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The inability to effectively manage foreign market risk could adversely affect our business, consolidated financial condition, results of operations or liquidity. See Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and Item 8, Note 1 to the Consolidated Financial Statements for information regarding our adoption of highly inflationary accounting in Argentina and Türkiye.

Operating profit of $796 decreased 3.6% primarily due to unfavorable pricing net of cost inflation, supply chain related investments and currency impacts, partially offset by gross productivity savings, lower marketing, research and general expenses and volume and mix gains.

We may not be able to increase prices to fully offset inflationary and other pressures on costs, such as raw and packaging materials, labor and distribution costs, which may impact our financial condition or results of operations.

Deterioration of global economic conditions, an economic recession or slow growth, periods of inflation, or economic uncertainty in our key markets may adversely affect customer and consumer spending as well as demand for our products.

• periods of significant or prolonged inflation, deflation, or economic uncertainty and their impact on our product costs and profitability generally, and our inability to predict inflation over the long term;

Our sales and gross profit performance are influenced by multiple factors including price, volume, inflation, customer mix and product mix. The most significant factor affecting our sales and gross profit performance in fiscal 2026 was product cost inflation, as we …

• inflation, hyperinflation, and adverse economic effects resulting from governmental attempts to control inflation, such as the imposition of wage and price controls and higher interest rates. For example, while inflation rates in certain of the countries in which we operate have declined recently, many of the rates currently remain at the highest levels in decades, resulting in tighter monetary policies, including higher interest rates;

… GAAP, if a foreign entity's economy is determined to be highly inflationary, then such foreign entity's financial statements are remeasured as if the functional currency were the reporting currency.

• changing macroeconomic conditions in our markets, including as a result of inflationary pressure, economic slowdown or recession, major developments in trade relations, volatile commodity prices and increases and/or volatility in the cost of raw and packaging materials, labor, energy and logistics;

Given that approximately two-thirds of our Net sales originate in markets outside the United States, we have experienced and will likely continue to experience volatile foreign currency fluctuations. This is particularly acute in hyper-inflationary economies, including Argentina, Nigeria and Türkiye.

approximately 4 percent to 5 percent input cost inflation in fiscal 2027. We attempt to minimize the effects of inflation through HMM,

long-term inflation assumptions. We review this assumption annually for each plan; however, our annual investment performance for

The conflict in the Middle East could also adversely impact our financial results and operations due to, for example, volatility in global energy markets, supply chain disruptions, inflationary pressures or trade restrictions.

… Our costs are subject to fluctuations due to changes in commodity and input material prices, transportation costs, inflationary impacts and productivity efforts. We have significant exposures to certain commodities and input materials, in particular certain oil-derived materials like resins …

… In response to inflationary pressures and other factors, we have raised prices on many of our products across our global portfolio of brands in recent years. Ongoing periods of high inflation or increased costs resulting from higher tariffs imposed by …

Factors that can affect demand include competitors’ products, advertising and pricing actions, inflationary pressures, rates of unemployment, consumer confidence, health care costs, including increased costs as a result of changes in federal regulations, significant shifts in government policies, the deterioration …

… Other factors that could result in or exacerbate adverse economic conditions include inflation, higher unemployment, mortgage and interest rates, consumer debt levels, trade disputes, as well as adverse climate or weather conditions, worsening or new epidemics, terrorism, or international tensions …

• Managing costs with agility, including our strategies to mitigate tariffs and inflationary pressures, manage operating expenses, and reduce corporate SG&A as a percentage of sales;

Inflationary factors, such as increases in merchandise costs, may adversely affect our business, financial condition and results of operations. We may not be able to adjust prices to sufficiently offset the effect of cost increases without negatively impacting consumer demand.

• Gross margin percentage decreased three basis points; it increased 10 basis points excluding the impact of gasoline price inflation;

We believe ongoing inflationary pressures could continue to affect our vendors and customers and our operating results. Both inflation and higher interest rates have significantly increased new store opening costs and occupancy costs in recent years and, while new store returns remain strong, these increased costs have negatively impacted our projected new store returns and influenced our new store growth plans.

While accelerating levels of inflation in the United States have moderated since 2023, inflation remains elevated in certain areas, including food. If food inflation (and in particular, “food at home,” which moderately accelerated in 2025) rapidly accelerates again, we may …

Inflation affects the way we operate in many markets around the world. In general, we believe that, over time, we will be able to increase prices to counteract the majority of the inflationary effects of increasing costs and to generate sufficient cash flows to maintain our productive capability.

• EMEA - favorable pricing initiatives, including inflationary pricing, partially offset by unfavorable mix;

… Furthermore, inflation, which has significantly risen, has and may continue to increase our operational costs, including labor costs and grain and feed ingredient costs, and continued increases in interest rates in response to concerns about inflation may have the effect …

We continuously evaluate the changing macro-economic conditions including inflationary pressures, rising interest rates, demand outlook and export markets, and the Company's market capitalization. Although all our reporting units and indefinite life intangible assets had more than 20% excess …

▪ Fuel and transportation costs may become inflated and there may be supply chain shortages and delays, as has occurred in recent years.

Gross profit as a percentage of net sales decreased in both the fourth quarter and full year of fiscal 2025 compared to the prior year. Each segment experienced a decline in gross profit as a percentage of net sales versus fiscal 2024. All segments benefited from cost savings generated through the Company’s T&M initiative, which were more than offset by inflationary pressures.

• Rising levels of inflation and interest rates related to domestic and global economic conditions or supply chain issues;

• Rising levels of inflation and interest rates related to domestic and global economic conditions or supply chain issues;

… changes in supply and demand; supplier capacity constraints; inflation; weather conditions (including the effects of climate change); natural disasters; disease or pests; agricultural uncertainty; cost increases in farm inputs; health epidemics, pandemics, or other contagious outbreaks; labor shortages, strikes, or …

We do not currently have operations in Russia, Ukraine, or the Middle East, but due to the impact of the ongoing conflicts in those regions on the global economy, we have experienced and may continue to experience supply chain constraints; inflation in input costs, logistics, manufacturing, and labor costs; volatility in fuel and commodity prices and fluctuations in foreign exchange rates and interest rates, any of which could adversely impact our results of operations.

… Inflation had an impact on our results of operations for the year ended December 31, 2024, primarily due to domestic inflation as well as inflation related local currency price increases in certain international markets. Inflation did not have a significant …

Inflation – information about the impact that inflation may or may not have on our results;

• impacts from inflation, including reduced consumer spending and increased costs, such as for commodities;

may include subdued spend, depressed sentiment, value-seeking behaviors, and reductions in the discretionary income available to purchase our products among consumers, elevated unemployment, changing prices, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East.

… retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.

… tariffs and trade restrictions; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; changes in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. While …

… In 2025, certain inflationary elements such as direct materials and utilities stabilized, with a moderate overall increase in inflationary pressures driven by tobacco leaf costs. The impact of inflation on cost of sales during 2025 was not material to our …

… the impact of the effects of inflation, in cases of sustained and elevated inflation across several of our major markets, it may be difficult to effectively control the increases to our costs. Inflationary pressures may also negatively impact consumer purchasing …

• Türkiye’s net sales declined 4%, driven by the negative effect of foreign exchange, partially offset by higher prices in response to inflation and volumetric gains of JDTW.

… In particular, a significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures, or disruptions to credit and capital markets could lead to decreased consumer confidence and consumer spending, thus reducing consumer demand for our …

Our LIFO charge was $157 million in 2025, compared to $95 million in 2024. The increase in the LIFO charge was due to higher product cost inflation for 2025, compared to 2024.

Our LIFO charge was $157 million in 2025, compared to $95 million in 2024. The increase in the LIFO charge was due to higher product cost inflation for 2025, compared to 2024.

Transportation, inflationary impacts, and fluctuations in energy prices could affect the Company’s operating results.

The Company’s operating costs and the selling prices of certain finished products are sensitive to changes in energy prices, inflationary pressures, and certain logistic constraints. The Company’s processing plants are powered principally by electricity, natural gas, and coal …

We continue to monitor the effects of the global macro environment, including the risk of recession; currency volatility; inflationary pressures; supply chain challenges; social and political issues; competitive pressures; legal and regulatory matters, including the imposition of tariffs and sanctions …

The increase in gross margin in fiscal 2026 is driven by net benefits from the PRGP, partially offset by unfavorable impacts within manufacturing costs and other, reflecting the impact of inflation on our costs, as well as tariffs. The PRGP benefits were driven by the favorable impact of cost efficiencies within our global supply chain network and reductions in excess inventory.

• financial risks, including foreign currency fluctuations, currency controls and other limitations on access to foreign currency, persistent inflationary conditions in certain markets, and increased credit risk of customers, suppliers, distributors, or foreign governments;

… These factors include, but are not limited to, inflation, interest rates, supply chain and logistics disruptions, labor market conditions, trade restrictions and tariffs, changes in trade policies and trade agreements, including the ongoing joint review of the United States-Mexico …

… consumer behavior, confidence, and spending, which can be affected by a variety of factors, including inflation, interest rates, housing prices, unemployment rates, legal and regulatory actions, immigration policies and trends, household debt and wage levels, credit usage, and crime rates …

Political or economic uncertainty or instability, trade policies, disputes, or sanctions, currency fluctuations, the outbreak of pandemics or other illnesses, labor shortages, labor unrest or strikes, transport capacity and costs, inflation, port security, weather conditions, natural disasters, geopolitical conflicts, social …

… We regularly experience inflation in the price of commodities, including food ingredients, which increases our cost of goods sold. Cheese, representing our largest food cost, and other commodities can be subject to significant cost fluctuations due to weather, availability, global …

General economic and political conditions, including social and political causes and movements, higher interest rates, higher fuel and other energy costs, inflation, tariffs, increases or fluctuations in commodity prices such as cheese, proteins and coffee, higher levels of unemployment, higher …