CL

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How CL rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

32%

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Added

119

new sentences

Dropped

109

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Length

+225

words, now 8,748

New in FY2025

To the extent any of these risks actually occur, our business, results of operations, cash flows and financial condition could be materially and adversely impacted, which might cause the value of our securities to decline.
We operate on a global basis serving consumers in more than 200 countries and territories with approximately two-thirds of our Net sales originating in markets outside the United States.
While geographic diversity helps to reduce our exposure to risks in any one country or part of the world, it also means that we face risks associated with significant international operations, including: • 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; • changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profits and cash flows from non-U.S. markets or increase our supply costs, as measured in U.S. dollars, in those markets; • political instability or uncertainty, including as a result of elections, economic instability, geopolitical events and tensions, wars and military conflicts, such as in Ukraine, the Middle East and Venezuela; • changes to trade policies and agreements and other foreign or domestic legal and regulatory requirements, including those resulting in potentially adverse tax consequences or the imposition of and/or the increase in trade restrictions and/or tariffs, sanctions, price controls, labor laws, travel or immigration restrictions, profit controls or other government controls; • environmental events, widespread health emergencies, such as pandemics or epidemics, natural disasters or social or labor unrest; • exchange controls and other limits on our ability to import or export raw materials or finished product or to repatriate cash from overseas, including as a result of the war in Ukraine; • lack of well-established, reliable and/or impartial legal systems in certain countries where we operate and difficulties in enforcing contractual, intellectual property or other legal rights; and • foreign ownership and investment restrictions and the potential for nationalization or expropriation of property or other resources.
In addition, a number of these risks have adversely impacted and may continue to adversely impact consumer sentiment (including as it relates to the perception of U.S. brands internationally) and consumption, which has reduced and may continue to reduce sales volumes of our products or result in a shift in our product mix from higher margin to lower margin product offerings.
We face risks resulting from political and macroeconomic instability and geopolitical events and tensions, wars and military conflicts, such as in Ukraine, the Middle East and Venezuela, which may also heighten other risks disclosed in this Annual Report on Form 10-K, any of which could have an adverse impact on our business, results of operations, cash flows or financial condition.
Uncertainties and risks remain as to the evolving situation in Venezuela.
We have operations, including a manufacturing facility, in Venezuela; however, since December 31, 2015, the local operating results from our Venezuela operations have not been included in our Consolidated Financial Statements.
Nonetheless, the situation in Venezuela could have ramifications for our business in Venezuela and the broader Latin American region and on geopolitical relations more generally.
The situation may impact consumer sentiment and consumption and category growth rates in the Latin American region, supply chain and logistics, and the availability and cost of raw and packaging materials and commodities, such as oil.
For the year ended December 31, 2025, our business in the Eurasia region constituted approximately 1% of our consolidated net sales and approximately 2% of our consolidated operating profit.
We also have faced and continue to face challenges to our ability to repatriate cash from Russia and to identify financial institutions and services to support our Russian operations and may face challenges to our ability to protect our assets in Russia.
We also continue to monitor the impact of sanctions, export controls and import restrictions.
Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, such as China, including those threatened or imposed following the United States’ 2025 executive orders, retaliatory tariffs imposed by the United States’ trading partners or through the renegotiation of trade agreements, have contributed to and are expected to continue to contribute to inflationary pressures, geopolitical tensions, macroeconomic and market volatility and consumer uncertainty.
These developments have also impacted and may continue to impact consumer sentiment, consumption, discretionary spending and/or purchasing patterns.
In addition, they have impacted and may continue to impact the cost and/or availability of raw and packaging materials and the price of our products.
While we have made and will continue to make efforts to mitigate the impact of these and any additional tariffs imposed by the United States and/or other countries or shifts in trade agreements, they or our mitigating actions could have a material effect on our business, results of operations, cash flows and financial condition.
We face vigorous competition worldwide, including from strong local competitors (including private label competition) and from other companies, some of which have greater resources than we do.
In addition, the substantial growth in eCommerce and the use of AI have encouraged the entry of new competitors, some of which sell products direct-to-consumer.
Some of our competitors may spend more aggressively on or have more effective advertising and promotional activities than we do, introduce competing products more quickly and/or respond more effectively to business and economic conditions and changing consumer preferences, including by launching innovative new products or products with on-trend or novel ingredients.
Our success is and will likely increasingly be dependent on our ability to excel at omni-channel demand generation, effectively leverage AI, data analytics and other existing and emerging digital technologies to gain new commercial insights and develop relevant products, marketing and advertising to reach customers and consumers.
The rapidly changing retail landscape and changing consumer preferences may adversely affect our business.
Our products are sold in a highly competitive global omni-channel marketplace that is increasingly defined by the integration of traditional and digital retail operations and evolving consumer purchasing behaviors and preferences, as consumers continue to shop online and increasingly through social commerce and with the assistance of AI.
The increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses, has also intensified competition for consumer attention.
While we continue to sell our products to a variety of customers, including large-format retailers, discounters and eCommerce retailers, our growth is increasingly dependent on our ability to generate consumer demand across key touchpoints in the omni-channel ecosystem whether through traditional retail, eCommerce, social media or digital.
We are also increasingly dependent on certain key retailers, some of which exercise greater bargaining strength than we do, including the exclusive access to valuable first-party consumer data and analytics.
They have demanded and may continue to demand higher trade discounts, allowances, slotting fees, significant investment (including through display media, paid search and co-op programs) or changes to product assortments, which have led to and could continue to lead to reduced sales or profitability in certain markets.
Furthermore, the consolidation of retail customers globally may further increase our concentration risk.
For additional information regarding our customers, see “Distribution; Raw Materials; Competition; Trademarks and Patents” in Item 1 “Business.” We also have been and may continue to be negatively affected by changes in the policies or practices of our customers, such as inventory destocking, automated fulfillment requirements, AI-aided category pricing pressures and algorithms, limitations on access to shelf space (including the digital shelf), delisting of our products or sustainability, supply chain or packaging standards or initiatives.
If we are not successful in adapting or effectively reacting to the rapidly changing retail landscape, changes in consumer behavior, preferences or purchasing patterns and/or executing our 2030 business strategy which is, in part, focused on omni-channel demand generation, our business, results of operations, cash flows and financial condition could be adversely affected.
Our ability to launch new products, to sustain existing products and to expand into adjacent categories, channels of distribution or geographies is affected by whether we can successfully: • identify, develop and fund technological innovations; • obtain and maintain necessary intellectual property protection and avoid infringing intellectual property rights of others; • obtain approvals and registrations of regulated products, including from the U.S.
Food and Drug Administration (the “FDA”) and other regulatory bodies in the United States and abroad; and • anticipate and quickly respond to the needs and preferences of consumers and customers.
In addition, our success in launching new products is dependent on our ability to deliver effective and efficient marketing in an evolving media landscape, which is subject to dynamic and increasingly restrictive privacy requirements and emerging regulations.
Our ability to launch new products, including our ability to deliver effective and efficient marketing campaigns, is also impacted by our ability to successfully adopt and effectively leverage AI, including machine learning and generative AI, and other existing and emerging technologies.
If, in the course of identifying or developing new products, we are found to have infringed the trademark, trade secret, copyright, patent or other intellectual property rights of others, such a finding could adversely affect our ability to develop innovative new products and adversely affect our business, results of operations, cash flows and financial condition.
Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our ethics and compliance, sustainability, social impact, brand protection, product safety, regulatory and quality initiatives and our enterprise risk management program.
Negative publicity about us, our brands, our products, our supply chain, our ingredients, our packaging or our sustainability or social impact practices, or our employees, whether or not deserved, could jeopardize our reputation.
Such negative publicity could relate to, among other things, health or quality concerns, threatened or pending litigation or regulatory proceedings, animal welfare, labor and human rights and environmental impact (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management) or where we operate.
Negative publicity, posts or comments on digital and social media (including those that are AI-generated), whether true or untrue, could damage our brands and our reputation.
In addition, the legal, regulatory and ethics landscape around the use of AI continues to rapidly evolve.
Our ability to successfully adopt and leverage this emerging technology in an effective and ethical manner may impact our reputation and our ability to compete, as outputs from generative AI models could be, among other things, false, biased or inconsistent with our values or strategies.

and 79 more.

Gone since FY2024

If any of these risks actually occur, our business, results of operations, cash flows and financial condition could be materially and adversely impacted, which might cause the value of our securities to decline.
We operate on a global basis serving consumers in more than 200 countries and territories with approximately two-thirds of our Net sales originating in markets outside the U.S.
While geographic diversity helps to reduce our exposure to risks in any one country or part of the world, it also means that we face risks associated with significant international operations, including, but not limited to: • changing macroeconomic conditions in our markets, including as a result of inflationary pressure, economic slowdown or recession, the war in Ukraine, the conflict in the Middle East, 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; • changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profits and cash flows from non-U.S. markets or increase our supply costs, as measured in U.S. dollars, in those markets; • political instability or uncertainty, including as a result of elections, economic instability, geopolitical events and tensions, wars and military conflicts, such as the war in Ukraine, the conflict in the Middle East and tensions between China and Taiwan; • changes to trade policies and agreements and other foreign or domestic legal and regulatory requirements, including those resulting in potentially adverse tax consequences or the imposition of and/or the increase in trade restrictions and/or tariffs, sanctions, price controls, labor laws, travel or immigration restrictions, profit controls or other government controls, including as a result of the war in Ukraine, conflict in the Middle East and tensions between China and Taiwan; • environmental events, widespread health emergencies, such as pandemics or epidemics, natural disasters or social or labor unrest; • exchange controls and other limits on our ability to import or export raw materials or finished product, including as a result of the war in Ukraine and the conflict in the Middle East, or to repatriate earnings from overseas; • lack of well-established, reliable and/or impartial legal systems in certain countries where we operate and difficulties in enforcing contractual, intellectual property or other legal rights; and • foreign ownership and investment restrictions and the potential for nationalization or expropriation of property or other resources.
In addition, a number of these risks may adversely impact consumer confidence and consumption, which could reduce sales volumes of our products or result in a shift in our product mix from higher margin to lower margin product offerings.
We face risks resulting from political and macroeconomic instability and geopolitical events and tensions, such as the war in Ukraine, the conflict in the Middle East and tensions between China and Taiwan.
These geopolitical conflicts andtensions may also heighten other risks disclosed in this Annual Report on Form 10-K, any of which could have an adverse impact on our business, results of operations, cash flows or financial condition.
For the year ended December 31, 2024, our business in the Eurasia region constituted approximately 1% of our consolidated net sales and approximately 2% of our consolidated operating profit.
We also have faced and continue to face challenges to our ability to repatriate cash from Russia and to identify banking partners to support our Russian operations and may face challenges to our ability to protect our assets in Russia.
We also continue to monitor the impact of the sanctions, export controls and import restrictions imposed generally and in response to the war in Ukraine.
The conflict in the Middle East has not had a material impact on our Consolidated Financial Statements.
Uncertainties and risks remain as to the duration of the conflict and its impact on geopolitical relations and stability in North Africa, the wider Middle East and nearby regions.
The conflict has impacted and may continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities, such as oil, consumer sentiment and consumption and category growth rates in the region.
Furthermore, the imposition of tariffs and/or increases in tariffs on various raw materials or products, or threats to impose or increase such tariffs, by the United States and other countries have introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the United States and other countries and new and/or increased tariffs have subjected, and may continue in the future to subject, us to additional costs and expenditure of resources.
Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, such as China, Mexico and Canada, including those imposed following the United States’ February 2025 executive orders, and any nationalist trends in specific countries, have altered and could continue to alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our business, results of operations, cash flows and financial condition.
We face vigorous competition worldwide, including from strong local competitors (including private label competition) and from other large, multinational companies, some of which have greater resources than we do.
In addition, the substantial growth in eCommerce has encouraged the entry of new competitors and business models.
Some of our competitors may spend more aggressively on or have more effective advertising and promotional activities than we do, introduce competing products more quickly and/or respond more effectively to business and economic conditions and changing consumer preferences, including by launching innovative new products.
Our success is and will likely increasingly be dependent on our ability to effectively leverage existing and emerging digital technologies, such as artificial intelligence and data analytics, to gain new commercial insights and develop relevant marketing and advertising to reach customers and consumers.
Increasing dependence on key retailers in developed markets, changes in the policies of our retail trade customers, the emergence of alternative retail channels and the rapidly changing retail landscape and changing consumer preferences may adversely affect our business.
Our products are sold in a highly competitive global marketplace which has experienced increased trade concentration and the growing presence of large-format retailers, discounters and eCommerce retailers.
With the growing trend toward retail trade consolidation, the substantial growth of eCommerce and the integration of traditional and digital operations at key retailers, we are increasingly dependent on certain retailers, and some of these retailers have and may continue to have greater bargaining strength than we do.
They have used and may continue to use this leverage to demand higher trade discounts, allowances, slotting fees, increased investment, including through display media, paid search and co-op programs, or changes to product assortments, which have led to and could continue to lead to reduced sales or profitability in certain markets.
For additional information regarding our customers, see “Distribution; Raw Materials; Competition; Trademarks and Patents” in Item 1 “Business.” We also have been and may continue to be negatively affected by changes in the policies or practices of our retail trade customers, such as inventory destocking, fulfillment requirements, technology-aided category pricing pressures, limitations on access to shelf space, delisting of our products, or sustainability, supply chain or packaging standards or initiatives.
Further, the retail landscape in many of our markets continues to evolve as a result of the substantial growth of eCommerce, changing consumer behaviors and preferences (as consumers increasingly shop online, including to compare prices and product availability) and the increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses.
The substantial growth in eCommerce and the emergence of alternative retail channels have created and may continue to create pricing pressures and/or adversely affect our relationships with our key retailers.
In addition, consumer preferences continue to evolve due to a number of factors, including evolving consumer concerns or perceptions (whether or not valid) regarding sustainability and social impact practices, including the sourcing and sustainability of raw and packaging materials, a demand for natural or organic products and ingredients and ingredient transparency, consumer concerns or perceptions regarding the effects of ingredients, consumer sentiment toward non-local products or sources and perceptions of and increased focus on labor and human rights and environmental impacts (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management).
If we are not successful in continuing to adapt or to effectively react to changes in consumer behaviors, preferences or purchasing patterns and/or changing market dynamics, including customer policies or the proliferation of eCommerce and alternative retail channels, our business, results of operations, cash flows and financial condition could be adversely affected.
Our ability to launch new products, to sustain existing products and to expand into adjacent categories, channels of distribution or geographies is affected by whether we can successfully: • identify, develop and fund technological innovations; • obtain and maintain necessary intellectual property protection and avoid infringing intellectual property rights of others; • obtain approvals and registrations of regulated products, including from the FDA and other regulatory bodies in the U.S. and abroad; and • anticipate and quickly respond to the needs and preferences of consumers and customers.
In addition, our success in launching new products is also dependent on our ability to deliver effective and efficient marketing in an evolving media landscape (including digital), which is subject to dynamic and increasingly restrictive privacy requirements and emerging regulations.
Our ability to launch new products, including our ability to deliver effective and efficient marketing campaigns, is also impacted by our ability to successfully adopt new technologies, such as artificial intelligence, including machine learning and generative artificial intelligence.
If, in the course of identifying or developing new products, we are found to have infringed the trademark, trade secret, copyright, patent or other intellectual property rights of others, directly or indirectly, through the use of third-party ideas or technologies, such a finding could adversely affect our ability to develop innovative new products and adversely affect our business, results of operations, cash flows and financial condition.
Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our ethics and compliance, sustainability and social impact, brand protection and product safety, regulatory and quality initiatives and our enterprise risk management program.
Negative publicity about us, our brands, our products, our supply chain, our ingredients, our packaging, our sustainability and social impact practices, or our employees, whether or not deserved, could jeopardize our reputation.
Such negative publicity could relate to, among other things, health or quality concerns, threatened or pending litigation or regulatory proceedings, animal welfare, labor and human rights and environmental impact (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management) or our sustainability and social impact practices.
Negative publicity, posts or comments on digital and social media, whether true or untrue, could damage our brands and our reputation.
In addition, the legal, regulatory and ethics landscape around the use of artificial intelligence, including machine learning and generative artificial intelligence, is rapidly evolving.
Our ability to adapt and use this emerging technology in an effective and ethical manner may impact our reputation and our ability to compete, as outputs from generative artificial intelligence models could be, among other things, false, biased or inconsistent with our values or strategies.
Further, the use of generative artificial intelligence tools may compromise our confidential or sensitive information or put our intellectual property at risk or subject us to claims of intellectual property infringement, which could in turn damage our reputation.
Additionally, due to the scale and scope of our business, we must rely on relationships with third parties, including our suppliers, distributors, contractors, joint venture partners and other external business partners, for certain functions.
While we have policies and procedures for managing these relationships, they inherently involve a lesser degree of control over business operations, compliance and sustainability and social impact practices, thereby potentially increasing our reputational and legal risk.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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