Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

General Mills disclosed 22 risk factors in its most recent earnings report. General Mills reported the most risks in the “Finance & Corporate” category.

Risk Overview Q1, 2023

Risk Distribution

27% Finance & Corporate

23% Production

23% Macro & Political

18% Ability to Sell

5% Tech & Innovation

5% Legal & Regulatory

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

2020

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

General Mills Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q1, 2023

Main Risk Category

Finance & Corporate

With 6 Risks

Finance & Corporate

With 6 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

0Risks added

0Risks removed

0Risks changed

Since Feb 2023

0Risks added

0Risks removed

0Risks changed

Since Feb 2023

Number of Risk Changed

No changes from last report

S&P 500 Average: 3

No changes from last report

S&P 500 Average: 3

See the risk highlights of General Mills in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 22

Finance & Corporate

Total Risks: 6/22 (27%)Below Sector Average

Accounting & Financial Operations2 | 9.1%

Accounting & Financial Operations - Risk 1

We may be unable to maintain our profit margins in the face of a consolidating retail environment.

There has been significant consolidation in the grocery industry, resulting in customers with increased purchasing power. In addition,large retail customers may seek to use their position to improve their profitability through improved efficiency, lower pricing,increased reliance on their own brand name products, increased emphasis on generic and other economy brands, and increasedpromotional programs. If we are unable to use our scale, marketing expertise, product innovation, knowledge of consumers’ needs,and category leadership positions to respond to these demands, our profitability and volume growth could be negatively impacted. Inaddition, the loss of any large customer could adversely affect our sales and profits. In fiscal 2022, Walmart accounted for 20 percentof our consolidated net sales and 28 percent of net sales of our North America Retail segment. For more information on significantcustomers, please see Note 8 to the Consolidated Financial Statements in Item 8 of this report.

Accounting & Financial Operations - Risk 2

A change in the assumptions regarding the future performance of our businesses or a different weighted-average cost ofcapital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated results of operations and net worth.

As of May 29, 2022, we had $21.4 billion of goodwill and indefinite-lived intangible assets. Goodwill for each of our reporting unitsis tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. Wecompare the carrying value of the reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value of the reporting unit is less than the carrying value of the reporting unit, including goodwill, impairment has occurred. Our estimates of fairvalue are determined based on a discounted cash flow model. Growth rates for sales and profits are determined using inputs from ourlong-range planning process. We also make estimates of discount rates, perpetuity growth assumptions, market comparables, and otherfactors. If current expectations for growth rates for sales and profits are not met, or other market factors and macroeconomicconditions were to change, then our reporting units could become significantly impaired. While we currently believe that our goodwillis not impaired, different assumptions regarding the future performance of our businesses could result in significant impairment losses. We evaluate the useful lives of our intangible assets, primarily intangible assets associated with theBlue Buffalo,Pillsbury,Totino’s,Progresso,Old El Paso,Yoki,Häagen-Dazs, andAnnie’s brands, to determine if they are finite or indefinite-lived.Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence,demand, competition, other economic factors (such as the stability of the industry, known technological advances, legislative actionthat results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of requiredmaintenance expenditures, and the expected lives of other related groups of assets. Our indefinite-lived intangible assets are also tested for impairment annually and whenever events or changes in circumstancesindicate that impairment may have occurred. Our estimate of the fair value of the brands is based on a discounted cash flow modelusing inputs including projected revenues from our long-range plan, assumed royalty rates which could be payable if we did not ownthe brands, and a discount rate. If current expectations for growth rates for sales and margins are not met, or other market factors andmacroeconomic conditions were to change, then our indefinite-lived intangible assets could become significantly impaired.OurProgresso,Green Giant,EPIC, andUncle Toby’s brands had experienced declining business performance, and we continue tomonitor these businesses. For further information on goodwill and intangible assets, please refer to Note 6 to the Consolidated Financial Statements in Item 8 of this report.

Debt & Financing3 | 13.6%

Debt & Financing - Risk 1

We have a substantial amount of indebtedness, which could limit financing and other options and in some cases adversely affect our ability to pay dividends.

As of May 29, 2022, we had total debt and noncontrolling interests of $11.9 billion. The agreements under which we have issuedindebtedness do not prevent us from incurring additional unsecured indebtedness in the future. Our level of indebtedness may limitour: ?ability to obtain additional financing for working capital, capital expenditures, or general corporate purposes, particularly ifthe ratings assigned to our debt securities by rating organizations were revised downward; and?flexibility to adjust to changing business and market conditions and may make us more vulnerable to a downturn in generaleconomic conditions. There are various financial covenants and other restrictions in our debt instruments and noncontrolling interests. If we fail to complywith any of these requirements, the related indebtedness, and other unrelated indebtedness, could become due and payable prior to itsstated maturity and our ability to obtain additional or alternative financing may also be adversely affected. Our ability to make scheduled payments on or to refinance our debt and other obligations will depend on our operating and financialperformance, which in turn is subject to prevailing economic conditions and to financial, business, and other factors beyond our control.

Debt & Financing - Risk 2

Volatility in the securities markets, interest rates, and other factors could substantially increase our defined benefitpension,other postretirement benefit, and postemployment benefit costs.

We sponsor a number of defined benefit plans for employees in the United States, Canada, and various foreign locations, includingdefined benefit pension, retiree health and welfare, severance, and other postemployment plans. Our major defined benefit pensionplans are funded with trust assets invested in a globally diversified portfolio of securities and other investments. Changes in interestrates, mortality rates, health care costs, early retirement rates, investment returns, and the market value of plan assets can affect thefunded status of our defined benefit plans and cause volatility in the net periodic benefit cost and future funding requirements of theplans. A significant increase in our obligations or future funding requirements could have a negative impact on our results of operations and cash flows from operations.

Debt & Financing - Risk 3

Volatility in the market value of derivatives we use to manage exposures to fluctuations in commodity prices will cause volatility in our gross margins and net earnings.

We utilize derivatives to manage price risk for some of our principal ingredient and energy costs, including grains (oats, wheat, andcorn), oils (principally soybean), dairy products, natural gas, and diesel fuel. Changes in the values of these derivatives are recorded inearnings currently, resulting in volatility in both gross margin and net earnings. These gains and losses are reported in cost of sales inour Consolidated Statements of Earnings and in unallocated corporate items outside our segment operating results until we utilize theunderlying input in our manufacturing process, at which time the gains and losses are reclassified to segment operating profit. We alsorecord our grain inventories at net realizable value. We may experience volatile earnings as a result of these accounting treatments.

Corporate Activity and Growth1 | 4.5%

Corporate Activity and Growth - Risk 1

Our failure to successfully integrate acquisitions into our existing operations could adversely affect our financial results.

From time to time, we evaluate potential acquisitions or joint ventures that would further our strategic objectives. Our successdepends, in part, upon our ability to integrate acquired and existing operations. If we are unable to successfully integrate acquisitions,our financial results could suffer. Additional potential risks associated with acquisitions include additional debt leverage, the loss ofkey employees and customers of the acquired business, the assumption of unknown liabilities, the inherent risk associated withentering a geographic area or line of business in which we have no or limited prior experience, failure to achieve anticipated synergies,and the impairment of goodwill or other acquisition-related intangible assets.

Production

Total Risks: 5/22 (23%)Above Sector Average

Manufacturing3 | 13.6%

Manufacturing - Risk 1

If our products become adulterated, misbranded, or mislabeled, we mightneed to recall those items and may experienceproduct liability claims if consumers or their pets are injured.

We may need to recall some of our products if they become adulterated, misbranded, or mislabeled. A widespread product recall couldresult in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability ofproduct for a period of time. We could also suffer losses from a significant product liability judgment against us. A significant productrecall or product liability case could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence inour products, which could have an adverse effect on our business results and the value of our brands.

Manufacturing - Risk 2

If we are not efficient in our production, our profitability could suffer as aresult of the highly competitive environment in which we operate.

Our future success and earnings growth depend in part on our ability to be efficient in the production and manufacture of our productsin highly competitive markets. Gaining additional efficiencies may become more difficult over time. Our failure to reduce coststhrough productivity gains or by eliminating redundant costs resulting from acquisitions or divestitures could adversely affect ourprofitability and weaken our competitive position. Many productivity initiatives involve complex reorganization of manufacturingfacilities and production lines. Such manufacturing realignment may result in the interruption of production, which may negativelyimpact product volume and margins. We periodically engage in restructuring and cost savings initiatives designed to increase ourefficiency and reduce expenses. If we are unable to execute those initiatives as planned, we may not realize all or any of theanticipated benefits, which could adversely affect our business and results of operations.

Manufacturing - Risk 3

Concerns with the safety and quality of our products could cause consumers to avoid certain products or ingredients.

We could be adversely affected if consumers in our principal markets lose confidence in the safety and quality of certain of ourproducts or ingredients. Adverse publicity about these types of concerns, whether or not valid, may discourage consumers frombuying our products or cause production and delivery disruptions.

Supply Chain1 | 4.5%

Supply Chain - Risk 1

Disruption of our supply chain could adversely affect our business.

Our ability to make, move, and sell products is critical to our success. Damage or disruption to raw material supplies or ourmanufacturing or distribution capabilities due to weather, climate change, natural disaster, fire, terrorism, cyber-attack, pandemics(such as the COVID-19 pandemic), war, governmental restrictions or mandates, labor shortages, strikes, import/export restrictions, orother factors could impair our ability to manufacture or sell our products. Many of our product lines are manufactured at a singlelocation or sourced from a single supplier. The failure of third parties on which we rely, including those third parties who supply ouringredients, packaging, capital equipment and other necessary operating materials, contract manufacturers, commercial transport,distributors, contractors, and external business partners, to meet their obligations to us, or significant disruptions in their ability to doso, may negatively impact our operations. Our suppliers’ policies and practices can damage our reputation and the quality and safetyof our products. Disputes with significant suppliers, including disputes regarding pricing or performance, could adversely affect ourability to supply products to our customers and could materially and adversely affect our sales, financial condition, and results ofoperations. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage suchevents if they occur, particularly when a product is sourced from a single location or supplier, could adversely affect our business andresults of operations, as well as require additional resources to restore our supply chain. Short term or sustained increases in consumer demand at our retail customers may exceed our production capacity or otherwise strainour supply chain. Our failure to meet the demand for our products could adversely affect our business and results of operations.

Costs1 | 4.5%

Costs - Risk 1

Price changes for the commodities we depend on for raw materials, packaging, and energy may adversely affect our profitability.

The principal raw materials that we use are commodities that experience price volatility caused by external conditions such asweather, climate change, product scarcity, limited sources of supply, commodity market fluctuations, currency fluctuations, tradetariffs, pandemics (such as the COVID-19 pandemic), war (including international sanctions imposed on Russia for its invasion ofUkraine), and changes in governmental agricultural and energy policies and regulations. Commodity prices have become, and maycontinue to be, more volatile during the COVID-19 pandemic. Commodity price changes may result in unexpected increases in rawmaterial, packaging, energy, and transportation costs. If we are unable to increase productivity to offset these increased costs orincrease our prices, we may experience reduced margins and profitability. We do not fully hedge against changes in commodityprices, and the risk management procedures that we do use may not always work as we intend.

Macro & Political

Total Risks: 5/22 (23%)Above Sector Average

Economy & Political Environment2 | 9.1%

Economy & Political Environment - Risk 1

Our international operations are subject to political and economic risks.

In fiscal 2022, 23 percent of our consolidated net sales were generated outside of the United States. We are accordingly subject to anumber of risks relating to doing business internationally, any of which could significantly harm our business. These risks include: ?political and economic instability;?exchange controls and currency exchange rates;?tariffs on products and ingredients that we import and export;?nationalization or government control of operations;?compliance with anti-corruption regulations;?foreign tax treaties and policies; and?restriction on the transfer of funds to and from foreign countries, including potentially negative tax consequences. Our financial performance on a U.S. dollar denominated basis is subject to fluctuations in currency exchange rates. These fluctuationscould cause material variations in our results of operations. Our principal exposures are to the Australian dollar, Brazilian real, British pound sterling, Canadian dollar, Chinese renminbi, euro, Japanese yen, Mexican peso, and Swiss franc. From time to time, we enterinto agreements that are intended to reduce the effects of our exposure to currency fluctuations, but these agreements may not beeffective in significantly reducing our exposure. A strengthening in the U.S. dollar relative to other currencies in the countries in which we operate would negatively affect ourreported results of operations and financial results due to currency translation losses and currency transaction losses.

Economy & Political Environment - Risk 2

Economic downturns could limit consumer demand for our products.

The willingness of consumers to purchase our products depends in part on local economic conditions. In periods of economicuncertainty, consumers may purchase more generic, private label, and other economy brands and may forego certain purchasesaltogether. In those circumstances, we could experience a reduction in sales of higher margin products or a shift in our product mix tolower margin offerings. In addition, as a result of economic conditions or competitive actions, we may be unable to raise our pricessufficiently to protect margins. Consumers may also reduce the amount of food that they consume away from home at customers thatpurchase products from our North America Foodservice segment. Any of these events could have an adverse effect on our results ofoperations.

Natural and Human Disruptions2 | 9.1%

Natural and Human Disruptions - Risk 1

Climate change and other sustainability matters could adversely affect our business.

There is growing concern that carbon dioxide and other greenhouse gases in the earth’s atmosphere may have an adverse impact onglobal temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. If such climate changehas a negative effect on agricultural productivity, we may experience decreased availability and higher pricing for certain commoditiesthat are necessary for our products. Increased frequency or severity of extreme weather could also impair our production capabilities,disrupt our supply chain, impact demand for our products, and increase our insurance and other operating costs. Increasing concernover climate change or other sustainability issues also may adversely impact demand for our products due to changes in consumerpreferences or negative consumer reaction to our commitments and actions to address these issues. We may also become subject toadditional legal and regulatory requirements relating to climate change or other sustainability issues, including greenhouse gasemission regulations (e.g., carbon taxes), energy policies, sustainability initiatives (e.g., single-use plastic limits), and disclosureobligations. If additional legal and regulatory requirements are enacted and are more aggressive than the sustainability measures thatwe are currently undertaking to monitor our emissions and improve our energy efficiency and other sustainability goals, or if we choseto take actions to achieve more aggressive goals, we may experience significant increases in our costs of operations.We have announced goals and commitments to reduce our carbon footprint. If we fail to achieve or improperly report on our progresstoward achieving our carbon emissions reduction goals and commitments, then the resulting negative publicity could harm ourreputation and adversely affect demand for our products.

Natural and Human Disruptions - Risk 2

Global health developments and economic uncertainty resulting from the COVID-19 pandemic could materially and adverselyaffect our business, financial condition, and results of operations.

The public health crisis caused by the COVID-19 pandemic and the measures being taken by governments, businesses, including us,and the public at large to limit COVID-19’s spread have had, and may continue to have, certain negative impacts on our business,financial condition, and results of operations including, without limitation, the following: ?We have experienced, and may continue to experience, a decrease in sales of certain of our products in markets around theworld that have been affected by the COVID-19 pandemic. In particular, sales of our products in the away-from-home foodoutlets across all our major markets have been negatively affected by reduced consumer traffic resulting from shelter-in-placeregulations or recommendations and closings of restaurants, schools and cafeterias. If the COVID-19 pandemic persists orintensifies, its negative impacts on our sales, particularly in away-from-home food outlets, could be more prolonged and maybecome more severe.?Deteriorating economic and political conditions in our major markets affected by the COVID-19 pandemic, such as increasedunemployment, decreases in disposable income, declines in consumer confidence, or economic slowdowns or recessions,could cause a decrease in demand for our products.?We have experienced minor temporary workforce disruptions in our supply chain as a result of the COVID-19 pandemic.Illness, travel restrictions, absenteeism, or other workforce disruptions could negatively affect our supply chain,manufacturing, distribution, or other business processes. We may face additional production disruptions in the future, whichmay place constraints on our ability to produce products in a timely manner or may increase our costs.?Changes and volatility in consumer purchasing and consumption patterns may increase demand for our products in onequarter, resulting in decreased consumer demand for our products in subsequent quarters. Short term or sustained increases inconsumer demand at our retail customers may exceed our production capacity or otherwise strain our supply chain.?The failure of third parties on which we rely, including those third parties who supply our ingredients, packaging, capitalequipment and other necessary operating materials, contract manufacturers, commercial transport, distributors, contractors,commercial banks, and external business partners, to meet their obligations to us, or significant disruptions in their ability todo so, may negatively impact our operations. ?Significant changes in the political conditions in markets in which we manufacture, sell, or distribute our products (includingquarantines, import/export restrictions, price controls, governmental or regulatory actions, closures or other restrictions thatlimit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform necessarybusiness functions, or otherwise prevent our third-party partners, suppliers, or customers from sufficiently staffing operations,including operations necessary for the production, distribution, and sale of our products) could adversely impact ouroperations and results.?Actions we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemicmay result in investigations, legal claims or litigation against us.

Capital Markets1 | 4.5%

Capital Markets - Risk 1

Global capital and credit market issues could negatively affect our liquidity,increase our costs of borrowing, and disrupt the operations of our suppliers and customers.

We depend on stable, liquid, and well-functioning capital and credit markets to fund our operations. Although we believe that ouroperating cash flows, financial assets, access to capital and credit markets, and revolving credit agreements will permit us to meet ourfinancing needs for the foreseeable future, there can be no assurance that future volatility or disruption in the capital and creditmarkets will not impair our liquidity or increase our costs of borrowing. We also utilize interest rate derivatives to reduce the volatilityof our financing costs. If we are not effective in hedging this volatility, we may experience an increase in our costs of borrowing. Ourbusiness could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital andcredit markets or a slowdown in the general economy. We may not have access to preferred sources of liquidity when needed or on terms we find acceptable, and our borrowing costs couldincrease. An economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed. Adisruption in the financial markets may have a negative effect on our derivative counterparties and could impair our banking or otherbusiness partners, on whom we rely for access to capital and as counterparties to our derivative contracts. From time to time, we issue variable rate securities based on London Interbank Offered Rate (LIBOR) and enter into interest rateswaps that contain a variable element based on LIBOR. The United Kingdom Financial Conduct Authority intends to phase out theLIBOR rates associated with our outstanding variable rate securities and interest rate swaps by June 2023. The U.S. Federal Reservehas selected the Secured Overnight Funding Rate (SOFR) as the preferred alternate rate to LIBOR. We are planning for this transitionand will amend any contracts to accommodate the SOFR rate where required. We continue to evaluate the potential impact of this transition, which remains subject to uncertainty.

Ability to Sell

Total Risks: 4/22 (18%)Below Sector Average

Competition1 | 4.5%

Competition - Risk 1

The categories in which we participate are very competitive, and if we arenot able to compete effectively, our results of operations could be adversely affected.

The human and pet food categories in which we participate are very competitive. Our principal competitors in these categories aremanufacturers, as well as retailers with their own branded and private label products. Competitors market and sell their productsthrough brick-and-mortar stores and e-commerce. All of our principal competitors have substantial financial, marketing, and other resources. In most product categories, we compete not only with other widely advertised branded products, but also with regionalbrands and with generic and private label products that are generally sold at lower prices. Competition in our product categories isbased on product innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity,convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer preferences. If our largecompetitors were to seek an advantage through pricing or promotional changes, we could choose to do the same, which couldadversely affect our margins and profitability. If we did not do the same, our revenues and market share could be adversely affected.Our market share and revenue growth could also be adversely impacted if we are not successful in introducing innovative products inresponse to changing consumer demands or by new product introductions of our competitors. If we are unable to build and sustainbrand equity by offering recognizably superior product quality, we may be unable to maintain premium pricing over generic and private label products.

Demand1 | 4.5%

Demand - Risk 1

We may be unable to anticipate changes in consumer preferences and trends,which may result in decreased demand for our products.

Our success depends in part on our ability to anticipate the tastes, eating habits, and purchasing behaviors of consumers and to offerproducts that appeal to their preferences in channels where they shop. Consumer preferences and category-level consumption maychange from time to time and can be affected by a number of different trends and other factors. If we fail to anticipate, identify orreact to these changes and trends, such as adapting to emerging e-commerce channels, or to introduce new and improved products on atimely basis, we may experience reduced demand for our products, which would in turn cause our revenues and profitability to suffer.Similarly, demand for our products could be affected by consumer concerns regarding the health effects of ingredients such as sodium,trans fats, genetically modified organisms, sugar, processed wheat, grain-free or legume-rich pet food, or other product ingredients or attributes.

Sales & Marketing1 | 4.5%

Sales & Marketing - Risk 1

We may be unable to grow our market share or add products that are in faster growing and more profitable categories.

The food industry’s growth potential is constrained by population growth. Our success depends in part on our ability to grow ourbusiness faster than populations are growing in the markets that we serve. One way to achieve that growth is to enhance our portfolioby adding innovative new products in faster growing and more profitable categories. Our future results will also depend on our abilityto increase market share in our existing product categories. If we do not succeed in developing innovative products for new andexisting categories, our growth and profitability could be adversely affected.

Brand / Reputation1 | 4.5%

Brand / Reputation - Risk 1

Our results may be negatively impacted if consumers do not maintain their favorable perception of our brands.

Maintaining and continually enhancing the value of our many iconic brands is critical to the success of our business. The value of ourbrands is based in large part on the degree to which consumers react and respond positively to these brands. Brand value coulddiminish significantly due to a number of factors, including consumer perception that we have acted in an irresponsible manner,adverse publicity about our products, our failure to maintain the quality of our products, the failure of our products to deliverconsistently positive consumer experiences, concerns about food safety, or our products becoming unavailable to consumers.Consumer demand for our products may also be impacted by changes in the level of advertising or promotional support. The use ofsocial and digital media by consumers, us, and third parties increases the speed and extent that information or misinformation andopinions can be shared. Negative posts or comments about us, our brands, or our products on social or digital media could seriouslydamage our brands and reputation. If we do not maintain the favorable perception of our brands, our business results could be negatively impacted.

Tech & Innovation

Total Risks: 1/22 (5%)Below Sector Average

Cyber Security1 | 4.5%

Cyber Security - Risk 1

Our business operations could be disrupted if our information technology systems fail to perform adequately or are breached.

Information technology serves an important role in the efficient and effective operation of our business. We rely on informationtechnology networks and systems, including the internet, to process, transmit, and store electronic information to manage a variety ofbusiness processes and to comply with regulatory, legal, and tax requirements. Our information technology systems and infrastructureare critical to effectively manage our key business processes including digital marketing, order entry and fulfillment, supply chainmanagement, finance, administration, and other business processes. These technologies enable internal and external communicationamong our locations, employees, suppliers, customers, and others and include the receipt and storage of personal information aboutour employees, consumers, and proprietary business information. Our information technology systems, some of which are dependenton services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes such ascatastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, security breaches, computerviruses, hackers, employee error or malfeasance, and other causes. Increased cyber-security threats pose a potential risk to the securityand viability of our information technology systems, as well as the confidentiality, integrity, and availability of the data stored onthose systems. The failure of our information technology systems to perform as we anticipate could disrupt our business and result intransaction errors, processing inefficiencies, data loss, legal claims or proceedings, regulatory penalties, and the loss of sales andcustomers. Any interruption of our information technology systems could have operational, reputational, legal, and financial impactsthat may have a material adverse effect on our business.

Legal & Regulatory

Total Risks: 1/22 (5%)Below Sector Average

Regulation1 | 4.5%

Regulation - Risk 1

New regulations or regulatory-based claims could adversely affect our business.

Our facilities and products are subject to many laws and regulations administered by the United States Department of Agriculture, theFederal Food and Drug Administration, the Occupational Safety and Health Administration, and other federal, state, local, and foreigngovernmental agencies relating to the production, packaging, labelling, storage, distribution, quality, and safety of food products andthe health and safety of our employees. Our failure to comply with such laws and regulations could subject us to lawsuits,administrative penalties, and civil remedies, including fines, injunctions, and recalls of our products. We advertise our products andcould be the target of claims relating to alleged false or deceptive advertising under federal, state, and foreign laws and regulations.We may also be subject to new laws or regulations restricting our right to advertise our products, including restrictions on the audienceto whom products are marketed. Changes in laws or regulations that impose additional regulatory requirements on us could increaseour cost of doing business or restrict our actions, causing our results of operations to be adversely affected. Significant COVID-19 related changes in the political conditions in markets in which we manufacture, sell or distribute our products(including quarantines, import/export restrictions, price controls, governmental or regulatory actions, closures or other restrictions thatlimit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform necessary businessfunctions or otherwise prevent our third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products) could adversely impact our operationsand results. We are subject to various federal, state, local, and foreign environmental laws and regulations. Our failure to comply withenvironmental laws and regulations could subject us to lawsuits, administrative penalties, and civil remedies. We are currently party toa variety of environmental remediation obligations. Due to regulatory complexities, uncertainties inherent in litigation, and the risk ofunidentified contaminants on current and former properties of ours, the potential exists for remediation, liability, indemnification, andcompliance costs to differ from our estimates. We cannot guarantee that our costs in relation to these matters, or compliance withenvironmental laws in general, will not exceed our established liabilities or otherwise have an adverse effect on our business and results of operations.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.

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