“We currently estimate Q2 EPS to be pressured by approximately $0.01 net of hedge gains.”

In context

“Now, looking at our full fiscal year 2025, although our guidance is suspended, I'd like to provide some insights into our quarterly earnings shape. EPS is expected to be the lowest in Q2 on an absolute basis due to seasonality, the organizational restructuring I just spoke about, and elevated investments with year-over-year pressure also intensifying in the quarter. EPS is then expected to improve in the latter half of the fiscal year 2025, both sequentially and year-over-year. Some additional aspects to consider as you think about our full year 2025 include the coffee landscape and our Channel Development segment. In regards to the coffee landscape and the trajectory of seed price, given our overall practices and hedging strategy, our year-over-year coffee price impact was minimal in Q1. We currently estimate Q2 EPS to be pressured by approximately $0.01 net of hedge gains. As a reminder, our total cost of green coffee is typically limited to 10% to 15% of our product and distribution costs. In addition to the direct coffee pressure on EPS I just mentioned, seed price volatility also impacts our Channel Development segment and in a more meaningful way. Although we can pass this cost to our business partners, higher prices to an already pressured consumer will likely impact our segment volumes and ultimate revenue and profitability. Finally, our balance sheet remains strong and we remain committed to our BBB plus credit rating. We continue to prioritize shareholder value through dividends, providing a predictable return of capital while we turn around our business. In closing, we are encouraged by our Q1 results, which demonstrated the effectiveness of our "B”