J.M. Smucker reported fiscal 2026 third‑quarter revenue of $2.339 billion, up 7 % year‑over‑year, and adjusted earnings per share of $2.38, beating the consensus estimate of $2.27 by $0.11. The revenue beat was driven by a 23 % jump in U.S. Retail Coffee sales to $908.2 million, largely attributable to higher net pricing. The company’s Frozen Handheld and Spreads segment grew 2 % to $454.0 million, while Pet Foods sales slipped 1 % to $417.1 million and Sweet Baked Snacks sales fell 19 % to $224.8 million, reflecting ongoing integration challenges from the Hostess acquisition.
The company’s operating margin contracted to 18.4 % from 21.2 % in the prior year, and gross margin fell to 35.4 % from 40.2 %. Margin compression was driven by higher commodity costs, tariff impacts, and a shift toward lower‑margin Sweet Baked Snacks products. Despite the margin squeeze, the company’s pricing power in coffee and the scale of its Frozen Handheld and Spreads business helped offset the decline in Pet Foods and Sweet Baked Snacks revenue.
J.M. Smucker reaffirmed its full‑year 2026 guidance, maintaining a net sales outlook of $9.03 billion to $9.12 billion and adjusted EPS guidance of $8.75 to $9.25. The guidance reflects a 3.5 % to 4.0 % net sales growth forecast, with comparable net sales projected to rise 5.0 % to 5.5 %. The company also reiterated its commitment to $500 million in annual debt paydown and a free‑cash‑flow target of $975 million, underscoring its focus on deleveraging and shareholder returns.
Management highlighted that the slight adjustment to the net sales growth outlook was prompted by a fire at the Emporia, Kansas manufacturing facility, which caused a modest impact on production capacity. The company also noted that integration of Hostess Brands continues to present challenges, particularly in the Sweet Baked Snacks segment, where impairment charges and brand consolidation have weighed on performance. Mark Smucker emphasized the company’s disciplined cost management and pricing strategy as key to sustaining earnings momentum.
Analysts noted the earnings beat but expressed caution over margin compression and the ongoing Hostess integration costs. While the company’s strong coffee segment and disciplined pricing helped deliver the EPS beat, the decline in Sweet Baked Snacks and the impact of the Emporia fire suggest that management will need to continue focusing on cost control and integration execution to preserve profitability in the coming quarters.
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