“We're expecting fairlife's growth to moderate during the remainder of 2025 in advance of bringing additional capacity online.”

In context

“024. Comparable gross margin increased approximately 30 basis points, and comparable operating margin increased approximately 130 basis points. Both were driven by underlying expansion and a benefit from bottler refranchising, partially offset by currency headwinds. Putting it all together, first quarter comparable EPS of $0.73 increased 1% year-over-year despite 5% currency headwinds, dilution from bottle refranchising, elevated net interest expense, and an approximate 2 point increase in our effective tax rate. Free cash flow, excluding the fairlife contingent consideration payment was approximately $560 million, an increase versus prior year. During the quarter, we made our final $6.2 billion payment related to our acquisition of fairlife, which continued to deliver strong performance. We're expecting fairlife's growth to moderate during the remainder of 2025 in advance of bringing additional capacity online. Our balance sheet remains strong with our net debt leverage of 2.1 times EBITDA, which is at the low end of our targeted range of 2 times to 2.5 times. We're confident in our long-term free cash flow generation and continue to have balance sheet capacity to pursue our capital allocation agenda, which prioritizes an unwavering commitment to drive growth and support our dividend while staying flexible and opportunistic. Before I discuss our guidance, I'd like to provide perspective on the current global trade environment and the actions we're taking to manage our business. While our system primarily executes locally, we're not immune to global trade dynamics. Based on what we know today, the dynamic tariff landscape could impact pockets of our systems' cost structure as well as consumer sen”