Good morning and welcome to our 2025 Annual Meeting of Shareholders. I'm Mark Smucker, Chief Executive Officer and Chair of the Board of The J.M. Smucker Company. I'd like to start this 2025 Annual Meeting by thanking you, our shareholders, for your continued commitment and investment in The J.M. Smucker Company. Before we get underway, I want to let you know that today's session is being recorded and a replay can be accessed via our corporate website. Also, today's event may contain forward-looking statements that reflect our expectations about the future performance of our business, and actual results may differ due to risks and uncertainties. In fiscal year 2025, we delivered positive results in a dynamic operating environment. Our performance reflects top-line growth supported by strong consumer demand for our portfolio of leading brands and bottom-line growth driven by disciplined cost management and execution.
I am pleased with the continued momentum of our business as the company remained resilient amidst macroeconomic pressures, reflecting an unrelenting focus on our strategy and the benefits from our work to reshape the portfolio in recent years. As we move forward into fiscal year 2026, we are amplifying what is working and evolving our strategy where needed. We have established key priorities to guide our commitment to delivering the business, focused on driving organic growth, embedding a transformation mindset into our everyday work, and inspiring a bold spirit to accelerate our pace of change. We have taken decisive action by evolving our sweet baked snacks leadership team and are executing a comprehensive plan to drive the stabilization of the Hostess Brand and to ultimately return it to growth.
We continue to prioritize resources to our largest growth opportunities in our key growth platforms: Uncrustables, Café Bustelo, Meow Mix, Milk-Bone, and Hostess Brands. We remain well-positioned to continue to navigate a dynamic environment for input costs, including green coffee volatility, through the deep expertise of our teams and a strong portfolio that offers options across the value spectrum. While we expect the external environment will continue to be dynamic, we have the right strategy in place and are excited about the opportunities we see in the years ahead. Our confidence is driven by the strength of our portfolio of leading brands and how we are evolving our business to meet the needs of the consumer in attractive categories. Our ability to fuel growth across our portfolio to new audiences through our world-class marketing, commercial, and manufacturing capabilities.
A focus on consumer-led innovation as we anticipate their needs through a relentless focus on data and insights. Of course, our talented people who bring their passion for our brands and consumers to work every day. All of which will enable us to deliver long-term growth and increase shareholder value through the strong foundation we have established. Now, I would like to welcome the company's Board of Directors, Executive Leadership Team, and our auditors from Ernst & Young who are with us this morning. I would also like to take a moment to recognize Alex Shumate, who is retiring from our Board. Alex has served as a director for 16 years. The expertise and perspective he brought to the Board from his long career with the law firm Squire Patton Boggs has been invaluable.
We will miss his contributions as our Lead Independent Director, a key member of the Nominating Governance and Corporate Responsibility Committee, and his thoughtful counsel on some of the most important decisions we've made during the last two decades. Alex, thank you for your many contributions, distinguished leadership, and unwavering commitment to the Board and company. We wish you the best and know your contributions will continue to have a lasting influence on the future of our company. As noted in the agenda for the meeting, we will first address our official business of reviewing and voting on the proposals in the proxy materials and then respond to any shareholder questions. Our Executive Leadership Team, the chairs of our Board committees, and our independent auditors will be available during the question and answer session to respond to appropriate questions.
Now, I ask our Chief Legal Officer and Secretary Jeannette Knudsen to establish that the meeting has been duly called to order and that a quorum is present for the annual meeting.
Thank you, Mark. The Board fixed June 16, 2025, as the record date for determining the shareholders entitled to vote at this meeting. An affidavit is with the Inspector of Elections attesting to the fact that the notice of the annual meeting, the proxy statement, and the 2025 annual report were mailed to shareholders of record beginning on June 27, 2025. Louis Larson has been appointed to act as Inspector of Election at this meeting and has submitted a report to me confirming that there are more than the required majority of total shares outstanding present by proxy. Since a quorum is present, this meeting may proceed to transact business.
The 2025 Annual Meeting of Shareholders is now called to order. The complete minutes of last year's Annual Meeting of Shareholders, as well as a copy of the company's most recent annual report on Form 10-K that includes the financial statements and Ernst & Young's audit reports for the fiscal year ended April 30th, 2025, have been posted to the meeting site for inspection. Our Audit Committee has reviewed the audit reports and approved the financial statements in the annual report. The business of this meeting is limited to the three management proposals included in the proxy statement. I will now ask Jeannette to review the management proposals along with the voting results for each proposal.
The polls for shareholder voting are open. Any shareholder who did not submit a proxy or submitted a proxy and wishes to revoke it and vote in person may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or internet and do not want to change their vote do not need to take any further action. Any votes submitted today will not be included in the results that will be reported today, but will be tabulated and included with the final results. The first proposal concerns the election of nine directors as set forth in the proxy statement to serve for a term of one year, which will expire at the 2026 Annual Meeting of Shareholders.
Each of the director nominees has received a majority of the votes cast in favor of their election to the Board. The nominees are hereby elected for a one-year term and further until their successors are otherwise appointed or elected. The second proposal is ratification of the appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending April 30, 2026. An affirmative vote of the holders of a majority of the votes cast on this proposal, or 94%, was received to pass the proposal. Accordingly, the proposal is approved. The third proposal is the advisory vote on the company's executive compensation. An affirmative vote of the holders of a majority of the votes cast on this proposal, or 95%, was received to pass the proposal. Accordingly, the proposal is approved. This concludes the voting results.
The company will publicly announce the final voting results on or before August 19, 2025, through the filing of a Form 8-K with the Securities and Exchange Commission.
Thank you, Jeannette. I declare the polls closed. The proxies will be counted by and held in the possession of the Inspector of Election. As there is no further formal business to come before the annual meeting, I declare this 2025 Annual Meeting of Shareholders adjourned and all matters before it closed. In closing, I want to reiterate the confidence we have in our organization and employees, the enduring strength of our proven strategy, and the excitement that exists around our brands in coffee, frozen handheld and spreads, pet, and sweet-baked snacks. Today, approximately 90% of U.S. homes have a product from our portfolio in their pantries. With this strong foundation, our company is uniquely positioned to deliver continued growth and shareholder value. To all our shareholders, we thank you for your support and trust in The J.M. Smucker Company. We are now happy to take your questions.
Joining me for this Q&A session are members of the company executive leadership team and our board committee chairs, Dawn Willoughby, Chair of the Nominating Governance and Corporate Responsibility Committee, Susan Chapman- Hughes, Chair of the Compensation and People Committee, and Jodi Taylor, Chair of the Audit Committee. If you are a validated shareholder and have a question, please enter it on the web portal. Out of consideration for others, please limit yourself to one question. Please note this meeting is being recorded. We will attempt to answer as many questions as time allows, but only questions that are relevant to the meeting will be addressed. Any appropriate questions that we do not have time for will be addressed on our company website. Now we'll take the first question.
The first question is, it's good to see debt pay down following the Hostess acquisition. The company repaid approximately $700 million of debt in fiscal 2025 and has plans to pay down $500 million in each of the next two fiscal years. When do you anticipate the Hostess debt will be repaid?
Welcome and greetings. We are continuing to prioritize debt reduction and planning to pay down approximately $500 million of debt annually in each of our next two fiscal years. With this anticipated deleveraging and overall business growth and performance, we would anticipate a leverage ratio at or below 3x net debt to adjusted EBITDA by the end of our fiscal year 2027. With this level of debt, it will provide the financial flexibility for a balanced approach to capital deployment and our ability to deliver the business.
Our second question is, shareholders are increasingly concerned about the hyperpoliticization of publicly traded corporations that get pulled into divisive political debates. Recently, several large companies have been in the spotlight relative to these debates. How do you manage these issues?
Thanks for the question. This is Mark. We approach each decision with a great sense of responsibility and thoughtfully consider each issue, whether it aligns to our values and whether we believe we can impact positive, meaningful change before deciding whether to lend our voice or act. Issues are often complex and garner passionate responses due to the implications they pose for individuals and society. Company leadership, we are all accountable to all constituents, first and foremost to our consumers and ultimately to our shareholders. Our first priority is running and delivering the business to serve these constituents, which also includes our employees and the communities where we work. We weigh competing interests and perspectives in our pursuit of being a successful company that also does the right thing in the right way.
Specifically, we consider the impact of situations and our response on our people, as well as the reputation of our company, including evaluating business and legal risks.
The next question is, what effect will global tariffs have on the company?
Thank you for the question. This is John Brase. First and foremost, we continue to monitor and assess changes to trade policy and tariffs, and we are working with our industry associations and policymakers to achieve the best outcome for our consumers. As previously discussed, coffee is an unavailable resource that cannot be grown in the continental U.S., and we will continue to monitor how trade policy evolves to address items that cannot be grown in the U.S. Our original guidance communicated on the company's Q4 earnings call contemplated a 25% adjusted earnings per share impact to fiscal 2026. At the time, tariffs were largely 10% across the impacted countries.
The next question is, I've held my shares for longer than four years. Did my shares count in the voting?
Thank you for the question. This is Jeannette Knudsen. No, we stopped treating long-term shares differently in 2022. All shares are treated equally for voting purposes.
At this time, there are no more questions in the queue. I'll turn the call back over to Mark Smucker for a few closing comments.
First of all, I want to thank everyone for joining us today, and thank you to our shareholders for your support and trust in The Smucker Company. Looking ahead, I'm encouraged by the future growth opportunities we see across the company and remain confident in our strategy. We are proud of all that we have achieved, and we're even more excited about our future. Thank you all again for your time, and have a wonderful day.
That concludes our meeting today. You may now disconnect.
The host has ended this call. Goodbye.