On October 1, 2024, the company announced a Restructuring Plan designed to drive operational and cost efficiencies and improve cash flows. The plan includes facility closures, production line curtailments, and employee headcount reductions.

In connection with the Restructuring Plan, the company decreased its estimate of capital expenditures in fiscal 2025 by $100 million to $750 million, excluding acquisitions, which included pausing the next phase of the ERP build and implementation.

The company acknowledges challenges in a difficult operating environment, with higher-than-expected manufacturing costs and softer-than-expected volumes impacting financial results. Management is taking steps to adapt to the dynamic environment.

The company expects the Restructuring Plan to generate approximately $55 million in pre-tax cost savings and reduce working capital in fiscal 2025. Actions are expected to be substantially complete by the end of the fourth quarter of fiscal 2025.

In November 2024, a class action complaint was filed in the U.S. District Court for the Northern District of Illinois against the Company, certain of its subsidiaries and a number of other producers of frozen potato products alleging violations of antitrust laws.

The company is subject to currency exchange rate risk through investments and businesses owned and operated in foreign countries. A hypothetical 10 percent adverse change in exchange rates versus the U.S. dollar would result in losses of $73.9 million ($56.2 million after-tax) as of November 24, 2024.

Volume declined 6%, largely reflecting the impact of soft global restaurant traffic trends; customer share losses, net of gains; and the carryover effect of our decision in the prior year to exit certain lower-priced and lower-margin business in Europe.

Price/mix declined 2%, reflecting planned investments in price and trade support to attract and retain volume in North America, pricing actions in key international markets in response to a more competitive environment, and unfavorable channel and product mix.

Adjusted Gross Profit declined $134.9 million versus the prior year quarter to $343.5 million due to unfavorable price/mix, higher manufacturing costs per pound, and lower sales volumes. The higher manufacturing costs per pound largely reflected input cost inflation.

The company is evaluating other cost-saving and productivity initiatives to improve operating efficiency, profitability, and cash flows, while also positioning us to continue to support our customers and create value for our stakeholders over the long-term.

During the twenty-six weeks ended November 24, 2024, the company repurchased 1,412,852 shares of common stock for $82.0 million. As of November 24, 2024, approximately $308 million remained authorized for repurchase.

During the twenty-six weeks ended November 24, 2024, the company paid $103.3 million of cash dividends to common stockholders.

Investing activities used $484.9 million of cash in the first half of fiscal 2025, compared with $570.8 million in the same period in the prior year. Expenditures in both periods primarily related to our investments to expand our french fry capacity and other facility modernization efforts.

We expect challenging conditions to persist through the remainder of fiscal 2025, as weak restaurant traffic trends and incremental french fry capacity expansions have added to an imbalance in global industry supply and demand, especially outside of North America.