The J. M. Smucker Company reported fiscal 2026 second‑quarter net sales of $2.33 billion, up 3% year‑over‑year and 5% on a comparable basis that excludes divestitures and currency effects. Operating income was $418.5 million, while adjusted operating income fell 20% from the prior year, reflecting the impact of higher commodity costs and tariff‑related expenses. GAAP diluted earnings per share were a net loss of $2.26, driven by a one‑time impairment charge, but adjusted EPS stood at $2.10, matching analyst consensus and falling from $2.76 in the same quarter last year.
Margin compression was evident across the company. Adjusted gross profit margin declined 480 basis points to 33.9%, and adjusted operating income margin fell 470 basis points to 16.9%. The drop is largely attributable to increased costs of coffee, pet‑food ingredients, and sweet‑baked goods, as well as tariff impacts on imported coffee beans. Management noted that higher commodity costs and tariff headwinds are weighing on margins, while higher net‑price realization in coffee helped offset some of the pressure.
Segment performance highlights the mixed picture. U.S. Retail Coffee net sales grew 21% year‑over‑year, driven by strong demand for Café Bustelo and other coffee brands. In contrast, U.S. Retail Pet Foods sales fell 8%, and Sweet Baked Snacks sales declined 19%, reflecting weaker demand for Hostess‑acquired products and legacy snack lines. The integration of Hostess continues to add incremental sales, but the segment still faces volume challenges.
The company updated its full‑year 2026 outlook, tightening net‑sales guidance to a 3.5%–4.5% increase and narrowing the range to 5.0%–6.0% on a comparable basis. Adjusted EPS guidance was raised to $8.75–$9.25, a tightening of the range from the previous $8.50–$9.50, but the midpoint remains unchanged. The guidance signals confidence in the company’s growth platforms—Uncrustables, Café Bustelo, and Hostess‑acquired sweet baked goods—while acknowledging the need to manage cost pressures.
Mark Smucker, CEO and Chair, emphasized disciplined cost management and a focus on high‑growth brands. "We are pleased with our second‑quarter results and the positive momentum we are experiencing in our business," he said. He added that the company’s strategy of accelerating organic growth, embedding transformation in everyday operations, and fostering a ‘Be Bold’ mindset is driving the updated outlook. The CEO highlighted the importance of the Uncrustables platform, noting it is on track to become a $1 billion brand, and underscored the role of Hostess integration in expanding the company’s sweet‑baked goods portfolio.
Investors reacted cautiously to the results. While adjusted EPS met consensus estimates, the slight revenue miss and significant margin compression—driven by commodity cost increases and tariff impacts—prompted a measured market response. The company’s guidance, which tightens the net‑sales range but maintains the adjusted EPS midpoint, reflects management’s confidence in sustaining growth amid headwinds.
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