The J.M. Smucker Co. Announces Fiscal 2026 First Quarter Results

Rhea-AI Summary

J.M. Smucker Co. (NYSE: SJM) reported fiscal 2026 first quarter results with net sales of $2.1 billion, down 1% year-over-year. Excluding divestitures and foreign currency exchange, comparable net sales increased 2%. The company reported a net loss per share of $0.41, while adjusted EPS was $1.90, down 22% from the prior year.

The company raised its full-year net sales growth guidance to 3.0-5.0% from previous 2.0-4.0%, maintained adjusted EPS guidance of $8.50-$9.50, and increased free cash flow forecast to $975 million from $875 million. Results reflect strong top-line growth driven by consumer demand and disciplined cost management, despite operating in a dynamic external environment.

Positive

• Comparable net sales increased 2% excluding divestitures
• 6% increase in net price realization, primarily in coffee segment
• Raised full-year net sales growth guidance to 3.0-5.0%
• Increased free cash flow forecast to $975 million from $875 million
• International and Away From Home segment profit increased 35%

Negative

• Net loss per diluted share of $0.41 compared to $1.74 profit last year
• Operating income decreased 87% to $45.6 million
• Adjusted earnings per share decreased 22% to $1.90
• Negative free cash flow of $94.9 million compared to positive $49.2 million last year
• Volume/mix decreased 4% across comparable sales

Insights

Financial Analyst

Smucker posts mixed Q1 results with declining profits but raises full-year sales guidance on strong brand performance.

J.M. Smucker reported $2.1 billion in Q1 FY2026 revenue, representing a slight 1% year-over-year decline, though comparable sales (excluding divestitures) increased by 2%. The company posted a concerning net loss of $0.41 per share, a stark reversal from the $1.74 EPS in the prior year. On an adjusted basis, earnings were $1.90 per share, down 22% from last year's $2.44.

Cash flow metrics deteriorated significantly, with operating activities using $10.6 million versus generating $172.9 million in the prior year period. Free cash flow swung to negative $94.9 million from positive $49.2 million a year ago.

The revenue performance was primarily driven by 6% higher pricing (especially in coffee), which was partially offset by 4% lower volume/mix. Operating income plummeted 87% to $45.6 million, largely due to higher commodity costs and unfavorable derivative positions.

Segment performance was mixed. U.S. Retail Coffee sales grew 15% but saw profit margins contract 900 basis points. U.S. Retail Frozen Handheld and Spreads revenue declined 2% with Uncrustables® as a bright spot. Pet Foods revenue fell 8% with a 12% profit decline. Sweet Baked Snacks showed particular weakness with a 24% revenue decline and 54% profit decrease, partly due to divestitures. Only the International segment posted strong results with 7% higher sales and 35% higher profits.

Despite the profit challenges, management raised full-year sales guidance to 3-5% growth (up from 2-4%), maintained adjusted EPS guidance of $8.50-$9.50, and increased free cash flow guidance to $975 million (from $875 million). This suggests confidence in their ability to improve profitability in coming quarters through pricing actions and cost management.

ORRVILLE, Ohio, Aug. 27, 2025 /PRNewswire/ -- The J.M. Smucker Co. (NYSE: SJM) today announced results for the first quarter ended July 31, 2025, of its 2026 fiscal year. Financial results for the first quarter of fiscal year 2026 reflect the divestiture of certain Sweet Baked Snacks value brands on March 3, 2025, and the divestiture of the Voortman^® business on December 2, 2024. All comparisons are to the first quarter of the prior fiscal year, unless otherwise noted.

EXECUTIVE SUMMARY

• Net sales was $2.1 billion, a decrease of $11.8 million, or 1 percent. Net sales excluding the divestitures and foreign currency exchange increased 2 percent.
• Net loss per diluted share was $0.41. Adjusted earnings per share was $1.90, a decrease of 22 percent.
• Cash used for operating activities was $10.6 million compared to cash provided by operating activities of $172.9 million in the prior year. Free cash flow was ($94.9) million compared to $49.2 million in the prior year.
• The Company updated its full-year fiscal 2026 financial outlook.

CHIEF EXECUTIVE OFFICER REMARKS

"Our first quarter results exceeded our expectations and reflect the continued momentum of the business. Our teams demonstrated agility throughout the organization, and though the external environment continues to be dynamic we are successfully managing what we can control," said Mark Smucker, Chief Executive Officer and Chair of the Board. "Our results reflect strong top-line growth, driven by consumer demand for our portfolio of leading brands, and bottom-line results that reflect disciplined cost management and execution."

"Due to the better-than-expected first quarter results and sustained momentum for our portfolio of leading brands, we are raising our net sales expectations for the fiscal year. We remain focused on investing in our key growth platforms which will enable us to deliver long-term growth and increase shareholder value."

FIRST QUARTER CONSOLIDATED RESULTS

	Three Months Ended July 31,
	2025		2024		% Increase (Decrease)
	(Dollars and shares in millions, except per share data)
Net sales	$2,113.3		$2,125.1		(1) %
Operating income	$45.6		$349.5		(87) %
Adjusted operating income	370.3		447.9		(17) %
Net income (loss) per common share – assuming dilution	($0.41)		$1.74		(124) %
Adjusted earnings per share – assuming dilution	1.90		$2.44		(22) %
Weighted-average shares outstanding – assuming dilution	106.6		106.5		— %

Net Sales

Net sales decreased $11.8 million, or 1 percent. Excluding $52.8 million of noncomparable net sales in the prior year related to divestitures and $0.2 million of unfavorable foreign currency exchange, net sales increased $41.2 million, or 2 percent.

The increase in comparable net sales reflects a 6 percentage point increase from net price realization, primarily driven by higher net pricing for coffee, partially offset by lower net pricing for peanut butter. Comparable net sales also reflects a 4 percentage point decrease from volume/mix, primarily driven by decreases for coffee, dog snacks, sweet baked goods, and fruit spreads and lower contract manufacturing sales related to the divested pet food brands, partially offset by an increase for Uncrustables^® sandwiches.

Operating Income

Gross profit decreased $322.5 million, or 40 percent. The decrease primarily reflects higher commodity costs, inclusive of the net unfavorable impact of derivative gains and losses, unfavorable volume/mix, and the noncomparable impact of divestitures, partially offset by higher net price realization. Operating income decreased $303.9 million, or 87 percent, primarily reflecting the decrease in gross profit, partially offset by a decrease in selling, distribution, and administrative ("SD&A") expenses and lower amortization expense.

Adjusted gross profit decreased $89.3 million, or 11 percent. The difference between adjusted gross profit and generally accepted accounting principles ("GAAP") results primarily reflects the exclusion of the change in net cumulative unallocated derivative gains and losses and special project costs. Adjusted operating income, which further reflects the exclusion of amortization expense and other special project costs as compared to GAAP operating income, decreased $77.6 million, or 17 percent.

Interest Expense and Income Taxes

Net interest expense was comparable to the prior year.

The effective income tax rate was 22.3 percent in the quarter, as compared to 24.8 percent in the prior year. The decrease in the effective income tax rate was primarily due to the impact of a loss before income taxes in the current year, as compared to income before income taxes in the prior year. The adjusted effective income tax rate was 24.2 percent, compared to 24.6 percent in the prior year.

Cash Flow and Debt

Cash used for operating activities was $10.6 million, compared to cash provided by operating activities of $172.9 million in the prior year, primarily reflecting lower net income (loss) and the related impacts to income and other taxes, partially offset by less cash required to fund working capital requirements. Free cash flow was ($94.9) million, compared to $49.2 million in the prior year, reflecting the decrease in cash provided by operating activities, partially offset by a decrease in capital expenditures as compared to the prior year.

FULL-YEAR OUTLOOK

The Company updated its full-year fiscal 2026 guidance, as summarized below.

		Current		Previous
Net sales increase vs. prior year		3.0% to 5.0%		2.0% to 4.0%
Adjusted earnings per share		$8.50 - $9.50		$8.50 - $9.50
Free cash flow (in millions)		$975.0		$875.0
Capital expenditures (in millions)		$325.0		$325.0
Adjusted effective income tax rate		23.8 %		23.7 %

The Company continues to operate in a dynamic and evolving external environment, including tariffs and related trade impacts, regulatory and policy changes, ongoing input inflation, and changes in consumer behaviors that could impact its fiscal year 2026 outlook. This updated guidance reflects the Company's expectations based on its current understanding of these factors.

Net sales are now expected to increase 3.0 to 5.0 percent, which includes an impact of $134.7 million related to the divestitures of the Voortman^® business and certain Sweet Baked Snacks value brands. Comparable net sales are expected to increase approximately 4.5 to 6.5 percent, which excludes the noncomparable sales in the prior year related to the divestitures. The increase in comparable net sales reflects higher net price realization, partially offset by a decline in volume/mix. This guidance also reflects a decline of approximately $38.0 million of contract manufacturing sales related to the divested pet food brands, as the contract manufacturing agreement concluded at the end of fiscal year 2025.

Adjusted earnings per share is expected to range from $8.50 to $9.50. This guidance reflects the increase in net sales, adjusted gross profit margin of approximately 35.0 to 35.5 percent, an increase of SD&A expenses of approximately 3.0 percent versus the prior year, interest expense of approximately $380.0 million, an adjusted effective income tax rate of 23.8 percent, and 106.9 million weighted-average common shares outstanding. Free cash flow is now expected to be approximately $975.0 million at the midpoint of our adjusted earnings per share guidance range, with capital expenditures of $325.0 million.

FIRST QUARTER SEGMENT RESULTS

(Dollar amounts in the segment tables below are reported in millions.)

U.S. Retail Coffee

		Net Sales		Segment Profit		Segment Profit Margin
FY26 Q1 Results		$717.2		$134.2		18.7 %
Increase (decrease) vs. prior year		15 %		(22) %		-900bps

Net sales increased $93.8 million, or 15 percent. Net price realization increased net sales by 18 percentage points, primarily driven by higher net pricing across the portfolio. Volume/mix decreased net sales by 2 percentage points, reflecting decreases for the Dunkin'^® and Folgers^® brands, partially offset by an increase for the Café Bustelo^® brand.

Segment profit decreased $38.4 million, primarily reflecting higher commodity costs, unfavorable volume/mix, and higher marketing spend, partially offset by higher net price realization.

U.S. Retail Frozen Handheld and Spreads

		Net Sales		Segment Profit		Segment Profit Margin
FY26 Q1 Results		$484.7		$114.3		23.6 %
Increase (decrease) vs. prior year		(2) %		(4) %		-40bps

Net sales decreased $12.1 million, or 2 percent. Volume/mix decreased net sales by 2 percentage points, primarily driven by decreases for peanut butter and fruit spreads, partially offset by an increase for Uncrustables^® sandwiches. Net price realization decreased net sales by 1 percentage point, reflecting higher trade spend for peanut butter, partially offset by higher net pricing for Uncrustables^® sandwiches.

Segment profit decreased $4.7 million, primarily driven by higher marketing spend and unfavorable volume/mix, partially offset by lower pre-production expenses primarily related to the new Uncrustables^® sandwiches manufacturing facility.

U.S. Retail Pet Foods

		Net Sales		Segment Profit		Segment Profit Margin
FY26 Q1 Results		$368.0		$101.3		27.5 %
Increase (decrease) vs. prior year		(8) %		(12) %		-130bps

Net sales decreased $31.7 million, or 8 percent. Volume/mix decreased net sales by 8 percentage points, primarily driven by a decrease for dog snacks and lower contract manufacturing sales related to the divested pet food brands. Net price realization was neutral to net sales.

Segment profit decreased $14.0 million, primarily driven by unfavorable volume/mix and higher costs, partially offset by lower marketing spend.

Sweet Baked Snacks

		Net Sales		Segment Profit		Segment Profit Margin
FY26 Q1 Results		$253.2		$34.2		13.5 %
Increase (decrease) vs. prior year‌		(24) %		(54) %		-880bps

Net sales decreased $80.5 million, or 24 percent. Excluding noncomparable net sales in the prior year related to the divested Voortman^® business and certain Sweet Baked Snacks value brands, net sales decreased $27.7 million, or 10 percent. Volume/mix decreased net sales by 8 percentage points, primarily reflecting a decrease for snack cakes. Net price realization decreased net sales by 2 percentage points, primarily reflecting lower net pricing for snack cakes.

Segment profit decreased $40.2 million, primarily reflecting the impact of the noncomparable segment profit in the prior year related to the divested businesses, unfavorable volume/mix, and higher costs.

International and Away From Home

		Net Sales		Segment Profit		Segment Profit Margin
FY26 Q1 Results		$290.2		$65.5		22.6 %
Increase (decrease) vs. prior year		7 %		35 %		470bps

Net sales increased $18.7 million, or 7 percent. Excluding $0.2 million of unfavorable foreign currency exchange, net sales increased $18.9 million, or 7 percent. Net price realization contributed 9 percentage points to net sales, primarily driven by higher net price pricing for coffee and portion control products. Volume/mix decreased net sales by 2 percentage points, primarily driven by decreases for coffee and fruit spreads, partially offset by an increase for Uncrustables^® sandwiches.

Segment profit increased $16.9 million, primarily reflecting higher net price realization and lower SD&A expenses, partially offset by higher costs.

Financial Results Discussion and Webcast

At approximately 7:00 a.m. Eastern Time today, the Company will post to its website at investors.jmsmucker.com a pre-recorded management discussion of its fiscal 2026 first quarter financial results, a transcript of the discussion, and supplemental materials. At 9:00 a.m. Eastern Time today, the Company will webcast a live question-and-answer session with Mark Smucker, Chief Executive Officer and Chair of the Board, and Tucker Marshall, Chief Financial Officer. The live webcast and replay can be accessed at investors.jmsmucker.com.

The J.M. Smucker Co. Forward-Looking Statements

This press release contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by those forward-looking statements. The risks, uncertainties, important factors, and assumptions listed and discussed in this press release, which could cause actual results to differ materially from those expressed, include: the Company's ability to successfully integrate Hostess Brands' operations and employees and to implement plans and achieve financial forecasts with respect to the Hostess Brands' business;  disruption from the acquisition of Hostess Brands by diverting the attention of the Company's management and making it more difficult to maintain business and operational relationships; the negative effects of the acquisition of Hostess Brands on the market price of the Company's common shares; the amount of the costs, fees, expenses, and charges and the risk of litigation related to the acquisition of Hostess Brands; the effect of the acquisition of Hostess Brands on the Company's business relationships, operating results, ability to hire and retain key talent, and business generally; disruptions or inefficiencies in the Company's operations or supply chain, including any impact caused by product recalls, political instability, terrorism, geopolitical conflicts, extreme weather conditions, natural disasters, pandemics, work stoppages or labor shortages, or other calamities; risks related to the availability of, and cost inflation in, supply chain inputs, including labor, raw materials, commodities, packaging, and transportation; the impact of food security concerns involving either the Company's products or its competitors' products, changes in consumer preferences, consumer or other litigation, actions by the U.S. Food and Drug Administration or other agencies, and product recalls; risks associated with derivative and purchasing strategies the Company employs to manage commodity pricing and interest rate risks; the availability of reliable transportation on acceptable terms; the ability to achieve cost savings related to the Company's restructuring and cost management programs in the amounts and within the time frames currently anticipated; the ability to generate sufficient cash flow to continue operating under the Company's capital deployment model, including capital expenditures, debt repayment to meet the Company's deleveraging objectives, dividend payments, and share repurchases; a change in outlook or downgrade in the Company's public credit ratings by a rating agency below investment grade; the ability to implement and realize the full benefit of price changes, and the impact of the timing of the price changes to profits and cash flow in a particular period; the success and cost of marketing and sales programs and strategies intended to promote growth in the Company's businesses, including product innovation; general competitive activity in the market, including competitors' pricing practices and promotional spending levels; the Company's ability to attract and retain key talent; the concentration of certain of the Company's businesses with key customers and suppliers, including primary or single-source suppliers of certain key raw materials and finished goods, and the Company's ability to manage and maintain key relationships; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in the useful lives of other intangible assets or other long-lived assets; the impact of new or changes to existing governmental laws and regulations and their application, including tariffs, food ingredients, food labeling, and food accessibility; the outcome of tax examinations, changes in tax laws, and other tax matters; a disruption, failure, or security breach of the Company or its suppliers' information technology systems, including, but not limited to, ransomware attacks; foreign currency exchange rate and interest rate fluctuations; and risks related to other factors described under "Risk Factors" in other reports and statements filed with the Securities and Exchange Commission, including the Company's most recent Annual Report on Form 10-K. The Company undertakes no obligation to update or revise these forward-looking statements, which speak only as of the date made, to reflect new events or circumstances.

About The J.M. Smucker Co.

At The J.M. Smucker Co., it is our privilege to make food people and pets love by offering a diverse family of brands available across North America. We are proud to lead in the coffee, peanut butter, fruit spreads, frozen handheld, sweet baked goods, dog snacks, and cat food categories by offering brands consumers trust for themselves and their families each day, including Folgers^®, Dunkin'^®, Café Bustelo^®, Jif^®, Uncrustables^®, Smucker's^®, Hostess^®, Milk-Bone^®, and Meow Mix^®. Through our unwavering commitment to producing quality products, operating responsibly and ethically and delivering on our Purpose, we will continue to grow our business while making a positive impact on society. For more information, please visit jmsmucker.com.

The J.M. Smucker Co. is the owner of all trademarks referenced herein, except for Dunkin'^®, which is a trademark of DD IP Holder LLC. The Dunkin'^® brand is licensed to The J.M. Smucker Co. for packaged coffee products sold in retail channels such as grocery stores, mass merchandisers, club stores, e-commerce and drug stores, and in certain away from home channels. This information does not pertain to products for sale in Dunkin'^® restaurants.

The J.M. Smucker Co. Unaudited Condensed Consolidated Statements of Income
		Three Months Ended July 31,
		2025		2024		% Increase (Decrease)
	(Dollars and shares in millions, except per share data)
Net sales		$2,113.3		$2,125.1		(1) %
Cost of products sold		1,638.6		1,327.9		23 %
Gross Profit		474.7		797.2		(40) %
Gross margin		22.5 %		37.5 %
Selling, distribution, and administrative expenses		377.4		390.1		(3) %
Amortization		50.2		56.0		(10) %
Other special project costs		6.0		7.1		(15) %
Other operating expense (income) – net		(4.5)		(5.5)		(18) %
Operating Income		45.6		349.5		(87) %
Operating margin		2.2 %		16.4 %
Interest expense – net		(100.2)		(100.4)		— %
Other income (expense) – net		(1.9)		(3.1)		(39) %
Income (Loss) Before Income Taxes		(56.5)		246.0		(123) %
Income tax expense (benefit)		(12.6)		61.0		(121) %
Net Income (Loss)		($43.9)		$185.0		(124) %
Net income (loss) per common share		($0.41)		$1.74		(124) %
Net income (loss) per common share – assuming dilution		($0.41)		$1.74		(124) %
Dividends declared per common share		$1.10		$1.08		2 %
Weighted-average shares outstanding		106.6		106.3		— %
Weighted-average shares outstanding – assuming dilution		106.6		106.5		— %

 

The J.M. Smucker Co. Unaudited Condensed Consolidated Balance Sheets
	July 31, 2025		April 30, 2025
	(Dollars in millions)
Assets
Current Assets
Cash and cash equivalents	$39.3		$69.9
Trade receivables – net	643.2		619.0
Inventories	1,386.0		1,209.4
Other current assets	333.4		248.3
Total Current Assets	2,401.9		2,146.6
Property, Plant, and Equipment – Net	3,047.0		3,079.6
Other Noncurrent Assets
Goodwill	5,709.4		5,710.0
Other intangible assets – net	6,296.8		6,346.9
Other noncurrent assets	286.8		280.2
Total Other Noncurrent Assets	12,293.0		12,337.1
Total Assets	$17,741.9		$17,563.3
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$1,234.1		$1,288.7
Short-term borrowings	951.6		640.8
Other current liabilities	768.2		722.5
Total Current Liabilities	2,953.9		2,652.0
Noncurrent Liabilities
Long-term debt	7,038.3		7,036.8
Other noncurrent liabilities	1,823.8		1,791.9
Total Noncurrent Liabilities	8,862.1		8,828.7
Total Shareholders' Equity	5,925.9		6,082.6
Total Liabilities and Shareholders' Equity	$17,741.9		$17,563.3

 

The J.M. Smucker Co. Unaudited Condensed Consolidated Statements of Cash Flow
		Three Months Ended July 31,
		2025		2024
	(Dollars in millions)
Operating Activities
Net income (loss)		($43.9)		$185.0
Adjustments to reconcile net income (loss) to net cash provided by (used for) operations:
Depreciation		85.0		73.0
Amortization		50.2		56.0
Share-based compensation expense		9.0		8.9
Deferred income tax expense (benefit)		24.0		2.6
Other noncash adjustments – net		12.7		15.1
Changes in assets and liabilities:
Trade receivables		(24.3)		1.6
Inventories		(177.3)		(99.0)
Other current assets		53.0		2.6
Accounts payable		(33.2)		(61.5)
Accrued liabilities		76.2		(60.9)
Income and other taxes		(41.1)		54.9
Other – net		(0.9)		(5.4)
Net Cash Provided by (Used for) Operating Activities		(10.6)		172.9
Investing Activities
Additions to property, plant, and equipment		(84.3)		(123.7)
Proceeds from disposal of property, plant, and equipment		12.9		—
Collateral pledged for derivative cash margin accounts		(126.7)		(48.6)
Other – net		0.2		(0.1)
Net Cash Provided by (Used for) Investing Activities		(197.9)		(172.4)
Financing Activities
Short-term borrowings (repayments) – net		300.6		96.2
Quarterly dividends paid		(114.4)		(112.1)
Purchase of treasury shares		(4.6)		(2.6)
Other – net		(3.6)		(4.5)
Net Cash Provided by (Used for) Financing Activities		178.0		(23.0)
Effect of exchange rate changes on cash		(0.1)		—
Net increase (decrease) in cash and cash equivalents		(30.6)		(22.5)
Cash and cash equivalents at beginning of period		69.9		62.0
Cash and Cash Equivalents at End of Period		$39.3		$39.5

 

The J.M. Smucker Co. Unaudited Supplemental Schedule
		Three Months Ended July 31,
		2025		% of Net Sales		2024		% of Net Sales
	(Dollars in millions)
Net sales		$2,113.3				$2,125.1
Selling, distribution, and administrative expenses:
Marketing		117.9		5.6 %		108.9		5.1 %
Selling		70.9		3.4 %		75.9		3.6 %
Distribution		69.2		3.3 %		71.5		3.4 %
General and administrative		119.4		5.6 %		133.8		6.3 %
Total selling, distribution, and administrative expenses		$377.4		17.9 %		$390.1		18.4 %
Amounts may not add due to rounding.

 

The J.M. Smucker Co. Unaudited Reportable Segments
		Three Months Ended July 31,
		2025		2024
	(Dollars in millions)
Net sales:
U.S. Retail Coffee		$717.2		$623.4
U.S. Retail Frozen Handheld and Spreads		484.7		496.8
U.S. Retail Pet Foods		368.0		399.7
Sweet Baked Snacks		253.2		333.7
International and Away From Home		290.2		271.5
Total net sales		$2,113.3		$2,125.1
Segment profit:
U.S. Retail Coffee		$134.2		$172.6
U.S. Retail Frozen Handheld and Spreads		114.3		119.0
U.S. Retail Pet Foods		101.3		115.3
Sweet Baked Snacks		34.2		74.4
International and Away From Home		65.5		48.6
Total segment profit		$449.5		$529.9
Amortization		(50.2)		(56.0)
Interest expense – net		(100.2)		(100.4)
Change in net cumulative unallocated derivative gains and losses		(253.1)		(30.0)
Cost of products sold – special project costs		(15.4)		(5.3)
Other special project costs		(6.0)		(7.1)
Corporate administrative expenses		(79.2)		(82.0)
Other income (expense) – net		(1.9)		(3.1)
Income (loss) before income taxes		($56.5)		$246.0
Segment profit margin:
U.S. Retail Coffee		18.7 %		27.7 %
U.S. Retail Frozen Handheld and Spreads		23.6 %		24.0 %
U.S. Retail Pet Foods		27.5 %		28.8 %
Sweet Baked Snacks		13.5 %		22.3 %
International and Away From Home		22.6 %		17.9 %

 

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, including: net sales excluding divestitures and foreign currency exchange; adjusted gross profit; adjusted operating income; adjusted income; adjusted earnings per share; earnings before interest, taxes, depreciation, amortization expense, impairment charges related to intangible assets, and gains and losses on divestitures ("EBITDA (as adjusted)"); and free cash flow, as key measures for purposes of evaluating performance internally. The Company believes that investors' understanding of its performance is enhanced by disclosing these performance measures. Furthermore, these non-GAAP financial measures are used by management in preparation of the annual budget and for the monthly analyses of its operating results. The Board of Directors also utilizes certain non-GAAP financial measures as components for measuring performance for incentive compensation purposes.

Non-GAAP financial measures exclude certain items affecting comparability that can significantly affect the year-over-year assessment of operating results, which include amortization expense and impairment charges related to intangible assets; certain divestiture, acquisition, integration, and restructuring costs ("special project costs"); gains and losses on divestitures; the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities ("change in net cumulative unallocated derivative gains and losses"); and other infrequently occurring items that do not directly reflect ongoing operating results. Income taxes, as adjusted is calculated using an adjusted effective income tax rate that is applied to adjusted income before income taxes and reflects the exclusion of the previously discussed items, as well as any adjustments for one-time tax-related activities, when they occur. While this adjusted effective income tax rate does not generally differ materially from the GAAP effective income tax rate, certain exclusions from non-GAAP results can significantly impact the adjusted effective income tax rate.

These non-GAAP financial measures are not intended to replace the presentation of financial results in accordance with U.S. GAAP. Rather, the presentation of these non-GAAP financial measures supplements other metrics used by management to internally evaluate its businesses and facilitate the comparison of past and present operations and liquidity. These non-GAAP financial measures may not be comparable to similar measures used by other companies and may exclude certain nondiscretionary expenses and cash payments. A reconciliation of certain non-GAAP financial measures to the comparable GAAP financial measure for the current and prior year periods is included in the "Unaudited Non-GAAP Financial Measures" tables. The Company has also provided a reconciliation of non-GAAP financial measures for its fiscal year 2026 outlook.

The J.M. Smucker Co. Unaudited Non-GAAP Financial Measures
		Three Months Ended July 31,
		2025		2024		Increase (Decrease)		%
	(Dollars in millions)
Net sales reconciliation:
Net sales		$2,113.3		$2,125.1		($11.8)		(1) %
Sweet Baked Snacks value brands divestiture		—		(15.7)		15.7		1
Voortman® divestiture		—		(37.1)		37.1		2
Foreign currency exchange		0.2		—		0.2		—
Net sales excluding divestitures and foreign currency exchange		$2,113.5		$2,072.3		$41.2		2 %
Amounts may not add due to rounding.

 

The J.M. Smucker Co. Unaudited Non-GAAP Financial Measures
		Three Months Ended July 31,
		2025		2024
	(Dollars and shares in millions, except per share data)
Gross profit reconciliation:
Gross profit		$474.7		$797.2
Change in net cumulative unallocated derivative gains and losses		253.1		30.0
Cost of products sold – special project costs		15.4		5.3
Adjusted gross profit		$743.2		$832.5
% of net sales		35.2 %		39.2 %
Operating income reconciliation:
Operating income		$45.6		$349.5
Amortization		50.2		56.0
Change in net cumulative unallocated derivative gains and losses		253.1		30.0
Cost of products sold – special project costs		15.4		5.3
Other special project costs		6.0		7.1
Adjusted operating income		$370.3		$447.9
% of net sales		17.5 %		21.1 %
Net income (loss) reconciliation:
Net income (loss)		($43.9)		$185.0
Income tax expense (benefit)		(12.6)		61.0
Amortization		50.2		56.0
Change in net cumulative unallocated derivative gains and losses		253.1		30.0
Cost of products sold – special project costs		15.4		5.3
Other special project costs		6.0		7.1
Adjusted income before income taxes		$268.2		$344.4
Income taxes, as adjusted		64.8		84.9
Adjusted income		$203.4		$259.5
Weighted-average shares outstanding – assuming dilution (A)		106.8		106.5
Adjusted earnings per share – assuming dilution  (A)		$1.90		$2.44

(A)

Adjusted earnings per common share – assuming dilution for the three months ended July 31, 2025 and 2024, was computed using the treasury stock method. Further, for the three months ended July 31, 2025, the weighted-average shares – assuming dilution differed from the Company's GAAP weighted-average common shares outstanding – assuming dilution as a result of the anti-dilutive effect of the Company's stock-based awards, which were excluded from the computation of net loss per share – assuming dilution.

 

The J.M. Smucker Co. Unaudited Non-GAAP Financial Measures
		Three Months Ended July 31,
		2025		2024
	(Dollars in millions)
EBITDA (as adjusted) reconciliation:
Net income (loss)		($43.9)		$185.0
Income tax expense (benefit)		(12.6)		61.0
Interest expense – net		100.2		100.4
Depreciation		85.0		73.0
Amortization		50.2		56.0
EBITDA (as adjusted)		$178.9		$475.4
% of net sales		8.5 %		22.4 %
Free cash flow reconciliation:
Net cash provided by (used for) operating activities		($10.6)		$172.9
Additions to property, plant, and equipment		(84.3)		(123.7)
Free cash flow		($94.9)		$49.2

The following tables provide a reconciliation of the Company's fiscal year 2026 guidance for estimated adjusted earnings per share and free cash flow.

		Year Ending April 30, 2026
		Low		High
Net income per common share – assuming dilution reconciliation:
Net income per common share – assuming dilution		$5.54		$6.54
Change in net cumulative unallocated derivative gains and losses (A)		0.61		0.61
Amortization		1.43		1.43
Special project costs		0.58		0.58
Pension plan termination settlement charge (B)		0.32		0.32
Adjusted effective income tax rate impact		0.02		0.02
Adjusted earnings per share		$8.50		$9.50

(A)	We are unable to project derivative gains and losses on a forward-looking basis as these will vary each quarter based on market conditions and derivative positions taken. The change in unallocated derivative gains and losses in the table above reflects the net impact of the gains and losses that have been recognized in our GAAP results and excluded from non-GAAP results as of July 31, 2025, that are expected to be allocated to non-GAAP results in future periods.
(B)	Represents a non-recurring pre-tax settlement charge related to the termination of one of the Company's U.S. defined benefit pension plans anticipated to be realized during fiscal year 2026 upon settlement of the pension obligations.

		Year Ending April 30, 2026
		(Dollars in millions)
Free cash flow reconciliation:
Net cash provided by operating activities		$1,300.0
Additions to property, plant, and equipment		(325.0)
Free cash flow		$975.0

 

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SOURCE The J.M. Smucker Co.

FAQ

What were SJM's key financial results for Q1 fiscal 2026?

SJM reported net sales of $2.1 billion (down 1%), a net loss per share of $0.41, and adjusted EPS of $1.90 (down 22%). Operating income decreased 87% to $45.6 million.

What is SJM's updated financial guidance for fiscal 2026?

SJM raised net sales growth guidance to 3.0-5.0%, maintained adjusted EPS guidance of $8.50-$9.50, and increased free cash flow forecast to $975 million.

How did SJM's Coffee segment perform in Q1 2026?

The Coffee segment's net sales increased 15% to $717.2 million, driven by 18% higher pricing, though segment profit decreased 22% due to higher commodity costs and unfavorable volume/mix.

What caused SJM's negative free cash flow in Q1 2026?

SJM reported negative free cash flow of $94.9 million, primarily due to lower net income and related impacts to income and other taxes, compared to positive $49.2 million in the prior year.

How did pricing and volume affect SJM's comparable sales?

Comparable sales reflected a 6% increase from net price realization, primarily in coffee, offset by a 4% decrease in volume/mix across coffee, dog snacks, sweet baked goods, and fruit spreads.