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J M SMUCKER Co (SJM)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered mixed results: adjusted EPS of $2.31 beat consensus ($2.25) while revenue of $2.144B missed ($2.186B); adjusted EBITDA of $499.6M beat estimates ($484.5M) and GAAP results were impacted by $980M of noncash impairments tied to Sweet Baked Snacks and the Hostess trademark .
  • Comparable net sales declined 1% (volume/mix -3 pts, price +3 pts), with pressure in dog snacks and Sweet Baked Snacks, offset by strength in Coffee and Uncrustables; retailer inventory headwinds in Pet and elevated trade recognition in Sweet Baked Snacks weighed on the quarter .
  • FY2026 initial guidance: net sales +2–4%, adjusted EPS $8.50–$9.50, FCF ~$875M, capex ~$325M; assumptions include adjusted gross margin 35.5–36.0%, SD&A +~3%, interest ~$380M, adjusted tax ~23.7% and tariff headwinds (~50 bps to adjusted gross margin; ~$0.25 EPS) .
  • Stock reaction catalysts: EPS beat despite revenue miss, large noncash impairments, cautious FY2026 guide (coffee cost/tariffs), and decisive actions to stabilize Hostess (plant closure, portfolio simplification) could drive narrative shifts around margin durability and execution in Sweet Baked Snacks .

What Went Well and What Went Wrong

What Went Well

  • Coffee strength with disciplined pricing: U.S. Retail Coffee net sales +11% YoY (Folgers and Café Bustelo pricing) and segment profit stable despite higher commodity costs .
    “We continue to demonstrate the ability to recover increased commodity costs through responsible pricing” .
  • Uncrustables momentum: volume growth in Q4; price increase taken (first in >3 years) to recover costs; Alabama facility ramping to support >$1B brand sales by FY2026 .
  • Cash generation: Q4 free cash flow $298.9M; FY2025 FCF $816.6M with adjusted EBITDA TTM ~$2.137B; leverage plan targets ≤3.0x by FY2027 via ~$500M annual debt paydown .

What Went Wrong

  • Sweet Baked Snacks underperformance: comparable net sales -14% and segment profit -72%; impairment charges ($867M goodwill; $112.7M trademark) reflect revised long-term growth to ~3% and slower category recovery; trade recognition elevated in Q4 .
  • Pet softness: U.S. Retail Pet Foods net sales -13% on dog snacks declines and lower contract manufacturing; segment profit -7% despite cost savings; retailer inventory headwinds noted .
  • Revenue miss vs consensus: total net sales $2.144B vs $2.186B expected as volume/mix fell 3 pts across categories (dog snacks, sweet baked goods, spreads) .

Financial Results

MetricQ2 2025Q3 2025Q4 2025
Net Sales ($USD Billions)$2.271 $2.186 $2.144
Gross Margin % (GAAP)39.0% 40.2% 38.4%
Adjusted Gross Profit Margin %38.7% 37.5% 37.5%
Adjusted Operating Income ($USD Millions)490.6 463.8 422.4
Adjusted EPS ($)$2.76 $2.61 $2.31
EBITDA (as adjusted) ($USD Millions)554.3 607.7 499.6
Free Cash Flow ($USD Millions)317.2 151.3 298.9
GAAP Diluted EPS ($)($0.23) ($6.22) ($6.85)
Consensus vs ActualQ3 2025Q4 2025
Primary EPS Consensus Mean vs Actual ($)2.37 vs 2.61 (beat)*2.25 vs 2.31 (beat)*
Revenue Consensus Mean vs Actual ($USD Billions)2.225 vs 2.186 (miss)*2.186 vs 2.144 (miss)*
EBITDA Consensus Mean vs Actual ($USD Millions)505.8 vs 589.5 (beat)*484.5 vs 506.2 (beat)*

Values with asterisks retrieved from S&P Global.

Segment Breakdown

SegmentNet Sales ($USD Millions) Q2 2025Net Sales Q3 2025Net Sales Q4 2025Segment Profit ($USD Millions) Q2 2025Segment Profit Q3 2025Segment Profit Q4 2025Segment Profit Margin Q4 2025
U.S. Retail Coffee704.0 740.6 738.6 202.7 208.6 211.2 28.6%
U.S. Retail Frozen Handheld & Spreads485.2 445.2 449.8 116.1 99.2 91.0 20.2%
U.S. Retail Pet Foods445.4 423.0 395.5 121.4 116.8 106.1 26.8%
Sweet Baked Snacks315.5 278.6 251.0 70.6 54.8 20.0 8.0%
International & Away From Home321.1 298.6 308.9 68.0 61.6 69.2 22.4%

KPIs

KPIQ2 2025Q3 2025Q4 2025
Marketing Expense ($USD Millions; % of Net Sales)$122.1; 5.4% $112.9; 5.2% $124.3; 5.8%
Capex Additions ($USD Millions)$87.0 $88.1 $95.0
Weighted Avg Shares – Diluted (Millions)106.7 106.4 106.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales Increase vs PYFY20258.5%–9.5% (11/26/24) 7.25% (2/27/25) Lowered
Adjusted EPSFY2025$9.70–$10.10 (11/26/24) $9.85–$10.15 (2/27/25) Raised
Free Cash Flow ($USD Millions)FY2025$875 (11/26/24) $925 (2/27/25) Raised
Capital Expenditures ($USD Millions)FY2025$450 (11/26/24) $400 (2/27/25) Lowered
Adjusted Effective Tax RateFY202524.3% (11/26/24) 24.1% (2/27/25) Lowered
Net Sales Increase vs PYFY2026N/A2.0%–4.0% Initial
Adjusted EPSFY2026N/A$8.50–$9.50 Initial
Adjusted Gross Profit MarginFY2026N/A35.5%–36.0% Initial
SD&A Expense GrowthFY2026N/A~3.0% Initial
Interest Expense ($USD Millions)FY2026N/A~$380 Initial
Adjusted Effective Tax RateFY2026N/A23.7% Initial
Free Cash Flow ($USD Millions)FY2026N/A~$875 Initial
Capital Expenditures ($USD Millions)FY2026N/A~$325 Initial

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Coffee pricing/costs and tariffsQ2: price actions to recover coffee input inflation ; Q3: record-high green coffee costs, price hikes; favorable elasticity May price increase implemented; August price hike planned; tariff headwinds contemplated; ~50 bps gross margin impact; ~$0.25 EPS headwind Pricing discipline continues; risk elevated
Sweet Baked Snacks executionQ2: Hostess integration; decisive actions; Voortman divestiture announced ; Q3: impairments; category softness Revised LT growth to ~3%; portfolio simplification; plant closure (Indianapolis) to streamline footprint; trade optimization Stabilizing actions underway after deterioration
Uncrustables expansionQ2: pre-production expenses; distribution/innovation growth ; Q3: brand growth continues Price increase (first in >3 years); Alabama facility ramp; trajectory to >$1B by FY2026 Strong, sustained growth
Pet category dynamicsQ2: margin expansion; mix improvements ; Q3: segment profit +7%; dog snacks down, cat food up Dog snacks weakness; retailer inventory headwinds; cat food Meow Mix momentum Mixed; dog snacks challenged, cat food resilient
Leverage and capital deploymentQ2: higher interest expense on Hostess notes ; Q3: debt paydown not emphasizedNet debt ~$7.6B; leverage 3.6x; ~$500M annual debt paydown; target ≤3.0x by FY2027 Improving balance sheet trajectory

Management Commentary

  • “Our fourth quarter and full-year results underscore the demand for our leading brands… we strengthened our financial position and grew both adjusted earnings per share and free cash flow” — Mark Smucker, CEO .
  • “We are updating our expectations and now anticipate 3% long-term net sales growth for [Sweet Baked Snacks]… narrowing priorities to three key drivers… strengthening the portfolio, elevating our execution, and reigniting sustainable growth” — Mark Smucker .
  • “We recognized an $867 million impairment charge related to the goodwill of the sweet baked snacks reporting unit and a $113 million impairment charge related to the Hostess brand… driven by continued underperformance” — Tucker Marshall, CFO .
  • “We currently purchase ~500 million pounds of green coffee annually… tariff assumptions are an unfavorable impact of ~50 bps to adjusted gross margin” — CFO .

Q&A Highlights

  • The company held a live Q&A webcast following prepared remarks; a Q&A transcript was not available in the document set. Guidance clarifications (elasticity impact ~$0.80 EPS, tariffs ~$0.25 EPS headwind, marketing up ~$40M) were provided within prepared remarks rather than Q&A .

Estimates Context

  • Q4 FY2025: adjusted EPS $2.31 vs $2.25 consensus (beat); revenue $2.144B vs $2.186B (miss); adjusted EBITDA $499.6M vs $484.5M (beat). Q3 FY2025: adjusted EPS $2.61 vs $2.37 (beat); revenue $2.186B vs $2.225B (miss); adjusted EBITDA $607.7M vs $505.8M (beat) .
  • S&P Global consensus inputs used; revisions likely to lower Sweet Baked Snacks growth trajectory, incorporate coffee price elasticity/tariff headwinds, and reflect higher marketing spend in FY2026 guidance.
PeriodEPS Consensus ($)EPS Actual ($)Revenue Consensus ($USD Billions)Revenue Actual ($USD Billions)EBITDA Consensus ($USD Millions)EBITDA Actual ($USD Millions)
Q3 20252.37*2.61 2.225*2.186 505.8*607.7
Q4 20252.25*2.31 2.186*2.144 484.5*499.6

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Mixed print: EPS beat and EBITDA beat offset by revenue miss; noncash impairments reset Sweet Baked Snacks expectations, increasing focus on execution and margin rebuild .
  • Coffee pricing/tariff headwinds central to FY2026 guide; watch elasticity impacts and potential commodity normalization as upside levers .
  • Uncrustables and Café Bustelo remain core growth engines; price and capacity actions support margin durability and top-line expansion into FY2026 .
  • Pet portfolio resilient in cat food; dog snacks and retailer inventory dynamics warrant near-term caution despite structural margin improvements .
  • Hostess turnaround is the swing factor: plant closure and portfolio simplification should aid margin recovery; monitor trade optimization and distribution/merchandising execution .
  • Balance sheet de-leveraging plan (~$500M annual paydown) and strong free cash flow underpin capital deployment flexibility and dividend support .
  • Near-term trading setup: sensitivity to coffee/tariff headlines and Sweet Baked Snacks execution updates; medium-term thesis leans on key platforms, cost/productivity programs, and synergy capture to bridge FY2026 guidance to FY2027 “algorithm year” EPS growth .