CAG 10-K & 10-Q changes, risk factors and insider trading

Our business is subject to various risks and uncertainties. Any of the risks and uncertainties described below could materially adversely affect our business, financial condition, and results of operations and should be considered in evaluating us. Although the risks are organized by headings and each risk is described separately, many of the risks are interrelated. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, performance, or financial condition in the future. You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.

Deterioration ofin general economic conditions, an economic recession,recession or periods of inflation,slow growth, periods of inflation or increasing interest rates, or economic uncertainty may affect consumers resulting in reductions in consumer spending and have in the past harmed and could continue to harm our business and results of operations.

Our business and results of operations have in the past been and may continue to be adversely affected by changes in national or global stability and economic conditions, including inflation,periods of inflation and rising interest rates; changingdecreased international trade, tariff, immigration,energy and tax policies; decreasedfuel availability ofcoupled capital,with volatilityincreased inoil, financialenergy markets,and fuel costs (including fuel surcharges); reduced consumer confidence and declining consumer spending rates,rates; actual or threatened hostilities or war and/or other geopolitical conflicts; declining benefits or increasedchanging limitationseligibility requirements under government food assistance programs for consumers; risingchanging unemploymentinternational trade, immigration, and tax policies; recessions; and periods of slow growth, decreased energy availability andof increasedcapital, energyvolatility costsin (includingfinancial fuelmarkets; surcharges)rising or sustained high unemployment; supply chain challenges; labor shortages; the effects of governmental initiatives to manage economic conditions; geopolitical conflicts (including as discussed in the risk factor below); and the negative impacts caused by pandemics, epidemics, and disease, in humanshumans, plants, and animals, such as the avian flu.animals.

Customer and consumer demand for our products may be impacted by heightened inflation, increased or fluctuating tariffs, increased interest rates and other weak economic conditions including recessionary conditions and credit market disruptions and volatility. Continued weak economic conditions may adversely impact consumersconsumers, causing a decrease in demand for our products from our customers and consumers.customers. Additionally, these economic conditions may adversely impact some of our customers, suppliersdistributors, suppliers, contract manufacturers, and other vendors who are highly leveragedleveraged, increasing the risk of uncollectible accounts or trade receivables, extended payment terms, and bankruptcy. We have experienced and may continue to experience negative impacts to our business ranging from an inability to collect accounts receivable to supply chain disruptions caused by failures of our counterparties to continue as a going concern due to financial and liquidity issues.

Our business, financial condition and results of operations have been impacted in the past and may be impacted in the future by disruptions in the global economy.  The global economy has been negatively impacted by geopolitical conflicts, and related supply disruptions, fuel cost increases, export controls and economic sanctions, including the recent military conflicts in the Middle East, continuing military conflict between Russia and Ukraine, conflicts in the Middle East, and risinggeopolitical tensions elsewhere including between China and Taiwan. Although we have no direct operations in Russia,Iran Ukraine,or elsewhere in the Middle East, Russia, Ukraine, China, or Taiwan, we have experienced, or may experience, shortages in materials from these regions, increased tariffs, sanctions or restrictions relating to these regions, and resulting increased costs or volatility relating to transportation, energy, fuel, and raw materials as a result of impacts from conflicts in these regions, and reduced consumer confidence and consumption due in part to the negative impact of these conflicts and tensions on the global economy. Further escalations of geopolitical tensions related to military conflicts, including increased or fluctuating trade barriers or restrictions on global trade, could also result in cyberattacks, supply or distribution disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain. In addition, the effects of the ongoing conflicts could heighten many of our known risks described in this Item 1A, Risk Factors.

Many of the components of our cost of goods sold are subject to price increases that are attributable to factors beyond our control, including global economic conditions, trade barriers or restrictions, supply chain disruptions, changes in crop size, product scarcity, demand dynamics, currency rates, water supply, weather conditions, import and export requirements, and other factors. The cost of oil, energy, fuel, raw materials, labor, manufacturing, energy, fuel, packaging materials, transportation and logistics, and other inputs related to the production and distribution of our products have increased and may continue to increase unexpectedly.

In recent years, input costs have increased materially and at a rapid rate. WhileWe weanticipate expectcontinued elevated levels of input cost inflation in fiscal 20262027, compared to fiscal 2025, partially driven by increased or fluctuating tariffs,and we could experience higher than expected input cost inflation in specific commodities or across multiple commodities.

The Company uses a variety of strategies to seek to offset this input cost inflation such as increasing productivity, cutting costs, increasing pricing, and engaging in commodity hedging. However, we may not be able to generate sufficient productivity improvements or cost reductions, timely make offsetting price increases, sustain our price increases, or effectively hedge for such inflation. Commodity price volatility may result in unfavorable commodity positions, the costs of which we may not be able to fully offset on acceptable timelines or at all. To the extent we are unable to offset present and future input cost increases including over sustained periods of elevated input cost inflation, our operating results could be materially and adversely affected.

In recent years, our industry has been impacted by supply chain disruptions, transportation issues, labor challengeschallenges, and continued changes in global economic conditions, which have impacted and couldare continuecontinuing to impact our operations and profitability. Continued inflation, rising interest rates, decreased availability of capital, volatility in financial markets, declining consumer spending rates, recessions, decreased energy availabilityavailability, and increased energy costs (including fuel surcharges) have in the past caused and couldare continuecontinuing to cause challenges for us, our suppliers, vendors, customerscustomers, and consumers of our products and may negatively impact our profitability. These supply chain disruptions have impacted our ability to source ingredients and manufacture and distribute our products, and may make it difficult for our customers to accurately forecast and plan for their purchases of our products to optimize restocking, all of which could negatively impact our business and profitability.

We continue to incur significant costs to upgradeupgrade, maintain, and maintainexpand production at various facilities, equipment, or technologies. We have committed to investing in automation, connected data, improved equipment, and artificial intelligence to upgrade our operations and increase productivity. Additionally, we have in the past, and may in the future, incur increased costs or periods of decreased production relating to upgrading facilities, equipment and technologies, transferring production among our facilities, utilizing third-party contract manufacturers, closing existing facilities, expanding existing facilities, and opening new facilities.

If the cost of our investments is higher than anticipated, the investments are not sufficient to meet our business needs, we are unable to fully utilize newnew, upgraded, or upgradedexpanded facilities, or we are unable to complete our improvement and expansion projects in a timely manner or in accordance with our specifications, we may be delayed in realizing the intended benefits or our financial performance could be negatively affected.

We sell food products for human consumption, which involves risks such as product contamination or spoilage, product tampering, other adulteration of food products such as foreign material, mislabeling, and misbranding. We may be subject to liability if the consumption of any of our products causes injury, illness, or death. In addition, we may take marketplace action such as a voluntary product recall in the event of contamination or damage.quality issues. We have issued recalls and have from time to time been and currently are involved in lawsuits relating to our food products. A significant product liability judgment or a widespread product recall may negatively impact our sales and profitability for a period of time depending on the costs of the recall, the destruction of product inventory, product availability, competitive reaction, customer reaction, and consumer attitudes.

Maintaining a good reputation is critical to selling our products. Product contamination or tampering, the failure to maintain high standards for product quality, safety, and integrity, including with respect to raw materials and ingredients obtained from suppliers, claims relating to health and wellness or allegations of product quality issues, mislabeling, or contamination, even if untrue, may reduce demand for our products or cause production and delivery disruptions. Our reputation could also be adversely impacted by any of the following, or by adverse publicity (whether or not valid) relating thereto: product recalls; claims asserted regarding the health implications of certain food products, specific ingredients, food packaging, or food production methodsmethods, including claims regarding “ultra-processed” products; the failure to maintain high ethical, social, and environmental standards or achieve stated goals for our operations and activities, including our expectations for our supply chain regarding ethical sourcing; the failure to achieve any stated goals with respect to the nutritional profile of our products; our research and development efforts; or our environmental impact, including use of agricultural materials, packaging, energy use, and waste management.

Our sales and cash flows are affected by seasonal cyclicality. For example, sales of frozen foods, including frozen vegetables and frozen complete bagged meals, tend to be marginally higher during the winter months and pie sales peak during the months of November and December due to holidays. Since many of the raw materials we process are agricultural crops, production of these products is predominantly seasonal, occurring during and immediately following the purchase of such crops. For these reasons, sequential quarterly comparisons are not a good indication of our performance or how we may perform in the future. If we are unable to obtain access to working capital when needed or if seasonal fluctuations are greater than anticipated, there could be a material adverse effect on our financial condition, results of operations, or cash flows.

As of May 25,31, 2025,2026, we had total debt of approximately $8.07$7.27 billion, including approximately $7.02 billion aggregate principal amount of outstanding senior notes.unsecured notes, of which $762.5 million aggregate principal amount is maturing in October 2026. Our ability to make payments on our debt, fund our other liquidity needs, make planned capital expenditures, and return cash to stockholders will depend on our ability to generate cash in the future. Our historical financial results have been, and we anticipate that our future financial results will be, subject to fluctuations. Our ability to generate cash, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. We cannot guarantee that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs, make planned capital expenditures, or return cash to stockholders.

Consumer preferences evolve over time and the success of our food products depends on our ability to identify the priorities, tastes and dietary habits of consumers and to offer products that appeal to theirthese preferences. Consumer response to our products may be influenced by a growing number and complexity of factors (as well as media, social media, and regulatory activity impacting such factors), including taste, nutrition, pack and portion sizes, and concerns of consumers regarding broader health and wellness perceptions, obesity, product attributes, ingredients, food production methods, sourcing of packaging materials, use of organic or natural ingredients, human rights impacts, environmental impacts, recyclability of packaging and local sourcing of ingredients. GrowingContinued focus on wellness and growing use of weight loss medication has caused, and may causecontinue to cause, shifts in consumer preferences and, if we fail to anticipate and appropriately respond to customer preferences, may impact our product sales, financial condition, and operating results.

Introduction of new products and product extensions including variations of pack and portion sizes requires significant development and marketing investment. If our products fail to meet changing consumer preferences or habits or are not perceived by consumers as delivering value, or if we fail to introduce new and improved products or fail to offer alternative pack and portion size offerings on a timely basis, then the return on that investment will be less than anticipated and our strategy to grow sales and profits with investments in acquisitions, marketing, and innovation will be less successful. Similarly, demand for our products could be affected by consumer concerns or perceptions regarding the health effects of, and changes in regulatory restrictions on, certain packaging materials (such as per- and polyfluoroalkyl substances commonly referred to as PFAS), food production methods, ingredients such as colors or preservatives, sodium, trans fats, sugar, genetically modified ingredients, or other product attributes. New or changing limitations on inclusion of our products under government food assistance programs for consumers may also negatively impact demand for our products.

During fiscal 2025,2026, our 10 largest customers accounted for approximately 60% of our consolidated net sales, with our largest customer, Walmart, Inc. and its affiliates, accountedaccounting for approximately 29% of our consolidated net sales. There can be no assurance that Walmart, Inc. and other significant customers will continue to purchase our products in the same quantities or on the same terms as in the past, particularly as increasingly powerful retailers continue to demand lower pricing. The loss of a significant customer or a material reduction in sales to a significant customer could materially and adversely affect our product sales, financial condition, and results of operations.

Our customers are generally not contractually obligated to purchase from us and their decision to purchase from us is driven by multiple factorsfactors, including consumer preferences and demand, price, product quality, customer service performance, availability, and other factors. Strategic and financial goals of our customers can impact their purchasing decisionsdecisions, including store space allocation among product categories and shelf placement of our products.

DisruptionDisruptions ofto our supply chain hashave had and could continue to have an adverse impact on our business, financial condition, and results of operations.

Although most of our products are manufactured in North America and we source the significant majority of our ingredients and raw materials from North America, global supply has at times been and may continue to be  constrained, which has caused and may continue to  cause the price of certain ingredients and raw materials used in our products to increase and/or we may experience disruptions to our operations. Additionally, although we have no direct operations in Russia,Iran Ukraine,or elsewhere in the Middle East, Russia, Ukraine, China, or Taiwan, we have experienced, orand may again experience, shortages in materials from these regions, increased tariffs, sanctions or restrictions relating to these areas, and increased costs or volatility relating to transportation, energy, and raw materials impacted by these regions, and reduced consumer confidence and consumption in these regions due in part to the negative impact of military conflicts and rising tensions in these areas on the global economy. To date, these conflicts have not had a material impact on our business, financial condition, or results of operations, but continued geopolitical turmoil may negatively impact our supply chain and our ability to manufacture or sell our products.

Our businesses periodically enter into contract manufacturing arrangements with third-party manufacturers of products. The terms of these agreements vary. Although many agreements are for a relatively short period of time, some of theour contract manufacturing agreements are for extended periods. Volumes produced under each of these agreements can fluctuate significantly based upon the product’s life cycle, product promotions, alternative production capacity, and other factors, none of which are under our direct control. Our future ability to enter intointo, maintain or maintainexpand these contract manufacturing arrangements is not guaranteed, and an inability for the Company to obtain favorable contract manufacturing pricing or sufficient contract manufacturing availability or production capacity could have a significant negative impact on sales volume.

As part of a concerted effort to achieve cost savings and efficiencies, we have entered into agreements with third-party service providers under which we have outsourced certain information systems, sales, finance, accounting, and other functions, and we may enter into managed services agreements with respect to other functions in the future. If any of these third-party service providers do not perform according to the terms of the agreements, or if we fail to adequately monitor their performance, including their use of new artificial intelligenceAI technologies, we may not be able to achieve the expected cost savings or we may have to incur additional costs to correct errors made by such service providers, and our reputation could be harmed. Depending on the function involved, such errors may also lead to business interruption, damage or disruption of information technology systems, processing inefficiencies, the loss of or damage to intellectual property or non-public company sensitive information, effects on financial reporting, litigation or remediation costs, or damage to our reputation, any of which could have a material adverse effect on our business.

In the past, we have been impacted by cyber breaches experienced by third parties in our supply chain. If any of our third-party service providers or any other third parties in our supply chain experience a cyber breach or system failure, their businesses may be negatively impacted, which can disrupt our end-to-end supply chain or affect our ability to fulfill customer orders, both of which could have a material adverse effect on our business. For example, in the fourth quarter of fiscal 2023, we incurred charges totaling $4.4 million ($3.3 million after-tax) related to supply chain disruptions caused by a third-party vendor’s system shutdown in connection with the third party experiencing a cybersecurity incident. The vendor’s shut-down disrupted our operations and negatively impacted our ability to fulfill customer orders.

WeNew and changing extended producer responsibility (EPR) laws and regulations that recently have been, and are being, implemented in the United States and Canada may increase our costs or require us to contribute funding to support recycling and waste processing infrastructure by making manufacturers, like Conagra, responsible for the cost of disposal of food packaging after consumer use. These EPR laws and regulations also may require us to use more post-consumer recycled material in our packaging or switch to other types of packaging to meet future recyclability requirements, which may further increase our costs. Additionally, we may suffer losses if changes to regulations require us to change the ingredients we use or how we process, package, transport, store, distribute, advertise, or label our products or include changes that increase our risk of liability for deceptive advertising. Moreover, depending on the implementation of such regulatory changes, we could have increased risk for a product recall or have existing inventory become unsellable, which could materially and adversely impact our product sales, financial condition and operating results.

In addition, changes in applicableother laws and regulations, including changes in taxation requirements and new or increased tariffs on products imported from certain countries, may lead to increased costs and could negatively affect our business, financial condition, and results of operations.

Our operations are also subject to extensive and increasingly stringent regulations administered by the Environmental Protection Agency and similar state, local, and foreign government agencies, which pertain to the discharge of materials into the environment and the handling and disposition of wastes.waste. Failure to comply with these regulations can have serious consequences, including civil and administrative penalties and negative publicity. Changes in applicable laws or regulations or evolving interpretations thereof, including increased government regulations to limit carbon dioxide and other greenhouse gas emissions as a result of concern over climate change, may result in increased compliance costs, capital expenditures, and other financial obligations for us, which could affect our profitability or impede the production or distribution of our products, and affect our net operating revenues.

We may also be subjected to decreased availability or less favorable pricing for water as a result of such change, which could impact our manufacturing and distribution operations. In addition, natural disasters and extreme weather conditions may disrupt the productivity of our facilities or the operation of our supply chain. The increasingContinued concern over climate change also may result in moreadditional regional, federal, and/or global legal and regulatory requirements including changes to energy policies, increased mandatory disclosure,disclosure obligations, and carbon pricing regulations or carbon taxes. In the event thatIf such additional regulations are enacted and are more aggressive than theour climate risk mitigation measures that we are currently undertaking to monitor our emissions and improve our energy efficiency,measures, we may experience significant increases in our costs of operation and delivery.delivery, In particular,including, increasing regulation of fuel emissions could substantially increase the distribution and supply chain costs associated with our products. As a result, climate change could negatively affect our business and operations.emissions.

From time to time, we establish strategies and expectations related to climate change and other environmental matters. Our ability to achieve any such strategies or expectations is subject to numerous factors and conditions, many of which areconditions outside of our control.control, Examples of such factors includeincluding evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and thecosts, availability of requisite financing, market trends that may alter business opportunities, thetrends, conduct of third-party manufacturers and suppliers, supply chain constraint or disruptions to our supply chain,disruptions, and changes in carbon markets or carbon taxes.  We may be required to expend significant resources to achieve these strategies and expectations, which could significantly increase our operational costs.expectations. There can be no assurance of the extent to which any of our strategies or expectations will be achieved, or that any future investments we make will meet stakeholder expectations.  Failures or delays (whether actual or perceived) in achieving our strategies or expectations related to climate change and other environmental matters could adversely affect our business, operations, and reputation, and increase risk of litigation.

Cybersecurity andCybersecurity, Information Technology Risks, and AI-Related Risks

We rely on information technology networks and systems, including the Internet, to process, transmit, and store information, to manage and support a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements. Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, employee error or malfeasance, security breaches, computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing, social engineering, hacking, and other cyberattacks. Additionally, the increaseincreased inregularity hybrid working whereof employees, including third-party employees, accessaccessing technology infrastructure remotely may create additional information technology and data security risks.

If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and associated automated and manual control processes, including related to new artificial intelligenceAI technologies, we could be subject to billing, payment, and collection errors, business disruptions, or damage resulting from security breaches. Failure to implement new technologies could result in lower productivity and higher costs. If any of our significant information technology systems suffer severe damage, disruption, or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, and results of operations may be materially and adversely affected, and we could experience delays in reporting our financial results. In addition, there is a risk of business interruption, violation of data privacy laws and regulations, litigation, and reputational damage from leakage of confidential information. Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts that may have a material adverse effect on our business.

Sophisticated cybersecurity threats pose a potential risk to the security and viability of our information technology systems, as well as the confidentiality, integrity, and availability of the data stored on those systems, including cloud-based platforms. In addition, new technology that could result in greater operational efficiency may further expose our computer systems to the risk of cyberattacks. Our initiatives to continue to modernize our operations, adopt new technology to increase efficiency, and increase data digitalization and improve connectively of our production facilities may increase our potential exposure to cybersecurity risks and add additional complexity to our cybersecurity program. Similarly, rapid development and increased adoption of artificial intelligence technology may create the need for rapid modifications to our cybersecurity program and increase our cybersecurity risks. Additionally, the technology and techniques used in cyberattacks are constantly evolving and the pace and extent of that evolution may accelerate with the use of emerging technologies including artificial intelligence.

Additionally, we regularly move data across national borders to conduct our operations and, consequently, are subject to a variety of laws and regulations in the United States and other jurisdictions regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personal data, including the European Union General Data Protection Regulation, the California Privacy Rights Act, and similar laws in other countries, states and jurisdictions. Our efforts to comply with privacy and data protection laws may impose significant costs and challenges that are likely to increase over time.

We compete with other companies both within and outside of our industry for talented personnel. We continue to experience increased competition for talent and at times, in recent years, have experienced periods of increased employee turnover. We could experience shortages of employees with specialized skills, such as skills in emerging technologies including artificial intelligenceAI and data analytics, especially emerging technology enabling us to formulate our business strategies based on consumer insights. If we do not successfully compete for the best talent, our business activities may be adversely affected.

As of May 25,31, 2025,2026, we had goodwill of $10.50$8.12 billion and other intangibles of $2.42$1.83 billion. The net carrying value of goodwill represents the fair value of acquired businesses in excess of identifiable assets and liabilities as of the acquisition date (or subsequent impairment date, if applicable). The net carrying value of other intangibles represents the fair value of trademarks, customer relationships, and other acquired intangibles as of the acquisition date (or subsequent impairment date, if applicable), net of accumulated amortization. Goodwill and other acquired intangibles expected to contribute indefinitely to our cash flows are not amortized, but must be evaluated by management at least annually for impairment. Amortized intangible assets are evaluated for impairment whenever events or changes in circumstance indicate that the carrying amounts of these assets may not be recoverable. Impairments to goodwill and other intangible assets may be caused by multiple factors including increasing competitive pressures, reduced demand for our products, sustained stock price decline, disruption in our operations as a result of internal and external events including disruptions involving contract manufacturing arrangements, declining consumer sentiment, macroeconomic uncertainties, lower than expected revenue and profit growth rates, changes in industry earnings before interest, taxes, depreciation and amortization multiples, changes in discount rates based on changes in cost of capital (interest rates, etc.), or the bankruptcy of a significant customer. Any impairment to goodwill or other intangible assets could negatively impact our net worth.worth and results of operations.

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include: risks associated with general economic and industry conditions, including inflation, oil, energy and fuel costs, reduced consumer confidence and spending, increased tariffs and taxes, actual or threatened hostilities or war and/or other geopolitical conflicts, declining benefits or increasedchanging limitationseligibility requirements under government food assistance programs for consumers, rising unemployment, recessions, increased energy costs, supply chain challenges, increased tariffs and taxes, labor cost increases or shortages, interest rate and currency rate fluctuations, actual or threatened hostilities or war, and or other geopolitical conflictsfluctuations; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, healthpandemics, pandemicsepidemics, or outbreaks ofand disease, orin otherhumans, geopoliticalplants, uncertaintyand animals; disruptions or inefficiencies in our supply chain and/or operations; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to the Company’s competitive environment, cost structure, and related market conditions; risks related to our ability to respond to changing consumer preferencespreferences, including health and wellness perceptions and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the seasonality of our business; risks associated with our contract manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations includingdesigned to address climate change; risks related to the Company’s ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon pricing or carbon taxes; risks related to a material failure in or breach of our or our vendors’ information technology systems and other cybersecurity incidents; risks related to our ability to identify, attract, hire, train, retain and develop qualified personnel; risk of increased pension, labor or people-related expenses; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks relating to our ability to protect our intellectual property rights; risks relating to acquisition, divestiture, joint venture or investment activities; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the U.S. Securities and Exchange Commission (the “SEC”). We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law.

Net sales for fiscal 20252026 in our Refrigerated & Frozen segment included a decrease in organic price/mix of 3.5%1.0% and an increase in organic volume of 0.3% compared to fiscal 2024,2025. primarilyThe attributableinclusion toof an additional week of results in fiscal 2026 accounted for 1.8% of an increase in strategicnet tradesales investments. Volume decreased by 0.7%when compared to fiscal 2024.2025. DuringFiscal fiscal2026 2025,and the2025 largestincluded impact$4.9 million and $76.8 million, respectively, of net sales related to our volumesfrozen fish business, which was asold resultin the first quarter of supplyfiscal constraints impacting the company’s frozen meals containing chicken and frozen vegetable products.2026. Additionally, we estimate that net sales during fiscal 2025 were impacted by approximately $24 million due to temporary manufacturing disruptions in our Hebrew National® business during the key grilling season.

Net sales for fiscal 20252026 in our International segment reflected a 5.7%4.2% decrease in organic volume, a 3.2% increase due to unfavorablefavorable foreign exchange rates, and a 3.9%1.7% increase in organic price/mix, and a 3.4% decrease in organic volume, in each case compared to fiscal 2024.2025. The unfavorablefavorable foreign exchange rates were primarily due to the devaluationstrength of the US dollar relative to the Mexican Peso relativein comparison to the USprior dollar.year. The inclusion of an additional week of results in fiscal 2026 accounted for 1.9% of an increase in net sales when compared to fiscal 2025. Fiscal 20252026 and 20242025 included $1.1 million and $43.1 million, respectively, of net sales related to our Chef Boyardee® business. In addition, fiscal 2025 included $23.6 million and $93.2 million, respectively, of net sales related to our ownership stake in Agro Tech Foods Limited (“ATFL”), which was sold in the first quarter of fiscal 2025.

Net sales for fiscal 20252026 in our Foodservice segment included aan decreaseincrease in organic volumeprice/mix of 8.1%3.6% compared to fiscal 2024,2025, drivenprimarily due to inflation justified pricing actions. Organic volume decreased by the ongoing softness in restaurant traffic and the impact of lost business from the prior year. Organic price/mix increased by 3.3%2.2% compared to fiscal 2024,2025, reflecting inflation-drivensoft pricing.but generally stable trends in commercial traffic. The inclusion of an additional week of results in fiscal 2026 accounted for 2.0% of an increase in net sales when compared to fiscal 2025. Fiscal 2025 included $16.2 million of net sales related to our Chef Boyardee® and frozen fish businesses. Additionally, we estimate that net sales in our Foodservice segment during fiscal 2025 were impacted by approximately $3 million due to the temporary manufacturing disruptions in our Hebrew National® business.

SG&A expenses totaled $1.54$1.44 billion for fiscal 2025,2026, ana increasedecrease of $49.8$97.9 million compared to fiscal 2024.2025. SG&A expenses for fiscal 20252026 reflected the following:

Segment operating profit in our Grocery & Snacks segment for fiscal 20252026 reflected a decrease in gross profitsprofit of $86.6$125.6 million compared to fiscal 2024.2025. The decrease in gross profit was driven by the decrease in net sales discussed above, the impacts of input cost inflation, and unfavorable operating leverage, and a reduction in profit associated with the sale of our Chef Boyardee® business, partially offset by the inclusion of the 53rd week of our current fiscal year and productivity. In addition, we recognized a benefit of $11.3 million and $14.4 million in fiscal 2025 and 2024, respectively, related to insurance proceeds for lost sales from our fiscal 2023 brand recall on Armour Star®. TheSegment decreaseoperating in gross profitsprofit was partiallyalso offsetimpacted by lowerhigher SG&A expenses compared to fiscal 2024.2025.

Segment operating profit in our Refrigerated & Frozen segment for fiscal 20252026 reflected a decrease in gross profitsprofit of $211.3$133.6 million compared to fiscal 2024.2025. The decrease was driven by the net sales decline discussed above, impacts of lower organic net sales, input cost inflation, and unfavorable operating leverage, and a reduction in profit associated with the sale of our frozen fish business, partially offset by productivity.the Ininclusion of the 53rd week of our current fiscal 2025, we also experienced manufacturing challenges at the primary facility that preparesyear and cooks chicken used in our frozen meals. This resulted in increased product costs from utilizing third-party manufacturers, as well as abnormal inventory costs while we temporarily stopped production.productivity. In addition, we estimate that gross profits during fiscal 2025 were negatively impacted by approximately $10 million, primarily due to lost profits, abnormal manufacturing variances, and certain inventory write-offs resulting from the temporary manufacturing disruptions in our Hebrew National® business. TheSegment decreaseoperating in gross profitsprofit was partiallyalso offsetimpacted by lowerhigher SG&A expenses compared to fiscal 2024,2025, which included aan decreaseincrease of $20.9$15.5 million in advertising and promotion expenses.

Segment operating profit in our FoodserviceInternational segment for fiscal 20252026 reflected a decrease in gross profitsprofit of $19.1$11.5 million compared to fiscal 2024.2025. The decrease in gross profits was driven by the organic net sales declinesdecline discussed above, the impacts of input cost inflation, and unfavorable operating leverage, and a reduction in profit associated with the sale of our ownership stake in ATFL, partially offset by productivity.the inclusion of the 53rd week of our current fiscal year, productivity, and favorable foreign exchange rates.

In fiscal 2025,2026, pension and postretirement non-service income was $25.9$45.9 million, an increase of $15.6$20.0 million compared to fiscal 2024.2025. Fiscal 20252026 reflected lower interest costs andas a non-cash settlement gainresult of $13.0 million associated with athe partial transfer of our U.S. defined benefit pension plan obligation to a third-party insurance provider through the purchase of an annuity contract.contract in the fourth quarter of fiscal 2025. Fiscal 20242025 included a non-cash settlement gain of $13.0 million associated with the partial transfer. In addition, fiscal 2026 included a net benefit of $11.5$22.5 million primarily related primarily to our annualyear-end remeasurement of ancertain hourly pension plan liability.liabilities.

We include our share of the earnings of certain affiliates based on our economic ownership interest in the affiliates. Our most significant affiliate is the Ardent Mills joint venture. Our share of earnings from our equity method investment earnings were $182.4$140.7 million and $177.6$182.4 million for fiscal 20252026 and 2024,2025, respectively. Ardent Mills earnings for fiscal 20252026 reflected improvedlower commodity revenue,trading partially offset by continued lower volume trends as seen throughout the industry.revenue. Results for fiscal 2026 and 2025 included net charges of $9.6 million and $7.2 millionmillion, respectively, primarily related to Ardent Mills restructuring activities.

Our income tax expense was $3.7$91.8 million and $262.5$3.7 million in fiscal 20252026 and 2024,2025, respectively. The decrease in our income tax expense was principally related to a release of a valuation allowance from a federal audit settlement that gave rise to a $225.8 million tax benefit in fiscal 2025. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income,income (loss), inclusive of equity method investment earnings) was approximately 0.3%(5.0)% and 43.0%0.3% for fiscal 20252026 and 2024,2025, respectively. See Note 14, “Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for a further discussion on the change in effective tax rates.

Earnings (Loss) Per Share

Diluted loss per share in fiscal 2026 was $4.00 and diluted earnings per share in fiscal 2025 and 2024 were $2.40 and $0.72, respectively.$2.40. The increasedecrease in diluted earnings per share reflected higherlower net income. See “Items Impacting Comparability” above as several significant items affected the comparability of year-over-year results of operations.

At May 25,31, 2025,2026, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $2.0 billion (subject to increase to a maximum aggregate principal amount of $2.5 billion with the consent of the lenders). The Revolving Credit Facility terminated and replaced our prior revolving credit facility in the first quarter of fiscal 2026. The Revolving Credit Facility matures on AugustJune 26,27, 20272030 and is unsecured. The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of May 25,31, 2025,2026, there were no outstanding borrowings under the Revolving Credit Facility. On June 27, 2025, subsequent to our fiscal year end, we terminated and replaced our existing revolving credit facility by entering into an amendment which extends the maturity date to June 27, 2030.

We had $259.0 millionno outstanding borrowings under our commercial paper program as of May 25,31, 20252026 and $586.0$259.0 million outstanding as of May 26,25, 2024.2025. The highest level of borrowings during fiscal 20252026 was $1.0$642.0 billion.million.

During the second quarter of fiscal 2025,2026, we repaid the remainingentire $250.0$1.0 millionbillion aggregate principal amount outstandingof under4.60% oursenior unsecured Termnotes Loanon Agreement, dated August 26, 2023 (the “2023maturity Termdate Loan”).of TheNovember repayment1, was2025, primarilyusing fundedremaining byproceeds operatingfrom the Senior Unsecured Notes, cash flows.on hand, and the issuance of commercial paper.

We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt at maturity or otherwise, from operating cash flows, our commercial paper program, access to the capital markets, and our Revolving Credit Facility. We have $1.0$500.0 billionmillion aggregate principal amount of 4.6%5.3% senior unsecured notes and $262.5 million aggregate principal amount of 7.125% senior unsecured notes maturing in NovemberOctober 20252026 that we expect to pay and/or refinance using available sources which may include the investment grade note market, bank loans, commercial paper, and cash on hand. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at all.

On AprilMarch 2,31, 2025,2026, we announced that our Board had authorized a quarterly dividend payment of $0.35 per share, which was paid on MayJune 29,3, 2025,2026, to stockholders of record as of the close of business on April 28,30, 2025.2026. Subsequent to our fiscal year end, on July 9,15, 2025,2026, we announced that our Board had authorized a quarterly dividend of $0.35$0.175 per share to be paid on AugustSeptember 28,2, 20252026 to stockholders of record as of the close of business on July 30, 2025.2026.

In fiscal 2025,2026, we usedgenerated $11.0$150.0 million of cash, which was the net result of $1.69$1.40 billion generated from operating activities, $542.2$262.6 million usedgenerated infrom investing activities, $1.16$1.52 billion used in financing activities, and aan decreaseincrease of $2.4$1.4 million due to the effects of changes in foreign currency exchange rates.

Cash generated from operating activities totaled $1.69$1.40 billion in fiscal 2025,2026, as compared to $2.02$1.69 billion generated in fiscal 2024.2025. The decrease in operating cash flows for fiscal 20252026 compared to fiscal 20242025 was primarily driven by lower operating profits, lower dividend payments received from one of our equity method investments,profits and higher inventory balances. These decreases were partially offset by the accelerated receipt of our outstanding receivables initiated in exchangethe forsecond aquarter slightlyof higherfiscal prompt2025, paypartially discount, which increased our cash flow from operationsoffset by approximatelyfavorable $140inventory million. Operating cash flows in fiscal 2025 also benefited from lower tax payments as a result of lower taxable income and recent interactions with the U.S. Internal Revenue Service (“IRS”) allowing for additional tax deductions.management.

Cash usedgenerated in investing activities totaled $542.2$262.6 million in fiscal 20252026 compared to $375.0$542.2 million cash used in fiscal 2024.2025. Investing activities in fiscal 2026 consisted primarily of proceeds totaling $648.9 million from the sale of our Chef Boyardee® and frozen fish businesses, which were partially offset by capital expenditures totaling $423.4 million. Investing activities in fiscal 2025 consisted primarily of capital expenditures totaling $389.3 million,million and the purchases of an existing contract manufacturer and Sweetwood Smoke & Co. for a total of $230.6 million, net of cash acquired, which were partially offset by net proceeds totaling $76.8 million from the sale of our ownership stake in ATFL. Investing activities in fiscal 2024 consisted primarily of capital expenditures totaling $388.1 million.

Cash used in financing activities totaled $1.52 billion in fiscal 2026 compared to $1.16 billion in fiscal 20252025. comparedFinancing to $1.66 billionactivities in fiscal 2024.2026 principally reflected repayments of long-term debt of $1.03 billion, the issuance of long-term debt totaling $1.0 billion, net short-term borrowing repayments of $770.5 million, cash dividends paid of $669.7 million, and common stock repurchases of $15.3 million. Financing activities in fiscal 2025 principally reflected repayments of long-term debt of $281.3 million, net short-term borrowing repayments of $125.6 million, cash dividends paid of $669.2 million, and common stock repurchases of $64.0 million. Financing activities in fiscal 2024 principally reflected repayments of long-term debt of $1.77 billion, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $290.6 million, and cash dividends paid of $659.3 million.

We recognized a pension benefit from Company plans of $19.6$37.4 million, $0.6$19.6 million, and $13.9$0.6 million in fiscal 2026, 2025, 2024, and 2023,2024, respectively. Such amounts reflect the year-end write-off of actuarial losses (gains) in excess of 10% of our pension liability of $(3.525.2) million, $(12.53.5) million, and $0.1$(12.5) million in fiscal 2026, 2025, 2024, and 2023,2024, respectively. This also reflected expected returns on plan assets of $146.3$109.6 million, $141.3$146.3 million, and $145.9$141.3 million in fiscal 2026, 2025, 2024, and 2023,2024, respectively. We contributed $11.9$11.4 million, $12.2$11.9 million, and $12.5$12.2 million to our pension plans in fiscal 2026, 2025, 2024, and 2023,2024, respectively. We anticipate contributing approximately $11.0$10.3 million to our pension plans in fiscal 2026.2027.

As of May 31, 2026, we have goodwill of $8.12 billion, indefinite-lived intangibles of $1.25 billion and definite-lived intangibles of $577.4 million. Historically, we have experienced material impairments in brand intangibles and goodwill as a result of declining sales, reductions to our assumed royalty rates due to lower-than-expected profit margins, and other economic conditions such as increases to interest rates. In fiscal 2025,2026, 2024,we recorded goodwill impairments of $2.38 billion in our Refrigerated & Frozen reporting unit. The remaining carrying value in our Refrigerated & Frozen reporting unit was approximately $4.7 billion as of May 31, 2026. This was the only reporting unit with 10% or less excess fair value over carrying value as of that date. For our Refrigerated & Frozen reporting unit, we selected a discount rate of 11.0% and 2023,a long-term growth rate of 1.5% In fiscal 2026, 2025, and 2024, we recorded total indefinite-lived intangibles impairments of $72.1$547.2 million, $430.2$72.1 million, and $589.2$430.2 million, respectively, primarily related to brands acquired as part of the Pinnacle acquisition that were recorded at fair value in fiscal 2019. We continue to be susceptible to impairment charges in the future if our long-term sales forecasts, royalty rates, and other assumptions change as a result of lower than expected performance or other economic conditions. We will monitor these assumptions as management continues to achieve gross margin improvement and long-term sales growth. Discount rates, long-term growth rates, and royalty rates used to estimate the fair value of our domestic retail brands with 10% or less excess fair value over carrying amount as of the fiscal 20252026 annual impairment test were as follows:

If we had changed the assumptions used to estimate the fair value of our reporting unit and brands with 10% or less excess fair value over carrying amount as of the fiscal 20252026 annual impairment test, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of this reporting unit and certain brands (in millions):

A discussion of our risk factors can be found in Item 1A, “Risk Factors”, in our Annual Report on Form 10-K for the fiscal year ended May 25,31, 20252026 and in our other filings with the SEC. During the thirdfirst quarter of fiscal 2026,2027, there were no material changes to our previously disclosed risk factors.

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include: risks associated with general economic and industry conditions, including inflation, oil, energy and fuel costs, reduced consumer confidence and spending, increased tariffs and taxes, increased energy and fuel costs, actual or threatened hostilities or war,war and /or other geopolitical conflicts, declining benefits or increasedchanging limitationseligibility requirements under government food assistance programs for consumers, rising unemployment, recessions, supply chain challenges, labor cost increases or shortages, interest rate and currency rate fluctuations; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, healthpandemics, pandemicsepidemics, or outbreaks ofand disease, orin otherhumans, geopoliticalplants, uncertaintyand animals; disruptions or inefficiencies in our supply chain and/or operations; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to the Company’s competitive environment, cost structure, and related market conditions; risks related to our ability to respond to changing consumer preferencespreferences, including health and wellness perceptions and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the seasonality of our business; risks associated with our contract manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations includingdesigned to address climate change; risks related to the Company’s ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon pricing or carbon taxes; risks related to a material failure in or breach of our or our vendors’ information technology systems and other cybersecurity incidents; risks related to our ability to identify, attract, hire, train, retain and develop qualified personnel; risk of increased pension, labor or people-related expenses; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks relating to our ability to protect our intellectual property rights; risks relating to acquisition, divestiture, joint venture or investment activities; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the U.S. Securities and Exchange Commission (the “SEC”). We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law.

The discussion that follows should be read together with the unaudited Condensed Consolidated Financial Statements and related notes contained in this report and with the financial statements, related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended May 25,31, 20252026 and subsequent filings with the SEC. Results for the thirdfirst quarter of fiscal 20262027 are not necessarily indicative of results that may be attained in the future.

Our industry continues to be impacted by persistent weak consumer sentiment, inflation, commodity cost fluctuations, labor cost inflation, input cost inflation, supply chain pressures, exchangetrade rateand volatility,regulatory uncertainty, and other global macroeconomic challenges. In the thirdfirst quarter of fiscal 2026,2027, we continuedexperienced toincreased experienceoil anprices elevatedand amounthigher oflogistics inputand costfuel inflation,costs, which we were able to partially offset throughby certain commodity price decreases and tariff refunds, our on-going productivity initiativesinitiatives, and targeted pricing actions.

We expect to have implemented additional targeted price increases to help offset input cost inflation by the end of the first half of fiscal 2027. Throughout fiscal 2027, continued volatilityconsumer insensitivity to price increases may negatively impact our costs of goods sold as a result of inflation and changes to trade policies in fiscal 2026. While we expect consumer trends to improve over time, we also expect persistent weak consumer sentiment to drive value seeking behaviors, negatively impacting our volumes during fiscal 2026.volumes. We continue to evaluate the evolving macroeconomic environment and take action to mitigate negative impacts on our business, consolidated results of operations, and financial condition. For example, we have increased advertising and promotion investment to drive category and brand awareness.

Segment presentation of gains and losses from derivatives used for economic hedging of anticipated commodity input costs and foreign currency exchange rate risks of anticipated transactions is discussed in further detail in Note 8,7, “Derivative Financial Instruments”, to the Condensed Consolidated Financial Statements contained in this report. We had $2.7$5.2 million and $7.7 million of derivative gains in the third quarter of fiscal 2026 and 2025, respectively, and $0.9$2.2 million of derivative losses and $17.3 million of derivative gains in the first three quartersquarter of fiscal 20262027 and 2025,2026, respectively, which were included in general corporate expenses and reflected as items impacting comparability.

Other items of note impacting comparability for the thirdfirst quarter of fiscal 20262027 included the following:

Items of note impacting comparability for the thirdfirst quarter of fiscal 20252026 included the following:

SG&A expenses totaled $377.6$350.3 million for the thirdfirst quarter of fiscal 2026,2027, aan decreaseincrease of $66.1$14.7 million, as compared to the thirdfirst quarter of fiscal 2025.2026. SG&A expenses for the thirdfirst quarter of fiscal 20262027 reflected the following:

Other changes in expenses compared to the thirdfirst quarter of fiscal 20252026

SG&A expenses for the thirdfirst quarter of fiscal 20252026 included the following items impacting comparability of earnings:

Segment operating profit in our InternationalGrocery & Snacks segment for the thirdfirst quarter and first three quarters of fiscal 20262027 reflected a decrease in gross profits of $1.4$13.1 million and $14.6 million, respectively, when compared to the thirdfirst quarter and first three quarters of fiscal 2025.2026. The decrease in gross profits was driven by the decrease inlower organic net sales discussed above,sales, the negative impacts of input cost inflation, and aunfavorable reductionoperating in profit associated with the sale of our ownership stake in ATFL,leverage, partially offset by productivity. The decrease in grossoperating profitsprofit for the thirdfirst quarter and first three quarters of fiscal 20262027 wasincluded partiallyan offset by favorable foreign exchange rates and the first three quartersincrease of fiscal 2026 was partially offset by a decrease in SG&A expenses, including a decrease of $3.8$2.1 million in advertising and promotion expenses.

Segment operating profit in our FoodserviceRefrigerated & Frozen segment for the thirdfirst quarter and first three quarters of fiscal 20262027 reflected a decrease in gross profits of $1.8$15.5 million and $12.1 million, respectively, when compared to the thirdfirst quarter and first three quarters of fiscal 2025.2026. The decrease in gross profit was driven by lower organic net sales, the negative impacts of input cost inflationinflation, and aunfavorable reductionoperating in profit from divested businesses,leverage, partially offset by higherproductivity. organicThe netdecrease salesin operating profit for the first quarter of fiscal 2027 included an increase of $2.8 million in advertising and productivity.promotion expenses.

Net interest expense was $93.1$91.8 million and $100.9 million for the third quarter of fiscal 2026 and 2025, respectively. Net interest expense was $282.9 million and $314.9$93.8 million for the first three quartersquarter of fiscal 20262027 and 2025,2026, respectively. The decrease was driven by an overall reduction of our debt balances. See Note 5,4, “Debt and Revolving Credit Facility”, to the Condensed Consolidated Financial Statements contained in this report for further discussion.

In the thirdfirst quarter of fiscal 20262027 and 2025,2026, we recognized income tax expense of $29.8$58.6 million and $43.9 million, respectively. In the first three quarters of fiscal 2026 and 2025, we recognized income tax expense of $162.7 million and an income tax benefit of $33.5$124.6 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income (loss),income, inclusive of equity method investment earnings) was approximately 13.0%25.2% and 23.3%43.1% for the thirdfirst quarter of fiscal 20262027 and 2025, respectively. The effective tax rate was approximately (119.2)% and (3.9)% for the first three quarters of fiscal 2026 and 2025,2026, respectively. See Note 12,11, “Income Taxes”, to the Condensed Consolidated Financial Statements contained in this report for a discussion on the change in effective tax rates.

Diluted earnings per share in the thirdfirst quarter of fiscal 2026 was $0.422027 and diluted loss per share in the first three quarters of fiscal 2026 waswere $0.63. Diluted earnings per share in the third quarter$0.36 and first three quarters of fiscal 2025 were $0.30 and $1.87,$0.34, respectively. The increase in the thirdfirst quarter of fiscal 20262027 reflected higher net income and the decrease in the first three quarters of fiscal 2026 reflected lower net income. See “Items Impacting Comparability” above as several items affected the comparability of year-over-year results of operations.

At FebruaryAugust 22,30, 2026, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $2.0 billion (subject to increase to a maximum aggregate principal amount of $2.5 billion with the consent of the lenders). The Revolving Credit Facility terminated and replaced our prior revolving credit facility in the first quarter of fiscal 2026. The Revolving Credit Facility matures on June 27, 2030 and is unsecured. The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of FebruaryAugust 22,30, 2026, there were no outstanding borrowings under the Revolving Credit Facility.

As of FebruaryAugust 22,30, 2026 and May 31, 2026, we had $63.0 millionno outstanding borrowings under our commercial paper program. The highest level of borrowings outstanding during the first three quartersquarter of fiscal 20262027 was $642.0$306.0 million. We had $259.0 million outstanding under our commercial paper program as of May 25, 2025.

For additional information on our debt transactions, refer to Note 5,4, “Debt and Revolving Credit Facility”, to the Condensed Consolidated Financial Statements contained in this report and Note 4, “Long-Term Debt”, and Note 5, “Credit Facilities and Borrowings”, to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended May 25,31, 2025.2026. The weighted average coupon interest rate of long-term debt obligations outstanding as of FebruaryAugust 22,30, 2026 was approximately 5.0%.

We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt at maturity or otherwise, from operating cash flows, our commercial paper program, access to the capital markets, and our Revolving Credit Facility. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at all. We have $500.0 million aggregate principal amount of 5.3% senior unsecured notes and $262.5 million aggregate principal amount of 7.125% senior unsecured notes maturing in October 2026 that we expect to pay using commercial paper and cash on hand.

As of the end of the thirdfirst quarter of fiscal 2026,2027, our senior long-term debt ratings were all investment grade. A significant downgrade in our credit ratings would not affect our ability to borrow amounts under the Revolving Credit Facility, although borrowing costs would increase. A downgrade of our short-term credit ratings would impact our ability to borrow under our commercial paper program by negatively impacting borrowing costs and causing shorter durations, as well as making access to commercial paper more difficult, or impossible.

Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense not be less than 3.0 to 1.0 and our ratio of funded net debt to EBITDA not to exceed 4.5 to 1.0. Each ratio is to be calculated on a rolling four-quarter basis. As of FebruaryAugust 22,30, 2026, we were in compliance with these financial covenants.

We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board. Under our current share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. During the first quarter of fiscal 2026,2027, we repurchased 0.82.7 million shares of our common stock under this authorization for an aggregate of $15.0$44.0 million. We did not repurchase any shares of common stock during the second or third quarters of fiscal 2026. The Company’s total remaining share repurchase authorization as of FebruaryAugust 22,30, 2026 was $837.6$793.6 million.

On FebruarySeptember 26,2, 2026, the Company paid a quarterly cash dividend on shares of its common stock of $0.35$0.175 per share to stockholders of record as of close of business on JanuaryJuly 27,30, 2026. On MarchSeptember 31,24, 2026, we announced that our Board had authorized a quarterly dividend of $0.35$0.175 per share to be paid on JuneDecember 3, 2026 to stockholders of record as of the close of business on AprilNovember 30,5, 2026.

During the first three quartersquarter of fiscal 2026,2027, we usedgenerated $12.9$153.6 million of cash, which was the net result of $895.6$4.2 million used in operating activities, $109.7 million used in investing activities, $267.3 million generated from operating activities, $371.1 million generated from investing activities, $1.28 billion used in financing activities, and an increase of $1.9$0.2 million due to the effects of changes in foreign currency exchange rates.

Cash used in operating activities totaled $4.2 million in the first quarter of fiscal 2027 compared to cash generated from operating activities totaledof $895.6$120.6 million and $1.35 billion in the first three quartersquarter of fiscal 2026 and 2025, respectively.2026. The decrease in operating cash flows for the first three quartersquarter of fiscal 20262027 compared to the first three quartersquarter of fiscal 20252026 was primarily driven by higher litigation payments, net of recoveries, primarily related to cooking spray matters, and lower operating profits and the accelerated receipt of our outstanding receivables initiated in the second quarter of fiscal 2025.profits.