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.
Can SJM's Raised 2027 Outlook Turn Earnings Momentum Into Growth?
Read MoreHide Full Article
Key Takeaways
SJM raised fiscal 2027 adjusted EPS guidance to $10.50-$11.00 after a 71% first-quarter earnings increase.
Smucker improved its sales outlook to a 1%-2% decline, while companywide volume/mix is expected to stay flat.
SJM lifted free cash flow guidance to about $1.1 billion and reduced debt by roughly $230 million.
The J.M. Smucker Co. (SJM - Free Report) entered fiscal 2027 with stronger earnings momentum after first-quarter results exceeded expectations and management raised its full-year sales, adjusted earnings and free cash flow outlooks.
The next test is durability. Better profitability, lower coffee costs and expanding brands support the earnings case, but companywide sales are still expected to decline and growth remains concentrated in a few businesses.
First-quarter adjusted earnings rose 71% year over year to $3.24 per share, topping the Zacks Consensus Estimate of $2.21. Net sales increased 5% to $2.22 billion, supported by higher pricing and favorable volume/mix.
Tariff refunds also lifted the quarter. SJM received about $115 million of refunds, contributing 84 cents per share to adjusted earnings, making the underlying operating improvement important when assessing earnings durability.
Image Source: Zacks Investment Research
Smucker Raises Its Full-Year Earnings Outlook
Management lifted fiscal 2027 adjusted earnings guidance to $10.50-$11.00 per share from $9.75-$10.25. The sales outlook improved to a decline of 1%-2% from the prior forecast for a 3%-4% drop.
The revised guidance reflects stronger momentum and better sales expectations, but it still assumes roughly flat companywide volume/mix. That keeps the focus on whether growth platforms can offset lower coffee pricing and portfolio weakness.
SJM's Cash Flow Outlook Adds Financial Flexibility
Free cash flow guidance increased to approximately $1.1 billion from $1 billion after first-quarter free cash flow reached $337.3 million. SJM also reduced debt by roughly $230 million during the quarter.
Those actions helped the company reach its target of no more than 3.0X net debt to adjusted EBITDA earlier than planned. The stronger cash outlook supports growth investment while leaving room for further debt reduction and shareholder returns.
Smucker's Underlying Margins Show Improvement
Adjusted gross margin expanded 760 basis points in the first quarter. Excluding tariff refunds, the increase was still 240 basis points, indicating profitability improved beyond the one-time benefit.
Lower green coffee costs are expected to support fiscal 2027 cost deflation, although SJM plans to pass some savings to consumers through lower pricing. Higher administrative, marketing and pre-production spending will also limit how much cost relief reaches earnings.
SJM Must Convert Investment Into Broader Volume Growth
Selling, distribution and administrative expenses are projected to rise about 8% in fiscal 2027. Marketing is expected to equal 5.7% of sales, up about $45 million from fiscal 2026, while the second phase of the McCalla, AL, facility is set to support more Uncrustables capacity.
General Mills, Inc. (GIS - Free Report) reported flat organic net sales in its fiscal 2027 first quarter while continuing to invest in brands and innovation. The Kraft Heinz Company (KHC - Free Report) posted a 1.3% decline in second-quarter 2026 organic net sales and raised planned investment spending, showing why brand support must translate into sustainable volume.
SJM's Growth Score Reflects Rising Expectations
The bottom line is that Smucker's raised outlook improves the fiscal 2027 earnings setup, but durable growth still requires wider volume participation. Uncrustables and Cafe Bustelo are expanding, while Sweet Baked Snacks and parts of Pet Foods need more consistent improvement.
SJM currently carries a Zacks Rank #3 (Hold), with a Growth Score of A, VGM Score of A, Value Score of B and Momentum Score of F. Favorable growth, composite and value characteristics contrast with weak momentum, leaving execution and broader operating progress central to the stock's near-term profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Can SJM's Raised 2027 Outlook Turn Earnings Momentum Into Growth?
Key Takeaways
The J.M. Smucker Co. (SJM - Free Report) entered fiscal 2027 with stronger earnings momentum after first-quarter results exceeded expectations and management raised its full-year sales, adjusted earnings and free cash flow outlooks.
The next test is durability. Better profitability, lower coffee costs and expanding brands support the earnings case, but companywide sales are still expected to decline and growth remains concentrated in a few businesses.
The J. M. Smucker Company Revenue (Quarterly)
The J. M. Smucker Company revenue-quarterly | The J. M. Smucker Company Quote
SJM's Earnings Beat Reset Fiscal 2027 Expectations
First-quarter adjusted earnings rose 71% year over year to $3.24 per share, topping the Zacks Consensus Estimate of $2.21. Net sales increased 5% to $2.22 billion, supported by higher pricing and favorable volume/mix.
Tariff refunds also lifted the quarter. SJM received about $115 million of refunds, contributing 84 cents per share to adjusted earnings, making the underlying operating improvement important when assessing earnings durability.
Image Source: Zacks Investment Research
Smucker Raises Its Full-Year Earnings Outlook
Management lifted fiscal 2027 adjusted earnings guidance to $10.50-$11.00 per share from $9.75-$10.25. The sales outlook improved to a decline of 1%-2% from the prior forecast for a 3%-4% drop.
The revised guidance reflects stronger momentum and better sales expectations, but it still assumes roughly flat companywide volume/mix. That keeps the focus on whether growth platforms can offset lower coffee pricing and portfolio weakness.
SJM's Cash Flow Outlook Adds Financial Flexibility
Free cash flow guidance increased to approximately $1.1 billion from $1 billion after first-quarter free cash flow reached $337.3 million. SJM also reduced debt by roughly $230 million during the quarter.
Those actions helped the company reach its target of no more than 3.0X net debt to adjusted EBITDA earlier than planned. The stronger cash outlook supports growth investment while leaving room for further debt reduction and shareholder returns.
Smucker's Underlying Margins Show Improvement
Adjusted gross margin expanded 760 basis points in the first quarter. Excluding tariff refunds, the increase was still 240 basis points, indicating profitability improved beyond the one-time benefit.
Lower green coffee costs are expected to support fiscal 2027 cost deflation, although SJM plans to pass some savings to consumers through lower pricing. Higher administrative, marketing and pre-production spending will also limit how much cost relief reaches earnings.
SJM Must Convert Investment Into Broader Volume Growth
Selling, distribution and administrative expenses are projected to rise about 8% in fiscal 2027. Marketing is expected to equal 5.7% of sales, up about $45 million from fiscal 2026, while the second phase of the McCalla, AL, facility is set to support more Uncrustables capacity.
General Mills, Inc. (GIS - Free Report) reported flat organic net sales in its fiscal 2027 first quarter while continuing to invest in brands and innovation. The Kraft Heinz Company (KHC - Free Report) posted a 1.3% decline in second-quarter 2026 organic net sales and raised planned investment spending, showing why brand support must translate into sustainable volume.
SJM's Growth Score Reflects Rising Expectations
The bottom line is that Smucker's raised outlook improves the fiscal 2027 earnings setup, but durable growth still requires wider volume participation. Uncrustables and Cafe Bustelo are expanding, while Sweet Baked Snacks and parts of Pet Foods need more consistent improvement.
SJM currently carries a Zacks Rank #3 (Hold), with a Growth Score of A, VGM Score of A, Value Score of B and Momentum Score of F. Favorable growth, composite and value characteristics contrast with weak momentum, leaving execution and broader operating progress central to the stock's near-term profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.