It has been about a month since the last earnings report for Smucker (SJM Quick QuoteSJM - Free Report) . Shares have lost about 7.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Smucker due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for The J. M. Smucker Company before we dive into how investors and analysts have reacted as of late.

SJM Q1 Earnings Beat Estimates on Strong Coffee Sales and Pricing

The J.M. Smucker posted first-quarter fiscal 2027 adjusted earnings per share of $3.24, up 71% year over year, beating the Zacks Consensus Estimate of $2.21. Net sales increased 5% year over year to $2,219.3 million, topping the consensus estimate of $2,105 million. Growth was driven by higher net price realization, favorable volume/mix and tariff refunds received during the quarter.

SJM’s first-quarter adjusted gross profit increased 28% year over year to $950.2 million. Adjusted gross margin expanded to 42.8% from 35.2% in the prior-year quarter, driven by tariff refunds, higher net price realization and favorable volume/mix. Excluding the $115 million benefit from tariff refunds, adjusted gross margin still improved 240 basis points, reflecting underlying progress in profitability.

Adjusted operating income increased 46% year over year to $540.7 million, with adjusted operating margin improving to 24.4% from 17.5%. The rise reflected higher adjusted gross profit, partially offset by increased selling, distribution and administrative expenses, including higher marketing and administrative investments.

Smucker continued to invest in its largest growth platforms during the quarter. Uncrustables delivered 12% net sales growth at the total company level, driven by double-digit volume/mix growth, record quarterly volume and increased household penetration. Cafe Bustelo also posted strong momentum, with total company net sales increasing 23%. Management noted that the brand continues to expand household penetration and remains focused on increasing its presence in the at-home coffee category.

SJM Reports Segment Performance

SJM’s U.S. Retail Coffee segment generated net sales of $807.8 million, up 13% year over year. Higher pricing contributed 10 percentage points of growth, while volume/mix increased 2 percentage points, driven by Dunkin’ and Café Bustelo. Segment profit rose 124% to $300 million, aided by tariff refunds and pricing actions.

The U.S. Retail Frozen Handheld and Spreads segment posted net sales of $499.3 million, up 3% year over year. Growth was supported by Uncrustables, while peanut butter and fruit spreads faced pressure. Segment profit increased 13% to $129.7 million.

The U.S. Retail Pet Foods segment recorded net sales of $371.7 million, up 1% year over year, supported by cat food growth. Segment profit declined 2% to $98.9 million due to higher costs and increased marketing spending.

Sweet Baked Snacks sales decreased 7% to $236.5 million, pressured by lower volume/mix in snack cakes and breakfast products.

Away From Home sales rose 3% to $203.7 million, supported by Uncrustables and fruit spreads. Segment profit increased 19% to $61.2 million, reflecting tariff refunds and favorable volume/mix.

Smucker Raises Fiscal 2027 Outlook

Smucker raised its fiscal 2027 outlook following the better-than-expected first-quarter performance. The company now expects net sales to decline 1% to 2% compared with its previous outlook for a 3% to 4% drop. Adjusted earnings per share guidance was increased to $10.50-$11.00 from $9.75-$10.25. The updated outlook reflects stronger momentum, improved sales expectations and a net benefit of approximately $60 million related to tariff refunds after planned investments in selling, distribution and administrative expenses.

The company also raised its free cash flow outlook to approximately $1,100 million from $1,000 million. Management expects adjusted gross profit margin of approximately 38.75% and capital expenditures of $325 million for fiscal 2027.

SJM generated operating cash flow of $425.7 million in the quarter compared with cash used for operating activities of $10.6 million in the prior-year period. Free cash flow improved to $337.3 million from negative $94.9 million, reflecting higher earnings and lower working capital requirements. The company reduced debt by approximately $230 million during the quarter and reached its leverage target of at or below 3.0X net debt to adjusted EBITDA earlier than expected. Management remains focused on debt reduction while maintaining investments in growth initiatives, dividends and potential share repurchases.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Smucker has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Smucker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.