We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SJM Q2 Earnings Miss Despite Higher Sales, FY26 Guidance Tightened
Read MoreHide Full Article
Key Takeaways
SJM's Q2 earnings fell, while sales rose 3%, with results mixed across key segments.
Higher net price realization lifted comparable sales despite volume and mix declines.
FY26 guidance now calls for 3.5-4.5% sales growth and adjusted EPS of $8.75-$9.25.
The J. M. Smucker Company (SJM - Free Report) came out with second-quarter fiscal 2026 results, wherein earnings declined year over year and missed the Zacks Consensus Estimate. However, net sales increased and came ahead of the consensus mark, backed by solid demand for SJM’s flagship brands.
As the operating landscape remains dynamic, the company remains focused on three core priorities — expanding organic growth, incorporating transformation into everyday work and encouraging a bold mindset.
SJM’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings of $2.10 per share missed the Zacks Consensus Estimate of $2.12. Also, the bottom line slumped 24% from $2.76 reported in the prior-year quarter.
The J. M. Smucker Company Price, Consensus and EPS Surprise
Net sales amounted to $2,330.1 million, which grew 3% year over year and beat the Zacks Consensus Estimate of $2,322 million. Excluding noncomparable net sales of last year associated with divestitures as well as currency movements, net sales jumped 5%. The increase in comparable net sales was driven by an 11-percentage-point boost from net price realization, which was partially offset by a 6-percentage-point decline in volume/mix.
Adjusted gross profit fell 10% due to elevated commodity costs, tariffs, adverse volume/mix, and the noncomparable impact of divestitures, partially offset by better net price realization.
The adjusted operating income fell 20% year over year to $394.3 million as a result of lower adjusted gross profit and escalated SD&A expenses. SD&A expenses rose due to higher marketing investments, somewhat made up by lower pre-production expenses associated with the new Uncrustables sandwiches manufacturing facility.
Decoding SJM’s Segmental Performance
U.S. Retail Coffee: The segment’s sales grew 21% to $848.9 million, backed by higher net price realization (up 27%), while volume/mix declined 6%. The segment’s profit went down 24% to $154.3 million. The consensus estimate for segment sales was pegged at $811.6 million.
U.S. Retail Frozen Handheld and Spreads: Sales in the segment decreased 5% to $461.1 million. The volume/mix negatively impacted net sales by 8 percentage points, and the net price realization pulled up the metric by 3 percentage points. The segment’s profit tumbled 12% to $102.1 million.
U.S. Retail Pet Foods: The segment’s sales fell 7% to $413.2 million. The volume/mix had an 8-percentage-point adverse impact on net sales, while net price realization had a 1-percentage-point positive impact. The segment’s profit grew 2% to $124.4 million. The Zacks Consensus Estimate for segment sales was pegged at $421.1 million.
Sweet Baked Snacks: Sales in the segment were $256.1 million, down 19% year over year. Excluding noncomparable sales related to divestitures, net sales declined 3%. Net sales were pressured by a 2-percentage-point decline in volume/mix and a 1-percentage-point decrease from net pricing realization. The consensus estimate for segment sales was pegged at $247.8 million. Segment profit slumped 69% to $21.8 million in the quarter.
International and Away From Home: Net sales increased 9% to $350.8 million compared with the Zacks Consensus Estimate of $345 million. Excluding unfavorable foreign currency exchange, net sales grew 10%. The volume/mix had a 1-percentage-point positive effect, and the net price realization had a 9-percentage-point positive impact on net sales. The segment’s profit increased 12% to $76.4 million.
SJM’s Financial Health Snapshot
The J. M. Smucker exited the quarter with cash and cash equivalents of $62.8 million, long-term debt of $7,039.8 million and total shareholders’ equity of $6,060.2 million.
Cash from operating activities amounted to $346.5 million for the three months ended Oct. 31, 2025. Free cash flow was $280.2 million.
Free cash flow for fiscal 2026 is still estimated at $975 million, and capital expenditures are expected to be $325 million.
What to Expect From SJM in Fiscal 2026?
SJM is navigating an evolving landscape marked by tariffs, shifting regulatory frameworks, persistent inflationary pressures and evolving consumer spending patterns — all of which may influence its fiscal 2026 performance. Based on the present trends, management revised its fiscal 2026 view.
Fiscal 2026 net sales are anticipated to increase in the range of 3.5-4.5% compared with the previous view of 3-5%. This includes a $134.7 million impact from the sale of the Voortman business and select Sweet Baked Snacks value brands.
SJM anticipates comparable net sales to increase approximately 5-6% compared with the 4.5-6.5% range expected before. This excludes noncomparable sales from the year-ago period related to the divestitures. The comparable sales growth indicates higher net price realization, partially offset by volume/mix declines. Apart from this, the outlook reflects a decrease in contract manufacturing sales of roughly $38 million associated with the divested pet food brands.
The adjusted EPS for fiscal 2026 is now envisioned in the band of $8.75-$9.25 compared with the earlier view of $8.50-$9.50. The Zacks Rank #3 (Hold) company recorded an adjusted EPS of $10.12 in fiscal 2025. Apart from higher net sales, the bottom-line guidance takes into account an adjusted gross profit margin of about 35% and almost in-line SD&A expense levels.
Shares of SJM have lost 5.7% over the past three months compared with the industry’s decline of 8.2%.
Top-Ranked Food Stocks
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 2.5% and 167.6%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 416.2%, on average.
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It sports a Zacks Rank #1 at present. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% from the prior-year levels.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1. CHEF delivered a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 8.1% and 29.3%, respectively, from the prior-year levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
SJM Q2 Earnings Miss Despite Higher Sales, FY26 Guidance Tightened
Key Takeaways
The J. M. Smucker Company (SJM - Free Report) came out with second-quarter fiscal 2026 results, wherein earnings declined year over year and missed the Zacks Consensus Estimate. However, net sales increased and came ahead of the consensus mark, backed by solid demand for SJM’s flagship brands.
As the operating landscape remains dynamic, the company remains focused on three core priorities — expanding organic growth, incorporating transformation into everyday work and encouraging a bold mindset.
SJM’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings of $2.10 per share missed the Zacks Consensus Estimate of $2.12. Also, the bottom line slumped 24% from $2.76 reported in the prior-year quarter.
The J. M. Smucker Company Price, Consensus and EPS Surprise
The J. M. Smucker Company price-consensus-eps-surprise-chart | The J. M. Smucker Company Quote
Net sales amounted to $2,330.1 million, which grew 3% year over year and beat the Zacks Consensus Estimate of $2,322 million. Excluding noncomparable net sales of last year associated with divestitures as well as currency movements, net sales jumped 5%. The increase in comparable net sales was driven by an 11-percentage-point boost from net price realization, which was partially offset by a 6-percentage-point decline in volume/mix.
Adjusted gross profit fell 10% due to elevated commodity costs, tariffs, adverse volume/mix, and the noncomparable impact of divestitures, partially offset by better net price realization.
The adjusted operating income fell 20% year over year to $394.3 million as a result of lower adjusted gross profit and escalated SD&A expenses. SD&A expenses rose due to higher marketing investments, somewhat made up by lower pre-production expenses associated with the new Uncrustables sandwiches manufacturing facility.
Decoding SJM’s Segmental Performance
U.S. Retail Coffee: The segment’s sales grew 21% to $848.9 million, backed by higher net price realization (up 27%), while volume/mix declined 6%. The segment’s profit went down 24% to $154.3 million. The consensus estimate for segment sales was pegged at $811.6 million.
U.S. Retail Frozen Handheld and Spreads: Sales in the segment decreased 5% to $461.1 million. The volume/mix negatively impacted net sales by 8 percentage points, and the net price realization pulled up the metric by 3 percentage points. The segment’s profit tumbled 12% to $102.1 million.
U.S. Retail Pet Foods: The segment’s sales fell 7% to $413.2 million. The volume/mix had an 8-percentage-point adverse impact on net sales, while net price realization had a 1-percentage-point positive impact. The segment’s profit grew 2% to $124.4 million. The Zacks Consensus Estimate for segment sales was pegged at $421.1 million.
Sweet Baked Snacks: Sales in the segment were $256.1 million, down 19% year over year. Excluding noncomparable sales related to divestitures, net sales declined 3%. Net sales were pressured by a 2-percentage-point decline in volume/mix and a 1-percentage-point decrease from net pricing realization. The consensus estimate for segment sales was pegged at $247.8 million. Segment profit slumped 69% to $21.8 million in the quarter.
International and Away From Home: Net sales increased 9% to $350.8 million compared with the Zacks Consensus Estimate of $345 million. Excluding unfavorable foreign currency exchange, net sales grew 10%. The volume/mix had a 1-percentage-point positive effect, and the net price realization had a 9-percentage-point positive impact on net sales. The segment’s profit increased 12% to $76.4 million.
SJM’s Financial Health Snapshot
The J. M. Smucker exited the quarter with cash and cash equivalents of $62.8 million, long-term debt of $7,039.8 million and total shareholders’ equity of $6,060.2 million.
Cash from operating activities amounted to $346.5 million for the three months ended Oct. 31, 2025. Free cash flow was $280.2 million.
Free cash flow for fiscal 2026 is still estimated at $975 million, and capital expenditures are expected to be $325 million.
What to Expect From SJM in Fiscal 2026?
SJM is navigating an evolving landscape marked by tariffs, shifting regulatory frameworks, persistent inflationary pressures and evolving consumer spending patterns — all of which may influence its fiscal 2026 performance. Based on the present trends, management revised its fiscal 2026 view.
Fiscal 2026 net sales are anticipated to increase in the range of 3.5-4.5% compared with the previous view of 3-5%. This includes a $134.7 million impact from the sale of the Voortman business and select Sweet Baked Snacks value brands.
SJM anticipates comparable net sales to increase approximately 5-6% compared with the 4.5-6.5% range expected before. This excludes noncomparable sales from the year-ago period related to the divestitures. The comparable sales growth indicates higher net price realization, partially offset by volume/mix declines. Apart from this, the outlook reflects a decrease in contract manufacturing sales of roughly $38 million associated with the divested pet food brands.
The adjusted EPS for fiscal 2026 is now envisioned in the band of $8.75-$9.25 compared with the earlier view of $8.50-$9.50. The Zacks Rank #3 (Hold) company recorded an adjusted EPS of $10.12 in fiscal 2025. Apart from higher net sales, the bottom-line guidance takes into account an adjusted gross profit margin of about 35% and almost in-line SD&A expense levels.
Shares of SJM have lost 5.7% over the past three months compared with the industry’s decline of 8.2%.
Top-Ranked Food Stocks
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 2.5% and 167.6%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 416.2%, on average.
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It sports a Zacks Rank #1 at present. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% from the prior-year levels.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1. CHEF delivered a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 8.1% and 29.3%, respectively, from the prior-year levels.