J.M. Smucker Sets Fiscal 2026 Earnings Outlook Below Consensus

Image: J.M. Smucker’s shares have been under pressure of late.

By Brian Nelson, CFA

J.M. Smucker (SJM) recently reported fourth quarter fiscal 2025 results with revenue missing the mark, while non-GAAP earnings per share beat expectations. In the quarter, net sales for the quarter excluding divestitures and foreign currency exchange fell 1%, while adjusted earnings per share came in at $2.31, better than $2.25 consensus but representing a decline of 13% versus the same period a year ago. Cash provided by operations for the quarter was $393.9 million compared to $428.1 million in the prior-year period. Free cash flow was $298.9 million for the quarter.

Management had the following to say about the results:

Our fourth quarter and full-year results underscore the demand for our leading brands, the resilience of our business, and our ability to act with speed and agility in a dynamic operating environment. This year we strengthened our financial position and grew both adjusted earnings per share and free cash flow, while investing in our business, paying down debt, and returning cash to our shareholders through dividends.

As we look ahead to fiscal year 2026, we remain focused on delivering the business through the strength of our key growth platforms and advancing our strategic priorities. We are confident in our strategy, and we are well-positioned to deliver long-term growth and increase shareholder value.

J.M. Smucker experienced a 3 percentage point decrease in volume/mix in the quarter due to decreases for dog snacks, sweet baked goods, lower contract manufacturing sales related to the divested pet food brands, and fruit spreads, partially offset by an increase for Uncrustable sandwiches. The company benefited from a 3 percentage point increase from net price realization thanks in part to higher net pricing for coffee, partially offset by lower net pricing for sweet baked goods and dog snacks. Smucker ended the quarter with $70 million in cash and cash equivalents, while long-term debt stood at $7.7 billion.

Looking to its fiscal year 2026 outlook, J.M. Smucker’s net sales are targeted to increase 2%-4% with adjusted earnings per share in the range of $8.50-$9.50 versus consensus of $10.25 per share. Comparable net sales are expected to increase approximately 3.5%-5.5%, which excludes noncomparable sales in the prior year related to the divestitures of the Voortman business and certain Sweet Baked Snacks value brands. Free cash flow is targeted at $875 million for the year, considering capital expenditures of $325 million. Shares yield 4.5% at the time of this writing.

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