The acquisition of Sovos Brands contributed a 12-point benefit to the overall net sales increase. For the three-month period ended October 27, 2024, the Sovos Brands acquisition contributed $310 million to Net sales and a loss of $3 million to Net earnings.

The sale of the Pop Secret popcorn business resulted in a pre-tax loss of $25 million. This loss is included in Other expenses / (income) and impacted the overall profitability for the quarter.

In November 2024, an agreement was made to sell the noosa yoghurt business for $200 million. The closing of the transaction is subject to customary conditions, including regulatory approval.

A new cost savings initiative was announced, targeting $190 million in pre-tax costs and $215 million in capital expenditures. The initiatives are expected to generate annual ongoing savings of approximately $250 million by the end of 2028.

The company is implementing an initiative to improve the effectiveness of its Snacks direct-store-delivery route-to-market network. In the first quarter of 2025, $8 million was recognized in Marketing and selling expenses related to this initiative.

The integration of Sovos Brands is underway, with identified opportunities for cost synergies. Restructuring charges of $21 million were recorded in 2024 for severance pay and benefits related to these initiatives.

The company continues to navigate industry-wide challenges including supply chain disruptions, commodity cost volatility, changes in consumer spending, labor market issues, and economic uncertainties.

The United States Department of Justice (DOJ) filed lawsuits concerning alleged violations of the Clean Water Act relating to contaminant discharges from the Napoleon, Ohio wastewater treatment facility.

The company is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. During 2024, the largest customer accounted for approximately 22% of consolidated net sales.

In Snacks, sales decreased 4%. Excluding the impact from the divestiture of the Pop Secret popcorn business, sales decreased due to declines in third-party partner brands and contract manufacturing, Pepperidge Farm cookies, Goldfish crackers and Late July snacks. Sales were impacted by volume/mix declines and lower net price realization.

Sales of U.S. soup decreased 4% primarily due to movements in retailer inventory levels influenced by the later timing of the Thanksgiving holiday this year.

We operate in a highly competitive industry and experience competition in all of our categories.

The company announced new cost savings initiatives beginning in 2025, including initiatives to further optimize our supply chain and manufacturing network, optimization of our information technology infrastructure and targeted cost management.

Gross profit margin performance was impacted by supply chain productivity improvements, which helped to offset the negative impact of cost inflation and other supply chain costs.

Administrative expenses increased 11% in 2025 from 2024. The increase was primarily due to higher general administrative costs and inflation.

Capital expenditures included network optimization for our Meals & Beverages business.

Capital expenditures primarily relate to optimization of production within our manufacturing network, implementation of our existing SAP enterprise-resource planning system for Sovos Brands and optimization of information technology infrastructure and applications.

In the first quarter of 2025, we recognized insurance recoveries in Administrative expenses of $1 million ($1 million after tax) related to a cybersecurity incident that was identified in the fourth quarter of 2023.

On December 3, 2024, the Board of Directors approved an increase in the regular quarterly dividend from $.37 per share to $.39 per share, or 5%.

During the three-month periods ended October 27, 2024, we repurchased 1.098 million shares at a cost of $54 million pursuant to our anti-dilutive share repurchase programs.

On October 2, 2024, we completed the issuance of senior unsecured notes of $1.15 billion. In October 2024, we used a portion of the net proceeds from the issuance of the notes to repay $200 million of the $400 million outstanding under our 2022 Delayed Draw Term Loan Credit Agreement.

On March 20, 2024, the United States Department of Justice (DOJ), on behalf of the U.S. Environmental Protection Agency, and National Education Law Center, on behalf of Environment America and Lake Erie Waterkeeper, filed lawsuits in the United States District Court for the Northern District of Ohio Western Division concerning alleged violations of the Clean Water Act relating to alleged contaminant discharges from our Napoleon, Ohio wastewater treatment facility in excess of the facility's Clean Water Act permit limits.

Economic pressures on consumers, including the challenges of persistent inflation, may continue to negatively impact our volumes throughout 2025.

Changes in consumer demand for our products and favorable perception of our brands.

Changing inventory management practices by certain of our key customers.