because we have foreign currency denominated assets and liabilities, financial exposure may result, primarily from the timing of transactions and the movement of exchange rates. The foreign currency balance sheet exposures as of January 31, 2026, are not expected to result in a significant impact on future earnings or cash flows.
We utilize foreign currency derivatives to manage the effect of foreign currency exchange fluctuations on future cash payments primarily related to purchases of certain raw materials and finished goods. The contracts generally have maturities of less than one year. We do not qualify instruments used to manage foreign currency exchange exposures for hedge accounting treatment. Therefore, the change in value of these instruments is immediately recognized in cost of products sold. Based on our hedged foreign currency positions as of January 31, 2026, a hypothetical 10 percent change in exchange rates would not materially impact the fair value.
Revenues from customers outside the U.S., subject to foreign currency exchange, represented 4 percent of net sales during the nine months ended January 31, 2026. Thus, certain revenues and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an impact on operating results.
Certain Forward-Looking Statements
Certain statements included in this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of federal securities laws. The forward-looking statements may include statements concerning our current expectations, estimates, assumptions, and beliefs concerning future events, conditions, plans, and strategies that are not historical fact. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “expect,” “anticipate,” “believe,” “intend,” “will,” “plan,” and similar phrases.
Federal securities laws provide a safe harbor for forward-looking statements to encourage companies to provide prospective information. We are providing this cautionary statement in connection with the safe harbor provisions. Readers are cautioned not to place undue reliance on any forward-looking statements, as such statements are by nature subject to risks, uncertainties, and other factors, many of which are outside of our control and could cause actual results to differ materially from such
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statements and from our historical results and experience. These risks and uncertainties include, but are not limited to, the following:
•our ability to successfully integrate Hostess Brands’ operations and employees and to implement plans and achieve financial forecasts with respect to the Hostess Brands’ business;
•disruption from the acquisition of Hostess Brands by diverting the attention of our management and making it more difficult to maintain business and operational relationships;
•the negative effects of the acquisition of Hostess Brands on the market price of our common shares;
•the amount of the costs, fees, expenses, and charges and the risk of litigation related to the acquisition of Hostess Brands;
•the effect of the acquisition of Hostess Brands on our business relationships, operating results, ability to hire and retain key talent, and business generally;
•disruptions or inefficiencies in our operations or supply chain, including any impact caused by product recalls, political instability, terrorism, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics, work stoppages or labor shortages, or other calamities;
•risks related to the availability of, and cost inflation in, supply chain inputs, including labor, raw materials, commodities, packaging, and transportation;
•the impact of food security concerns involving either our products or our competitors’ products, changes in consumer preferences, consumer or other litigation, actions by the U.S. Food and Drug Administration or other agencies, and product recalls;
•risks associated with derivative and purchasing strategies we employ to manage commodity pricing and interest rate risks;
•the availability of reliable transportation on acceptable terms;
•our ability to achieve cost savings related to our restructuring and cost management programs in the amounts and within the time frames currently anticipated;
•our ability to generate sufficient cash flow to continue operating under our capital deployment model, including capital expenditures, debt repayment to meet our deleveraging objectives, dividend payments, and share repurchases;
•a change in outlook or downgrade in our public credit ratings by a rating agency below investment grade;
•our ability to implement and realize the full benefit of price changes, and the impact of the timing of the price changes to profits and cash flow in a particular period;
•the success and cost of marketing and sales programs and strategies intended to promote growth in our business, including product innovation;
•general competitive activity in the market, including competitors’ pricing practices and promotional spending levels;
•our ability to attract and retain key talent;
•the concentration of certain of our businesses with key customers and suppliers, including primary or single-source suppliers of certain key raw materials and finished goods, and our ability to manage and maintain key relationships;
•impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in the useful lives of other intangible assets or other long-lived assets;
•the impact of new or changes to existing governmental laws, regulations, and policies and their application, including tariffs, food ingredients, food labeling, and food accessibility;
•the outcome of tax examinations, changes in tax laws, and other tax matters;
•a disruption, failure, or security breach of our or our suppliers’ information technology systems, including, but not limited to, ransomware attacks;
•foreign currency exchange rate and interest rate fluctuations; and
•risks related to other factors described under “Risk Factors” in other reports and statements we have filed with the SEC.
Readers are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made, when evaluating the information presented in this Quarterly Report on Form 10-Q. We do not undertake any obligation to update or revise these forward-looking statements to reflect new events or circumstances subsequent to the filing of this Quarterly Report on Form 10-Q.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures: Management, including the principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act), as of January 31, 2026 (the “Evaluation Date”). Based on that evaluation, the principal executive officer and principal financial officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Controls: There have been no changes in our internal control over financial reporting that occurred during the quarter ended January 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Information required for Part II, Item 1 is incorporated by reference to the discussion in Note 15: Contingencies in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors.
Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended April 30, 2025, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with the SEC, in connection with evaluating the Company, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may affect us. The occurrence of any of these known or unknown risks could have a material adverse impact on our business, financial condition, and results of operations.
The risk factor described below updates the risk factors disclosed in "Part 1, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended April 30, 2025, to include information on an interim impairment analysis, which was performed during the third quarter of 2026.
A material impairment in the carrying value of acquired goodwill or other intangible assets could negatively affect our consolidated operating results and net worth.
A significant portion of our assets is composed of goodwill and other intangible assets, the majority of which are not amortized but are reviewed for impairment at least annually on February 1, and more often if indicators of impairment exist. At January 31, 2026, the carrying value of goodwill and other intangible assets totaled $10.9 billion, compared to total assets of $16.3 billion and total shareholders’ equity of $5.2 billion. If the carrying value of these assets exceeds the current estimated fair value, the asset would be considered impaired, and this would result in a noncash charge to earnings, which could be material. Events and conditions that could result in impairment include a sustained drop in the market price of our common shares, increased competition or loss of market share, obsolescence, product claims that result in a significant loss of sales or profitability over the product life, deterioration in macroeconomic conditions, declining financial performance in comparison to projected results, increased input costs beyond projections, or divestitures of significant brands.
As of January 31, 2026, goodwill and indefinite-lived intangible assets totaled $5.2 billion and $2.6 billion, respectively. The carrying values of the goodwill and indefinite-lived intangible assets were $2.1 billion and $1.3 billion, respectively, within the U.S. Retail Coffee segment and $1.6 billion and $1.1 billion, respectively, within the U.S. Retail Pet Foods segment, which represent approximately 80 percent of the total goodwill and indefinite-lived intangible assets as of January 31, 2026. As discussed in additional detail below, the Sweet Baked Snacks reporting unit has no remaining goodwill as a result of the impairment charges recorded during the third quarter of 2026 and the Hostess brand was reclassified as a finite-lived intangible asset.
During the third quarter of 2026, both net sales and segment profit continued to underperform as compared to plan for the Sweet Baked Snacks segment, reflecting sustained challenges in the sweet baked goods category, ongoing executional and operating challenges, and the impact of a dynamic macroeconomic environment, inclusive of continued pressures on consumer discretionary spending and an evolving regulatory environment. Furthermore, we also completed our long-range planning process during the third quarter of 2026, which resulted in a decrease in projected net sales and segment profit for the Sweet Baked Snacks segment, as compared to the projected financial information used in the previous impairment test during the fourth quarter of 2025. The declines are reflective of both near-term underperformance and long-term expectations for both net sales and segment profit, driven by the sustained reduction in consumer discretionary income due to inflationary pressures and an overall shift in consumer sentiment related to sweet baked goods, contributing to a slower than anticipated recovery in the sweet baked goods category. In addition, the overall reduction in net sales and segment profit, in conjunction with the sustained underperformance of the sweet baked goods category, led to a further reduction of the projected long-term growth rate and royalty rate for the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively.
As a result of these declines and the narrow differences between estimated fair values and carrying values as of April 30, 2025, we performed an interim impairment analysis on the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark. We recognized total pre-tax impairment charges of $961.7 during the third quarter of 2026, of which $507.5 and $454.2 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived
40
trademark, respectively. The goodwill impairment charge represents the full remaining carrying value of the goodwill within the Sweet Baked Snacks reporting unit and the indefinite-lived trademark impairment charge represents the excess of the carrying value over the estimated fair value. These charges were included as noncash charges in our Condensed Statement of Consolidated Income and Condensed Statement of Consolidated Cash Flows. As a result of the goodwill impairment charge, we completed an impairment review of the remaining long-lived assets within the Sweet Baked Snacks reporting unit and did not recognize any additional impairment charges. Furthermore, we reassessed the long-term strategic expectations for the Hostess brand, inclusive of the impact of recent category trends, resulting in the reprioritization of our investments in growth brands outside of the reporting unit and the brand being reclassified as a finite-lived intangible asset as of January 31, 2026. The reclassification will result in annual amortization expense of $38.8. There were no other indicators of impairment during the third quarter of 2026, and as a result, we do not believe that any of our remaining reporting units or material indefinite-lived intangible assets are more likely than not impaired as of January 31, 2026.
As of April 31, 2025, with the exception of the Sweet Baked Snacks reporting unit and indefinite-lived intangible assets, the estimated fair value was substantially in excess of the carrying value for all reporting units and material indefinite-lived intangible assets, and in all instances, the estimated fair value exceeded the carrying value by greater than 10 percent. While we concluded there were no additional indicators of impairment as of January 31, 2026, any significant sustained adverse change in consumer purchasing behaviors, financial results, or macroeconomic conditions could result in future impairment. For additional information, refer to Note 7: Goodwill and Other Intangible Assets.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers: The following table presents the total number of shares of common stock purchased during the third quarter of 2026, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, if any, and the maximum number of shares that may yet be purchased under the plans or programs:
| Period | (a) | (b) | (c) | (d) | ||||||||||||||||||||||
| 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 (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||||||
| November 1, 2025 - November 30, 2025 | 73 | $ | 105.24 | — | 1,111,472 | |||||||||||||||||||||
| December 1, 2025 - December 31, 2025 | 1,053 | 99.55 | — | 1,111,472 | ||||||||||||||||||||||
| January 1, 2026 - January 31, 2026 | 37 | 103.20 | — | 1,111,472 | ||||||||||||||||||||||
| Total | 1,163 | $ | 100.02 | — | 1,111,472 | |||||||||||||||||||||
(a)Shares in this column include shares repurchased from stock plan recipients in lieu of cash payments.
(d) As of January 31, 2026, there were approximately 1.1 million common shares remaining available for repurchase pursuant to the Board’s authorizations.
Item 5. Other Information.
(c) Trading Plans
During the first nine months of 2026, no director or Section 16 officer adopted terminated
Subsequent to the declaration of dividends on January 16, 2026, we entered into an accumulated deficit position, and as a result, cash dividends will be paid from capital surplus on March 2, 2026.
Item 6. Exhibits.
See the Index of Exhibits that appears on Page No. 43 of this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 26, 2026 | THE J. M. SMUCKER COMPANY | ||||
| /s/ Mark T. Smucker | |||||
| By: MARK T. SMUCKER | |||||
| Chief Executive Officer, President and Chair of the Board | |||||
| /s/ Tucker H. Marshall | |||||
| By: TUCKER H. MARSHALL | |||||
| Chief Financial Officer | Executive Vice President, Frozen Handheld and Spreads and Sweet Baked Snacks | |||||
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INDEX OF EXHIBITS
The following exhibits are either attached or incorporated herein by reference to another filing with the SEC.
| Exhibit Number | Exhibit Description | ||||
| 101.INS | XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
| 104 | The cover page of this Quarterly Report on Form 10-Q for the quarter ended January 31, 2026, formatted in Inline XBRL | ||||
* Identifies exhibits that consist of a management contract or compensatory plan or arrangement.
43
Exhibit 10.1
THE J. M. SMUCKER COMPANY
RESTRICTED STOCK AGREEMENT
WHEREAS, ______________ (the “Grantee”) is an employee of The J. M. Smucker Company, an Ohio corporation (the “Company”), or one of its Subsidiaries; and
WHEREAS, the execution of an agreement in the form hereof (this “Agreement”) has been authorized by a resolution of the Compensation and People Committee (the “Committee”) of the Board, pursuant to The J. M. Smucker Company 2020 Equity and Incentive Compensation Plan (the “Plan”), as of ______________ (the “Date of Grant”);
NOW, THEREFORE, the Company hereby grants to the Grantee __________ shares of Restricted Stock (the “Restricted Stock”), effective as of the Date of Grant, subject to the terms and conditions of the Plan and the following additional terms, conditions, limitations and restrictions.
ARTICLE I
DEFINITIONS
All terms used herein with initial capital letters and not otherwise defined herein that are defined in the Plan shall have the meanings assigned to them in the Plan.
“Disability” means the occurrence of either of the following: (i) the Grantee becoming unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) the Grantee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under the Company’s accident and health plan for employees of the Company.
ARTICLE II
CERTAIN TERMS OF THE RESTRICTED STOCK
1.Issuance of the Restricted Stock. The Restricted Stock covered by this Agreement shall be issued to the Grantee effective upon the Date of Grant. The Restricted Stock shall be registered in the Grantee’s name and shall be fully paid and nonassessable. Any certificates or evidence of award shall bear an appropriate legend referring to the restrictions hereinafter set forth.
2.Restrictions on Transfer of the Restricted Stock. The Restricted Stock may not be sold, exchanged, assigned, transferred, pledged, encumbered, or otherwise disposed of by the Grantee, except to the Company, unless the Restricted Stock has become nonforfeitable as provided in Article II, Section 3 hereof; provided, however, that the Grantee’s rights with respect
to such Restricted Stock may be transferred by will or pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in violation of the provisions of this Article II, Section 2 shall be void, and the other party to any such purported transaction shall not obtain any rights to or interest in such Restricted Stock. The Committee in its sole discretion, when and as permitted by the Plan, may waive the restrictions on transferability with respect to all or a portion of the Restricted Stock.
3.Vesting of the Restricted Stock. Subject to the terms of this Agreement and the Grantee’s compliance with the provisions set forth in the Restrictive Covenant Agreement attached hereto as Exhibit A (the “Restrictive Covenant Agreement”), which is incorporated herein by reference as if set forth in full, with the modifications set forth in Exhibit B attached hereto (the “State-Specific Modifications”) if the Grantee lives or works in one of the applicable states, the Restricted Stock conditionally vests as follows:
(a)The Restricted Stock covered by this Agreement shall vest and become nonforfeitable on the [______] anniversary of the Date of Grant (or, if such date is not a business day, then on the next succeeding business day), subject to the Grantee’s continuous service with the Company or a Subsidiary (“Continuous Service”).
(b)Notwithstanding the provisions of Article II, Section 3(a), if the Grantee’s Continuous Service is terminated by the Company other than as a result of a Termination for Cause (and not as a result of death or Disability) following two years after the Date of Grant, all of the Restricted Stock covered by this Agreement shall become nonforfeitable or transferable, as applicable.
(c)Notwithstanding the provisions of Article II, Section 3(a), if the following occur: (i) the death of the Grantee or (ii) the Grantee’s Continuous Service is terminated by the Company or a Subsidiary for Disability, then all of the Restricted Stock covered by this Agreement shall become nonforfeitable or transferable, as applicable.
(d)Notwithstanding the provisions of Article II, Section 3(a) or Article II, Section 3(b), if the Grantee’s Continuous Service is terminated within 24 months following the occurrence of a Change in Control (i) other than as a result of a Termination for Cause (and not as a result of death or Disability) or (ii) due to a resignation for Good Reason, all of the Restricted Stock covered by this Agreement shall become nonforfeitable or transferable, as applicable. For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events without the Grantee’s written consent: (i) a material adverse change in the Grantee's title, position, duties, authorities, and responsibilities; (ii) a material reduction in the Grantee's annual base salary or bonus opportunity; or (iii) relocation of the Grantee's primary work location by more than 50 miles from his or her then current location. A resignation for Good Reason will not occur unless: (x) the Grantee provides the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within 90 days after the first occurrence of such circumstances, (y) the Company fails to cure such Good Reason event(s) in all material respects within 30 days following receipt of such notice to cure, and (z) following the Company's failure to cure during the 30-day cure period, the Grantee terminates employment no later than 90 days after the expiration of such period.
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(e)Notwithstanding the provisions of Article II, Section 3(a), upon the occurrence of a Change in Control in which the Restricted Stock is not continued, assumed, or replaced with an economically equivalent equity award that contains substantially comparable terms and conditions (including vesting) as set forth in this Agreement, then all of the Restricted Stock covered by this Agreement shall become nonforfeitable or transferable, as applicable.
4.Forfeiture of Shares. The Restricted Stock shall be forfeited, except as otherwise provided in Article II, Section 3 above, if the Grantee ceases to be in Continuous Service prior to the [______] anniversary of the Date of Grant or in the event the Committee determines the Grantee has engaged in Detrimental Activity as such term is defined in the Plan. In the event of a forfeiture, any certificate(s) representing the Restricted Stock or any evidence of direct registration of the Restricted Stock covered by this Agreement shall be cancelled.
5.Dividend, Voting and Other Rights. Except as otherwise provided herein, from and after the Date of Grant, the Grantee shall have all of the rights of a shareholder with respect to the Restricted Stock covered by this Agreement, including the right to vote such Restricted Stock; provided, however, that the Grantee shall have no right to any dividends (whether in the form of cash, Common Shares, or other securities) that are declared prior to the date the applicable Restricted Stock vests.
6.Retention of Restricted Stock in Book Entry Form. The Restricted Stock shall be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Stock until all restrictions thereon shall have lapsed.
ARTICLE III
GENERAL PROVISIONS
7.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal, state, and foreign securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any Common Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law.
8.Withholding Taxes. To the extent that the Company or any Subsidiary is required to withhold federal, state, local, or foreign taxes in connection with the Restricted Stock or any delivery of Common Shares pursuant to this Agreement, and the amounts available to the Company or such Subsidiary for such withholding are insufficient, it shall be a condition to the receipt of the Restricted Stock or such delivery that the Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Grantee hereby elects to satisfy this withholding obligation by having withheld, from the Common Shares otherwise deliverable to the Grantee, Common Shares having a value equal to the minimum amount of taxes required to be withheld (except where the Grantee has made an election under Section 83(b) of the Code with respect to the Common Shares subject to delivery). The Common Shares so retained shall be credited against such withholding requirement at the Market Value per Share on the date of such retention. The Company may, at the request of the Grantee,
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withhold Common Shares for payment of taxes in excess of the minimum amount of taxes required to be withheld; provided, however, that in no event shall the Company withhold Common Shares for payment of taxes in excess of the maximum statutory individual tax rate in the jurisdiction(s) applicable to the Grantee.
9.Continuous Service. For purposes of this Agreement, the Continuous Service of the Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or Subsidiary, by reason of the (a) transfer of his or her employment among the Company and its Subsidiaries or (b) a leave of absence approved by a duly constituted officer of the Company or a Subsidiary.
10.Right to Terminate Employment. No provision of this Agreement shall limit in any way whatsoever any right that the Company or a Subsidiary may otherwise have to terminate the employment of the Grantee at any time. Nothing herein shall be deemed to create a contract or a right to employment with respect to the Grantee.
11.Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement, or other benefit or compensation plan maintained by the Company or a Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or a Subsidiary.
12.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall impair the rights of the Grantee under this Agreement without the Grantee’s consent; further provided, however, that the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with (or exemption from) Section 409A of the Code or the Dodd-Frank Wall Street Reform and Consumer Protection Act or any regulations promulgated thereunder.
13.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.
14.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which arise in connection with the grant of the Restricted Stock.
15.Nature of Grant. The Grantee agrees that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended, or terminated by the Company at any time; (b) the grant of the Restricted Stock is voluntary and
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occasional and does not create any contractual or other right to receive future grants of restricted stock, or benefits in substitution of restricted stock, even if restricted stock have been granted repeatedly in the past; (c) all decisions with respect to future restricted stock grants shall be at the sole discretion of the Company; (d) participation in the Plan is voluntary; (e) the Restricted Stock are not a part of normal or expected pay package for any purposes; (f) if the Grantee is a Covered Employee within the meaning of the Company’s Clawback of Incentive Compensation Policy (the “Policy”), he or she acknowledges and accepts the terms and conditions of the Policy as in effect on the Date of Grant; and (g) in consideration of the grant of the Restricted Stock, no claim or entitlement to compensation or damages shall be created by any forfeiture or other termination of the Restricted Stock or diminution in value of the Restricted Stock, and the Grantee releases the Company and its Subsidiaries from any such claim that may arise. If any such claim is found by a court of competent jurisdiction to have been created, then, by signing this Agreement, the Grantee shall be deemed irrevocably to have waived the Grantee’s entitlement to pursue such claim.
16.Restrictive Covenants. By executing this Agreement, the Grantee hereby agrees to the terms and conditions set forth in the Restrictive Covenant Agreement.
17.Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the Restricted Stock and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
18.Governing Law. This Agreement is made under, and shall be governed by and construed in accordance with the internal substantive laws of, the State of Ohio, without giving effect to the choice of law principles thereof.
19.Transfer Restrictions. The Restricted Stock shall be subject to the provisions of Section 16 of the Plan relating to the prohibition on the assignment or transfer of the rights granted hereunder.
20.Professional Advice. The acceptance of the Restricted Stock may have consequences under federal and state tax and securities laws that may vary depending upon the individual circumstances of the Grantee. Accordingly, the Grantee acknowledges that the Grantee has been advised to consult his or her personal legal and tax advisors in connection with this Agreement and the Restricted Stock.
21.Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Corporate Secretary of the Company at the Company’s principal executive offices. Any notice hereunder by the Company shall be given to the Grantee in writing at the most recent address as the Grantee may have on file with the Company.
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22.Data Privacy. The Grantee explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of the Grantee’s personal data as described in this Agreement by and among the Company and its Subsidiaries for the exclusive purpose of implementing, administering, and managing the Grantee’s participation in the Plan. The Grantee understands that the Company and its Subsidiaries hold (but only process or transfer to the extent required or permitted by local law) the following personal information about the Grantee: the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of all options or any other entitlement to Common Shares awarded, canceled, exercised, vested, unvested, or outstanding in the Grantee’s favor, for the purpose of implementing, administering, and managing the Plan (“Data”). The Grantee understands that Data may be transferred to third parties assisting in the implementation, administration, and management of the Plan, including [List administrator(s)], that these recipients may be located in the Grantee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than those that apply in the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting the Grantee’s local human resources representative. The Grantee authorizes these recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of implementing, administering, and managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares acquired upon the vesting of the Restricted Stock. The Grantee understands that Data shall be held only as long as is necessary to implement, administer, and manage the Grantee’s participation in the Plan and in accordance with local law. The Grantee understands that the Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data, or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee hereby understands that the Grantee may contact the Grantee’s local human resources representative.
23.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
24.Binding Effect. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors, and assigns.
25.Entire Agreement. This Agreement, the Plan, and the Restrictive Covenant Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof, merging any and all prior agreements.
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[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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This Agreement is executed by the Company as of the ______ day of __________.
THE J. M. SMUCKER COMPANY
By: ____________________________________
Name:
Title:
Name:
Title:
The undersigned hereby acknowledges receipt of an executed original of this Agreement, inclusive of the Restrictive Covenant Agreement in Exhibit A, and for employees who live or work in the applicable states, inclusive of the State-Specific Modifications in Exhibit B, together with a copy of the prospectus for the Plan, dated ________, summarizing key provisions of the Plan, and accepts the award of the Restricted Stock granted hereunder on the terms and conditions set forth herein and in the Plan, including, without limitation, agreement to the terms of Exhibits A and B.
Date: ______________________
Grantee:
Grantee:
EXHIBIT A
Restrictive Covenant Agreement
As a condition to the Grantee’s receipt of the Restricted Stock awarded to the Grantee under the terms of the Restricted Stock Agreement between the Grantee and The J. M. Smucker Company, an Ohio corporation (the “Company”), dated as of ________ (the “Award Agreement”), the Grantee agrees to be subject to the terms and conditions of this Restrictive Covenant Agreement (this “Agreement”).
1. Definitions.
All terms used herein with initial capital letters and not otherwise defined herein shall have the meanings assigned to them in the Award Agreement (including any definitions incorporated by reference to the Plan).
“Affiliated Company” means any organization controlling, controlled by, or under common control with the Company.
“Confidential Information” means the Company’s technical or business or personnel information not readily available to the public or generally known in the trade, including inventions, developments, trade secrets and other confidential information, knowledge, data and know-how of the Company or any Affiliated Company, whether or not they originated with the Grantee, or information which the Company or any Affiliated Company received from third parties under an obligation of confidentiality.
“Conflicting Product” means any product, process, machine, or service of any person or organization, other than the Company or any Affiliated Company, in existence or under development (i) that resembles or competes with a product, process, machine, or service upon or with which the Grantee worked or learned about during the Grantee’s service with the Company or any Affiliated Company or (ii) as a result of his or her job performance and duties, shall have acquired knowledge of Confidential Information, and whose use or marketability could be enhanced by application to it of Confidential Information. For purposes of this section, it shall be conclusively presumed that the Grantee has knowledge of information to which he or she has been directly exposed through actual receipt or review of memoranda or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed.
“Conflicting Organization” means any person or organization that is engaged in or about to become engaged in research on or development, production, marketing, or selling of a Conflicting Product.
“Look-back Period” means a 12-month period prior to a breach of the applicable section of this Agreement.
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“Restricted Period” means the period during which the Grantee is employed by the Company or a Subsidiary plus one year after the date the Grantee’s Continuous Service is terminated.
2. Right to Retain Common Shares Contingent on Protection of Confidential Information.
The Grantee agrees that at all times, both during and after the term of the Grantee’s service with the Company or any Affiliated Company, to hold in the strictest confidence, and not to use (except for the benefit of the Company at the Company’s direction) or disclose (except for the benefit of the Company at the Company’s direction), regardless of when disclosed to the Grantee, any and all Confidential Information of the Company or any Affiliated Company. The Grantee understands that for purposes of this Section 2, Confidential Information further includes, but is not limited to, information pertaining to any aspect of the business of the Company or any Affiliated Company which is either information not known (or known as a result of a wrongful act of the Grantee or of others who were under confidentiality obligations as to the item or items involved) by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company. If, during the Restricted Period, the Grantee discloses or uses, or threatens to disclose or use, any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the Restricted Stock, whether vested or not, shall be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Common Shares received in connection with any vesting of the Restricted Stock during the Look-back Period or the pre-tax income derived from any disposition of the Common Shares during the Look-back Period.
3. No Interference with Customers or Suppliers.
In order to forestall the disclosure or use of Confidential Information as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to the Common Shares upon vesting of the Restricted Stock is contingent upon the Grantee refraining, during the Restricted Period, for himself or herself or any third party, directly or indirectly, from using Confidential Information to (i) divert or attempt to divert from the Company (or any Affiliated Company) any business of any kind in which it is engaged, or (ii) intentionally solicit its customers with which it has a contractual relationship as to Conflicting Products, or to interfere with the contractual relationship with any of its suppliers or customers (collectively, “Interfere”). If, during the Restricted Period, the Grantee breaches his or her obligation not to Interfere, the Grantee’s right to the Common Shares upon vesting of the Restricted Stock shall not have been earned and the Restricted Stock, whether vested or not, shall be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Common Shares received in connection with any vesting of the Restricted Stock during the Look-back Period or the pre-tax income derived from any disposition of the Common Shares during the Look-back Period. For avoidance of doubt, the term “Interfere” shall not include any advertisement of Conflicting Products through the use of media intended to reach a
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broad public audience (such as television, cable, or radio broadcasts, or newspapers or magazines) or the broad distribution of coupons through the use of direct mail or through independent retail outlets. THE GRANTEE UNDERSTANDS THAT THIS SECTION 3 IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED BUT PROVIDES FOR THE CANCELLATION OF THE RESTRICTED STOCK AND A RETURN TO THE COMPANY OF THE COMMON SHARES RECEIVED IN CONNECTION WITH ANY VESTING OF THE RESTRICTED STOCK DURING THE LOOK-BACK PERIOD OR THE GROSS TAXABLE PROCEEDS OF ANY DISPOSITION OF THE COMMON SHARES DURING THE LOOK-BACK PERIOD IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO INTERFERENCE WITH CUSTOMERS OR SUPPLIERS” PROVISION DURING THE RESTRICTED PERIOD.
4. No Solicitation of Employees.
In order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to the Common Shares upon vesting of the Restricted Stock is contingent upon the Grantee refraining, during the Restricted Period, for himself or herself or any third party, directly or indirectly, from soliciting for employment any person employed by the Company, or by any Affiliated Company, during the period of the solicited person’s employment and for a period of one year after the termination of the solicited person’s employment with the Company or any Affiliated Company (collectively, “Solicit”). If, during the Restricted Period, the Grantee breaches his or her obligation not to Solicit, the Grantee’s right to the Common Shares upon vesting of the Restricted Stock shall not have been earned and the Restricted Stock, whether vested or not, shall be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Common Shares received in connection with any vesting of the Restricted Stock during the Look-back Period or the pre-tax income derived from any disposition of the Common Shares during the Look-back Period. THE GRANTEE UNDERSTANDS THAT THIS SECTION 4 IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED BUT PROVIDES FOR THE CANCELLATION OF THE RESTRICTED STOCK AND A RETURN TO THE COMPANY OF THE COMMON SHARES RECEIVED IN CONNECTION WITH ANY VESTING OF THE RESTRICTED STOCK DURING THE LOOK-BACK PERIOD OR THE GROSS TAXABLE PROCEEDS OF ANY DISPOSITION OF THE COMMON SHARES DURING THE LOOK-BACK PERIOD IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO SOLICITATION OF EMPLOYEES” PROVISION DURING THE RESTRICTED PERIOD.
5. Right to Retain Common Shares Contingent on Continuing Non-Conflicting Employment.
In order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage
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of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to the Common Shares upon vesting of the Restricted Stock is contingent upon the Grantee refraining, during the Restricted Period, from rendering services, directly or indirectly, as director, officer, employee, agent, consultant, or otherwise, to any Conflicting Organization, except a Conflicting Organization whose business is diversified and that, as to that part of its business to which the Grantee renders services, is not a Conflicting Organization, provided that the Company shall receive separate written assurances satisfactory to the Company from the Grantee and the Conflicting Organization that the Grantee shall not render services during such period with respect to a Conflicting Product. If, during the Restricted Period, the Grantee shall render services to any Conflicting Organization other than as expressly permitted herein, the Grantee’s right to the Common Shares upon vesting of the Restricted Stock shall not have been earned and the Restricted Stock, whether vested or not, shall be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Common Shares received in connection with any vesting of the Restricted Stock during the Look-back Period or the pre-tax income derived from any disposition of the Common Shares during the Look-back Period. THE GRANTEE UNDERSTANDS THAT THIS SECTION 5 IS NOT INTENDED TO AND DOES NOT PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A CONFLICTING ORGANIZATION BUT PROVIDES FOR THE CANCELLATION OF THE RESTRICTED STOCK AND A RETURN TO THE COMPANY OF THE COMMON SHARES RECEIVED IN CONNECTION WITH ANY VESTING OF THE RESTRICTED STOCK DURING THE LOOK-BACK PERIOD OR THE GROSS TAXABLE PROCEEDS OF ANY DISPOSITION OF THE COMMON SHARES DURING THE LOOK-BACK PERIOD IF THE GRANTEE SHOULD CHOOSE TO RENDER SUCH SERVICES DURING THE RESTRICTED PERIOD.
6. Injunctive and Other Available Relief.
To the extent not prohibited by law, any cancellation of the Restricted Stock pursuant to any of Sections 2 through 5 above shall not restrict, abridge, or otherwise limit in any fashion the types and scope of injunctive and other available relief to the Company. Notwithstanding any provision of this Agreement to the contrary, nothing under this Agreement shall limit, abridge, modify, or otherwise restrict the Company (or any Affiliated Company) from pursuing any or all legal, equitable, or other appropriate remedies to which the Company may be entitled under any other agreement with the Grantee, any other plan, program, policy, or arrangement of the Company (or any Affiliated Company) under which the Grantee is covered or participates, or any applicable law, all to the fullest extent not prohibited under applicable law. Further, should the Grantee be subject to another agreement with the Company containing confidentiality, non-solicitation, noncompetition, and/or invention assignment provisions, the restrictive covenants in Sections 2 through 5 of this Agreement shall supplement (rather than supersede) the covenants in such other agreements (collectively, the “Other Covenants”), and the Other Covenants shall remain in full force and effect. To the extent any conflict exists between the restrictions set forth in this Agreement and the Other Covenants, the Company shall be provided the greatest protection set forth in either agreement.
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7. Permitted Reporting and Disclosure.
Notwithstanding any language in this Agreement to the contrary, nothing in this Agreement prohibits the Grantee from (i) opposing an event or conduct that Grantee reasonably believes is a violation of law, including criminal conduct, discrimination, harassment, retaliation, a safety or health violation, or other unlawful employment practices (whether in the workplace or at a work-related event), (ii) disclosing sexual assault or sexual harassment (in the workplace, at work-related events, between employees, or between an employer and an employee or otherwise); or (iii) reporting such an event or conduct to Grantee’s attorney, law enforcement, or the relevant law-enforcement agency (such as the Securities and Exchange Commission, Department of Labor, Occupational Safety and Health Administration, Equal Employment Opportunity Commission, the state or division of human rights), or (iv) making any truthful statements or disclosures required by law or otherwise cooperating in an investigation conducted by any government agency (collectively referred to as “Protected Conduct”). Further, nothing requires notice to or approval from the Company before engaging in such Protected Conduct. Notwithstanding the foregoing, under no circumstance is the Grantee authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without prior written consent of the Company’s Chief Legal Officer. Any reporting or disclosure permitted under this Section 7 shall not result in the cancellation of the Restricted Stock. The Grantee is entitled to certain immunities from liability under state and federal law for disclosing trade secrets if the disclosure was made to report or investigate an alleged violation of law, subject to certain conditions.
8. Severability.
If any provisions of this Agreement is determined to be invalid or unenforceable for any reason, that provision shall be modified rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. If any provision in this Agreement is held to be invalid or unenforceable for any non-material reason, and cannot be modified to make it enforceable, the remaining provisions shall be construed as if the invalid or unenforceable provision had not been included. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the fullest extent possible.
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EXHIBIT B
State-Specific Modifications to Restricted Stock Agreement and
Restrictive Covenant Agreement: Applies to Individuals Who Live or Work in the Following States: California, Colorado, Minnesota, or Washington
For applicable employees or former employees, Section 18 of the Restricted Stock Agreement is modified to read as follows, “This Agreement is made under, and shall be governed by and construed in accordance with the internal substantive laws of, the State of Ohio, without giving effect to the choice of law principles thereof; provided, however, if Grantee is a resident of California, Washington, Minnesota, or Colorado, then for so long as Grantee is a resident of California, Washington, Minnesota, or Colorado, the law of Grantee’s state of residence shall apply to Exhibit A (Restrictive Covenant Agreement) to this Agreement.”
For applicable employees, or former employees, the following is added to the Restrictive Covenant Agreement:
(a) California. If Grantee resides in California, then for so long as Grantee resides in California, this Agreement shall be modified as follows:
(i)Sections 3 through 5 shall not apply after Grantee’s employment with the Company or any Subsidiary ends.
(ii)The sentences in Sections 2 through 5 requiring the Grantee to immediately return to the Company the Common Shares received in connection with any vesting of the Restricted Stock during the Look-back Period (or the pre-tax income derived from any disposition of the Common Shares during the Look-back Period) after a violation shall not apply to residents of California; however, in the event that the Company is successful in securing any temporary, preliminary, and/or permanent injunctive relief, and/or an award of damages or other judicial relief against the Grantee in connection with any breach of Sections 2 through 5, the Grantee agrees that the Company shall also be entitled to recover all remedies that may be awarded by a court of competent jurisdiction or arbitrator and any other legal or equitable relief allowed by law.
(iii)Nothing in this Agreement shall be construed to prohibit Grantee from disclosing information about unlawful acts in the workplace, such as harassment, discrimination, or any other conduct that Grantee has reason to believe is unlawful.
(b) Colorado. If Grantee resides in Colorado, then for so long as Grantee resides in Colorado, this Agreement shall be modified as follows:
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(i)If Grantee does not earn an amount of annualized cash compensation equivalent to or greater than sixty-percent of the threshold amount for highly compensated workers (or the earnings threshold in effect as adjusted annually after August 10, 2022, by the Colorado Division of Labor Standards and Statistics in the Department of Labor and Employment), then Section 3 shall not apply after Grantee’s employment with the Company or any Subsidiary ends.
(ii)If Grantee does not earn an amount of annualized cash compensation equivalent to or greater than the threshold amount for highly compensated workers (or the earnings threshold in effect as adjusted annually after August 10, 2022, by the Colorado Division of Labor Standards and Statistics in the Department of Labor and Employment), then Section 5 shall not apply after Grantee’s employment with the Company or any Subsidiary ends.
(iii)The restrictions in Section 3 shall be modified to cover only those customers or suppliers with respect to which Grantee would have been provided trade secret information during the Look-back Period. Grantee stipulates that the obligations in Sections 3 and 5 are reasonable and necessary for the protection of trade secrets within the meaning of §8-2-113(2)(b) (the “Colorado Noncompete Act”).
(iv)Grantee acknowledges that they received notice of the covenant not to compete and its terms before Grantee accepted an offer of employment, or, if a current employee at the time Grantee enters into this Agreement, at least 14 days before the earlier of the effective date of this Agreement or the effective date of any additional compensation or change in the terms or conditions of employment that provides consideration for the covenant not to compete, and under no circumstances will this Agreement go into effect until 14 days have passed since Grantee received it.
(v)In addition to the other forms of Protected Conduct, nothing in this Agreement prohibits disclosure of information that arises from the worker’s general training, knowledge, skill, or experience, whether gained on the job or otherwise, information that is readily ascertainable to the public, or information that a worker otherwise has a right to disclose as legally protected conduct. Nothing in this Agreement or a Company policy limits or prevents a worker from disclosing information about workplace health and safety practices or hazards. Further, nothing in this Agreement shall be construed to prohibit Grantee from disclosing or discussing (either orally or in writing) information about unlawful acts in the workplace, such as any alleged discriminatory or unfair employment practice.
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(c) Minnesota. If Grantee resides in Minnesota, then for so long as Grantee resides in Minnesota, this Agreement shall be modified as follows: Section 5 shall not apply after Grantee’s employment with the Company or any Subsidiary ends.
(d) Washington. If Grantee resides in Washington, then for so long as Grantee resides in Washington, this Agreement shall be modified as follows:
(i)Unless Grantee’s earnings from the Company or a Subsidiary in the prior year (or any portion thereof for which Grantee was employed), when annualized, exceeds the annual compensation provided by the Washington State Department of Labor and Industries (“Washington Earnings Threshold”), after Grantee’s employment with the Company or any Subsidiary ends, (x) Section 5 shall not apply; (y) Section 3 is modified to only prohibit solicitation by Grantee of any customer (which is a current customer) to cease or reduce the extent to which it is doing business with the Company or any Affiliated Company, in accordance with the definition of a “Non-solicitation agreement” under the Washington Act (Rev. Code of Wash. (RCW) §§49.62.005 – 900); and (z) Section 4 is modified to only prohibit solicitation by Grantee of any employee to leave their employment with the Company or any Affiliated Company, in accordance with the definition of a “Non-solicitation agreement” under the Washington Act (Rev. Code of Wash. (RCW) §§49.62.005 – 900.
(ii)Nothing in this Agreement prohibits disclosure or discussion of conduct Grantee reasonably believes to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy.
(iii)The definition of “Restricted Period” shall be modified so that it does not exceed and is capped at 18 months after the date the Grantee’s Continuous Service with the Company or any Subsidiary is terminated.
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Exhibit 31.1
RULE 13a-14(a)/15d-14(a) CERTIFICATIONS
I, Mark T. Smucker, Chief Executive Officer, President and Chair of the Board of The J. M. Smucker Company, certify that:
(1)I have reviewed this quarterly report on Form 10-Q of The J. M. Smucker Company;
(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
(4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 26, 2026
| /s/ Mark T. Smucker | ||||||||
| Name: | Mark T. Smucker | |||||||
| Title: | Chief Executive Officer, President and Chair of the Board | |||||||
Exhibit 31.2
RULE 13a-14(a)/15d-14(a) CERTIFICATIONS
I, Tucker H. Marshall, Chief Financial Officer | Executive Vice President, Frozen Handheld and Spreads and Sweet Baked Snacks of The J. M. Smucker Company, certify that:
(1)I have reviewed this quarterly report on Form 10-Q of The J. M. Smucker Company;
(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
(4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 26, 2026
| /s/ Tucker H. Marshall | ||||||||
| Name: | Tucker H. Marshall | |||||||
| Title: | Chief Financial Officer | Executive Vice President, Frozen Handheld and Spreads and Sweet Baked Snacks | |||||||
Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of The J. M. Smucker Company (the “Company”) for the quarter ended January 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
| /s/ Mark T. Smucker | ||||||||
| Name: | Mark T. Smucker | |||||||
| Title: | Chief Executive Officer, President and Chair of the Board | |||||||
| /s/ Tucker H. Marshall | ||||||||
| Name: | Tucker H. Marshall | |||||||
| Title: | Chief Financial Officer | Executive Vice President, Frozen Handheld and Spreads and Sweet Baked Snacks | |||||||
Date: February 26, 2026
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.