The J.M. Smucker Co. (NYSE:SJM) stock traded higher Wednesday after the company reported better-than-expected fiscal first-quarter 2027 results and raised its full-year outlook.
Earnings Snapshot
J.M. Smucker’s adjusted earnings rose 71% to $3.24 per share, beating the $2.22 consensus estimate. The results included an 84-cent benefit from tariff refunds.
Sales rose 5% year over year to $2.22 billion, topping the $2.13 billion estimate. Higher coffee prices contributed 4 percentage points to growth, while volume and product mix added 1 percentage point.
Stronger Uncrustables sandwich and coffee volumes offset weaker demand for sweet baked goods and peanut butter.
The quarter included an 84-cent-per-share benefit from tariff refunds. J.M. Smucker expects a full-year benefit of 60 cents per share and plans to reinvest the proceeds in marketing and selling, general and administrative expenses.
Adjusted gross profit climbed 28% to $950.2 million. Adjusted operating income jumped 46% to $540.7 million.
However, mid-single-digit inflation, mainly from freight and commodity costs, continued to pressure the cost of goods sold.
The company reached its 3-times leverage target ahead of schedule. It is now evaluating share repurchases while continuing to prioritize debt reduction.
Operating cash flow improved to $425.7 million from an outflow of $10.6 million a year earlier. Free cash flow rose to $337.3 million from negative $94.9 million.
Business Performance
U.S. Retail Coffee sales increased 13%, driven by higher prices and growth from the Dunkin’ and Café Bustelo brands. Segment profit rose $165.8 million, primarily reflecting tariff refunds and stronger pricing.
U.S. Retail Frozen Handheld and Spreads sales rose 3%, supported by higher Uncrustables sales. Segment profit increased $15.4 million due to pricing, lower marketing expenses and favorable volume and mix.
U.S. Retail Pet Foods sales grew 1% as stronger cat food demand offset increased trade spending on dog snacks. Segment profit fell $2.4 million because of higher costs and marketing expenses.
Away From Home sales increased 3%, led by Uncrustables sandwiches and fruit spreads. Segment profit rose $9.8 million, helped by tariff refunds and favorable volume and mix.
Sweet Baked Snacks sales fell 7% as lower snack cake and breakfast product volumes outweighed higher prices. Segment profit declined $4.3 million.
Outlook
During the earnings call, J.M. Smucker said it will not cut coffee list prices because commodity costs have not fallen enough or remained lower long enough to warrant a reduction. Instead, the company is passing some of the savings to consumers through increased promotional activity.
J.M. Smucker raised its fiscal 2027 adjusted earnings guidance to $10.50 to $11 per share from $9.75 to $10.25.
The company also lifted its sales forecast to between $8.87 billion and $8.96 billion from $8.69 billion to $8.78 billion. Both forecasts exceeded estimates of $10.05 per share and $8.76 billion, respectively.
J.M. Smucker expects fiscal 2027 sales to decline 1% to 2%, mainly because of lower pricing and flat volume and mix. The company also cited geopolitical, economic, policy and consumer uncertainty.
Coffee volume is expected to decline by a low-single-digit percentage despite recent gains. Meanwhile, the company projects high-single-digit growth for Uncrustables, supported by additional production capacity and marketing.
SJM Price Action: JM Smucker shares were up 4.10% at $130.59 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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