Michael Lavery

Lavery questioned whether international margin softness was structural; Kirk attributed it to lagged cocoa costs and freight, plus deliberate H2 optimization drag. Direct.

Steve confirmed controllable factors (innovation, media ROIs, tentpoles, productivity) remain high-confidence. Oil exposure small and indirect. Nothing outside prior conference expectations.

Steve cited prudent approach given elasticities can move, price pack architecture still deploying, and macro evolution. Will reassess at midyear with more visibility.

Kirk deferred details to Investor Day but noted all investments have near and long-term components. R&D near-term benefit smaller but will accelerate in 2027-2028. Fundamentally about fueling sustainable growth and modernizing portfolio.

Steve outlined upsides: better elasticities, less macro headwinds than modeled, innovation/media execution, beat on productivity/savings. Capital allocation normalizing. Buyback conversation back on table with strong cash flow but details as year progresses.

Steve confirmed hedged to normal levels with mix of fixed and downside-participating structures. Full-year inflationary base case but deflation possible depending on cocoa timing and magnitude.

Kirk confirmed approximately 75% of units still below $4 after pricing. Important to understand consumer price point sensitivity.

Steve focused on supply chain optimization: agility, automation, cross-border opportunities, in-sourcing vs outsourcing, country-of-origin shifts. Impact small for 2025 but principal focus going forward.

Steve declined specifics on 2026 coverage. Still expects inflationary cocoa for 2026 based on hedging carried from 2025. Cocoa decline would improve outlook. Hedging structures reflect expectation of eventual decline.

Michele described mix opportunities toward less cocoa-intensive products. Sourcing details kept confidential for competitive reasons.

Michele outlined snacking powerhouse vision from 2017. LesserEvil targets ingredient-focused snackers and younger demographics. Good track record with SkinnyPop and Dot's.

Steve noted careful formulation testing with no consumer impact. Michele added increased global demand for cocoa alternatives from pressured competitors.

Michele described cellular agriculture as a potential game changer receiving significant investment, but not a near-term solution.

Paul gave unusual early color: foodservice momentum, favorable pork read and a 53rd week as positives, offset by consumer, logistics and portfolio-shaping headwinds.

Paul framed the quarter as noisy but the underlying International demand intact, pointing to the SPAM legal-entity transition as the main distortion.

Ghingo credited the direct sales force, solutions-based selling, and broad channel coverage for growth despite pressured away-from-home traffic.

Jeff outlined top-line drivers: four-quarter momentum, pricing actions, enhanced marketing. Bottom-line: pricing flow-through, mix improvement, T&M benefits, restructuring savings, pork cost relief in H2. Headwinds: beef and nut costs.

John confirmed ongoing portfolio review. Justin's brand moved to strategic partnership as example of finding best owner for non-protein brands. All actions intended to streamline around nourishing protein solutions premise.

John clarified noncore margin impact was from Hormel Health Labs divestiture. Additional pricing actions would largely impact FY2026, not Q4. Convenience store channel softness also impacting foodservice mix and profitability.

Jacinth confirmed investor day assumptions have changed: commodity surge not anticipated, strong 2025 second half not realized, consumer more pressured, Planters profitability lagging. Robust update deferred to Q4 call.

Jim cited Planters/C-store improvement, innovation pipeline showcased at National Restaurant Show, favorable year-over-year comps in H2, direct selling organization, diverse channel presence, and solution-based portfolio.

Jacinth cited Turkey pricing benefit, Planters exceeding Q2 expectations with continued strong growth, T&M acceleration, and sequential margin improvement already visible at end of Q2. Commodity pass-through pricing where applicable.

Jim attributed volume pressure to Planters recovery and lapping prior-year pricing. Jacinth added center store pricing from Q2 prior year created temporary suppression. Expect to hold and grow both volume and sales.

Nathan acknowledged some distribution losses since last call. John noted most recovery comes without slotting fees. Some longer-term recovery may require modest investment.

Jim corrected the premise, T&M accelerates in FY26 with benefits extending beyond. Nathan cited new capabilities in procurement, planning systems, and production.

King detailed the genetics business within the chicken segment and said the new competitive Big Bird line, at about 75% of relevant locations by year-end, should lift both the genetics and domestic chicken P&Ls.

Donnie explained the total company view reflects beef volume declines offsetting growth in Prepared Foods, international, and pork; cited notable wins across Jimmy Dean Sausage, Hillshire Farm lunch meat up 10.4%, Hillshire Snacking up 12.5%, branded fresh chicken up 9%, branded frozen up 12.2%.

Donnie declined to provide additional comments on market reaction to closures; reiterated the footprint is being positioned for long-term cattle availability.

Brady attributed price lift to channel mix, retail brand strength, formula pass-through pricing, and continued lag recovery; expects to grow both top and bottom line well into the future. Donnie added that protein is viewed as essential and consumers prioritize it, making Prepared Foods team performance across every phase of the game the best he has seen.

Donnie cited protein's all-time high meat sales and 98% household penetration as positive backdrop; noted Arkansas governor's SNAP waiver for rotisserie chicken as a trend but had no specifics on economic value of SNAP exposure or potential administration changes.

Donnie highlighted strength in middle meats plus values derived through the grinds complex; noted consumers can move from middle meats down into ground beef formats (patties, chubs) which supports the entire cutout.

Wes highlighted 98%+ order fill rates, value-added growth at 2x total rate, #1 share in both retail and food service, and retail fully cooked relaunch progressing well.

Wes attributed improvement to better S&OP process, improved forecast accuracy, and plant scheduling that reduces waste and puts products in right place at right time.

Wes explained that industry hatch and livability challenges from avian influenza and metapneumovirus mean higher placements don't translate to proportional supply growth.

Kyle quantified startup costs at approximately $20 million and noted lower depreciation comparisons in first half.

Kofi said wheat is a touch above expectations, foodservice flour is dollar-margin-neutral index pass-through, and they're about 3/4 hedged through the year.

Kofi confirmed guidance implies ~75-80bps Q4 organic growth at midpoint, driven by ~200bps inventory tailwind plus trade timing reversal, not banking on dramatic turn in market performance.

Kofi outlined FY2027 headwinds: 53rd week lapping, one month of U.S. yogurt in FY2026 base, and incentive comp normalization; expects HMM at at least 4% plus significant transformation contributions.

CEO explained AI forecasting frees marketers for demand generation and supply chain for waste elimination, calling it seemingly small but actually quite large in impact.

Dana highlighted penetration gains across bars, fruit snacks, salty snacks, and cereal, with Cinnamon Toast Crunch cited as an example of the full remarkability approach working.

Dana McNabb detailed FY26 salty plans: renovated top 3 flavors for bolder taste, spicy innovations (dill Chex Mix, TABASCO Bugles), and value tubs for Chex.

CEO outlined three-part framework: right to win (Blue Buffalo brand), capabilities (refrigerated expertise since 1950s), and investment profile.

CEO explained the remarkable experience framework for evaluating brand-by-brand needs across pricing, marketing, and innovation.

CEO confirmed the brand-by-brand evaluation is complete, with execution underway starting in Q4 and continuing into FY26.

Laguarta repeated the revenue-management-plus-productivity mix to stay affordable but gave no volume expectation for NA beverages.

Laguarta said planned shelf-space gains are arriving through the year with more to come in H2, particularly permanent perimeter space delayed in some channels by commercial negotiations.

Steve addressed the SNAP question noting 8 states restricted in Q1 on beverages and candy but said it is too early for conclusions; the pricing timing question was not directly answered.

Ramon used Lay's relaunch as example: new visual identity, avocado and olive oil versions, no artificials, global freshness/farmer positioning for Super Bowl; same playbook for Gatorade, Quaker, Tostitos.

Ramon detailed international zero sugar success driving brand growth, US focus on away-from-home and meal occasions, Zero Sugar and flavors (wild cherry, cream) bringing younger consumers. Mountain Dew Baja Blast at $1B retail value, Dirty Dew extension planned.

Ramon highlighted LatAm, Europe, Middle East strength and India double-digit; China softer. Noted international business now accretive to PepsiCo margins. Expects mid-single-digit to continue.

Ramon confirmed international underpins reiterated top-line guidance; declined to do piecemeal tariff analysis, saying guidance is based on current observations with various scenarios modeled.

Jamie gave a clear answer on A&M consistency; Ramon described investment in away-from-home platforms, portion control, and permissible offerings but without specific dollar figures.

CFO clarified marketing will still be up YoY but less than initially planned. Some marketing reallocated to promotional spend to close competitive price gaps in broth and chips. Net incremental P&L hit acknowledged. CEO emphasized selective allocation: Rao's and Goldfish continue to receive full marketing support.

CEO distinguished short-term (promotional activity, Goldfish multipack lean-in) from longer-term (package format changes). Selective list price reductions possible on chips if gaps too large, but expects to be smaller than trade component. CFO noted price slope optimization underway, some price-per-ounce misaligned across sizes, correction has margin opportunity.

CFO confirmed full P&L consolidation due to call option, with significant gross margin improvement for Rao's brand (though not material at enterprise level). 51% of La Regina earnings backed out through minority interest line. CEO maintained mid-to-high single-digit Rao's growth trajectory, noted Q1 4% consumption growth with promotional timing shifts between Q1/Q2.

CEO detailed three tariff buckets: (1) steel/aluminum, no domestic alternative for food-grade tin plate, 50% tariff unavoidable; (2) Rao's, Italian production is core to product quality, some Georgia co-manufacturing flexibility but limited; (3) rest-of-world IPEA, some sourcing alternatives available but quality validation takes time.

CFO highlighted remaining Sovos integration savings (ERP just completed Q3/Q4), network optimization opportunities, IT/digital roadmap efficiencies, and indirect procurement. CEO noted productivity step-up from ~3% to ~5% is elevated but team is identifying cross-functional opportunities without undermining capabilities.