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    SJM
    Earnings call· Jan 2026(Q3 FY26)

    J M SMUCKER Q3 FY26 earnings call SJM

    Feb 26, 2026 Source

    Executive summary

    The J. M. Smucker Company Q3 FY26 — Strong Top-Line Growth and Strategic Brand Momentum

    The J. M. Smucker Company delivered strong Q3 FY26 results, driven by robust comparable net sales growth and the continued momentum of key brands like Uncrustables and Cafe Bustelo. The company is actively managing its portfolio, including strategic actions to stabilize the underperforming Sweet Baked Snacks segment, which incurred significant impairment charges. Management remains focused on profitability, debt reduction, and strategic investments in high-growth platforms.

    Highlights

    5

    • Total company comparable net sales increased 8% year-over-year.

    • Uncrustables brand net sales grew 10%, on track to achieve $1 billion annual net sales this fiscal year.

    • Cafe Bustelo brand net sales increased 46% within U.S. retail coffee, with a 20% volume mix increase.

    • Away From Home business grew net sales double digits, expected to reach approximately 10% of total company net sales this fiscal year.

    • Third quarter adjusted EPS was $2.38, reflecting sequential improvement.

    Concerns

    5

    • Sweet Baked Snacks segment net sales decreased 19% (11% excluding noncomparable sales), with segment profit down 78%.

    • Recognized $508 million goodwill impairment and $454 million trademark impairment related to Sweet Baked Snacks.

    • Comparable net sales volume/mix decreased 2 percentage points, primarily driven by sweet baked goods and fruit spreads.

    • U.S. Retail Coffee segment profit decreased 5% due to higher commodity costs and tariffs.

    • Leverage ratio currently stands at 4.1x net debt to adjusted EBITDA.

    Guidance & targets

    20
    CategoryTargetConfidence
    Uncrustables annual net sales
    $1 billion
    high materiality
    High
    Cafe Bustelo annual net sales
    surpass $500 million
    medium materiality
    High
    Away From Home business net sales as % of total
    approximately 10%
    medium materiality
    High
    Annual debt reduction
    $500 million
    high materiality
    High
    Net debt to EBITDA leverage ratio
    at or below 3.0x
    high materiality
    High
    Full-year net sales growth
    3.5% to 4.0%
    high materiality
    High
    Full-year comparable net sales growth (mid-point)
    approximately 5.25%
    high materiality
    High
    Q4 U.S. Retail Coffee net price realization
    approximately 20% increase
    medium materiality
    High
    Q4 U.S. Retail Coffee volume/mix
    high-single-digit volume/mix decline
    medium materiality
    High
    Q4 Sweet Baked Snacks net sales growth
    decline a low-teen percent
    high materiality
    High
    Full-year adjusted gross profit margin
    approximately 35.0%
    high materiality
    High
    Full-year SD&A expenses
    flat-to-slightly-down
    medium materiality
    High
    Full-year total marketing expense as % of net sales
    approximately 5.5%
    medium materiality
    High
    Full-year net interest expense
    approximately $380 million
    medium materiality
    High
    Full-year adjusted effective income tax rate
    24%
    medium materiality
    High
    Full-year weighted-average share count
    106.9 million
    low materiality
    High
    Full-year adjusted EPS
    $8.75 to $9.25
    high materiality
    High
    Full-year free cash flow
    approximately $975 million
    high materiality
    High
    Full-year capital expenditures
    $325 million
    high materiality
    High
    FY27 earnings momentum
    algorithm year, or potentially better
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    U.S. Retail Coffee
    Driven by higher net pricing to recover increased commodity costs. Price elasticity trends favorable to expectations. Profit decreased due to higher commodity costs and tariffs, partially offset by higher net price realization.
    Net price realization: +23 percentage pointsVolume/mix: -1 percentage point (Dunkin and Folgers decreases, Cafe Bustelo increase)
    		increased 23%+23%—decreased 5%
    U.S. Retail Frozen Handheld and Spreads
    Reflects increase for Uncrustables and Jif peanut butter, decrease in Smucker's fruit spreads. Profit increased due to higher net price realization and lower preproduction expenses for Uncrustables facility, partially offset by higher costs and unfavorable volume/mix.
    Net price realization: +2 percentage points (Uncrustables increase, higher trade spend for peanut butter)Volume/mix: neutral (peanut butter increase, fruit spreads decrease)
    		increased 2%+2%—increased 4%
    U.S. Retail Pet Foods
    Reflects decline for Pup-Peroni and lapping contract manufacturing sales. Milk-Bone and Meow Mix grew net sales and volume mix. Profit primarily driven by lower marketing spend.
    Volume/mix: -2 percentage points (lapping contract manufacturing sales, dog snacks decrease, cat food increase)Net price realization: neutral (cat food higher, dog snacks lower)
    		decreased 1%-1%—increased 4%
    Sweet Baked Snacks
    Below expectations due to executional/operational challenges, higher costs, and near-term actions (SKU reduction, Indianapolis facility closure, reduced promotions). Segment profit decreased due to higher costs, unfavorable volume/mix, and higher marketing spend.
    Net sales (ex-Voortman and value brands): -11%Volume/mix: -10 percentage points (snack cakes, donuts, breakfast decreases)Net price realization: neutral
    		decreased 19%-19%—decreased 78%
    International and Away From Home
    Growth driven by Away From Home business. Profit increased due to higher net price realization, partially offset by higher costs, tariffs, and unfavorable volume/mix.
    Net sales (ex-FX): +12%Net price realization: +11 percentage points (coffee)Volume/mix: neutral (Uncrustables, coffee increases; fruit spreads, portion control, cat food, peanut butter decreases)Away From Home business net sales: +15%International business net sales (comparable): +6%
    		increased 12%+12%—increased 17%

    Operational metrics

    28
    Comparable net sales growth
    8%YoY
    Q3 FY26

    Total company comparable net sales increased 8%.

    Net sales growth (ex-contract manufacturing)
    9%YoY
    Q3 FY26

    when excluding contract manufacturing sales related to the divested pet food brands, net sales increased 9% versus the prior year.

    Portfolio dollar share
    nearly 2/3
    Q3 FY26

    Nearly 2/3 of our portfolio is growing or maintaining dollar share while more than 3/4 is growing or maintaining volume share in measured retail channels.

    Portfolio volume share
    more than 3/4
    Q3 FY26

    Nearly 2/3 of our portfolio is growing or maintaining dollar share while more than 3/4 is growing or maintaining volume share in measured retail channels.

    Uncrustables household penetration
    26%
    Q3 FY26

    With household penetration at just 26%, we continue to see a long runway for growth.

    Uncrustables new households
    approximately 3.5 million
    past year

    The brand has added approximately 3.5 million new households over the past year

    Uncrustables protein varieties weekly retail sales
    $1 million
    weekly

    recently achieving $1 million in weekly measured retail dollar sales.

    Uncrustables convenience channel monthly retail sales growth
    tripledYoY
    monthly

    we have tripled monthly measured retail dollar sales for the Uncrustables brand in this channel versus the prior year.

    Cafe Bustelo volume mix growth
    20%YoY
    Q3 FY26

    including a 20% increase in volume mix.

    Milk-Bone Peanut Buttery Bites launch ranking
    #1
    past 4 years

    Milk-Bone Peanut Buttery Bites was the #1 dog snacks launch over the past 4 years

    Meow Mix Gravy Bursts launch ranking
    #1
    2025

    Meow Mix Gravy Bursts ... was the #1 dry innovation launch in the category in 2025.

    Green coffee tariff costs
    $79 million
    Q3 FY26

    Regarding tariffs, we realized approximately $79 million in expense in our third quarter, which primarily impacted our coffee portfolio in U.S. Retail Coffee and International and Away From Home.

    Sweet Baked Snacks SKU reduction
    25%
    Q3 FY26

    reducing our SKU count by 25% to simplify our offerings

    Indianapolis facility closure cost savings
    $10 million
    FY26

    the closure of our Indianapolis manufacturing facility, which will deliver approximately $10 million in cost savings this fiscal year

    Indianapolis facility closure cost savings
    $30 million
    annually

    and $30 million annually

    Away From Home business net sales growth
    15%YoY
    Q3 FY26

    Net sales for the Away From Home business increased 15%

    International business comparable net sales growth
    6%YoY
    Q3 FY26

    Net sales in the International business increased 6% on a comparable basis

    Cash and cash equivalents
    $53 million
    Q3 FY26 end

    We finished the quarter with a cash and cash equivalents balance of $53 million

    Total net debt
    $7.3 billion
    Q3 FY26 end

    and a total net debt balance of $7.3 billion.

    Trailing twelve-month adjusted EBITDA
    approximately $1.8 billion
    TTM

    Our trailing twelve-month adjusted EBITDA is approximately $1.8 billion

    Leverage ratio (Net debt to EBITDA)
    4.1x
    Q3 FY26 end

    our leverage ratio currently stands at 4.1x.

    Sweet Baked Snacks Q4 net sales impact (fire)
    approximately $25 millionreduction
    Q4 FY26

    We estimate the incident will reduce net sales by approximately $25 million in our fourth quarter of this fiscal year

    Full-year net sales guidance headwind (divestitures)
    $135 millionheadwind
    FY26

    This guidance reflects a $135 million headwind from lapping sales of the divested Voortman business and certain Sweet Baked Snacks value brands

    Full-year net sales guidance headwind (contract manufacturing)
    $38 millionimpact
    FY26

    and a $38 million impact from reduced contract manufacturing sales related to the divested pet food brands as the arrangement was exited last fiscal year.

    Depreciation expense
    approximately $350 million
    FY26

    depreciation expense of approximately $350 million

    Amortization expense
    approximately $210 million
    FY26

    amortization expense of approximately $210 million

    Share-based compensation expense
    $35 million
    FY26

    share-based compensation expense of $35 million

    Other non-cash charges
    $100 million
    FY26

    and other non-cash charges of $100 million.

    Industry KPIs

    5
    MetricValueDetails
    Brand platform growthUncrustables: +10%; Cafe Bustelo: +46%; Milk-Bone: +3%; Meow Mix: grew%
    Organic net revenue growth8%%
    Adjusted EPS operating income$2.38USD
    Volume mix vs pricing decomposition10 percentage point increasepercentage points
    Elasticity consumer response commentaryfavorable to our expectations

    Product announcements

    7
    ProductTypeDetails
    Fridge-friendly Uncrustables sandwicheslaunch
    Uncrustables Up & Apple and Bright-Eyed Berrylaunch
    Uncrustables blueberry protein flavorlaunch
    Jif Simplylaunch
    Milk-Bone Peanut Buttery Cupslaunch
    Meow Mix Gravy Bursts Salmon Flavor Cat Foodexpansion
    Meow Mix Gravy Bursts Chicken Flavored Treatsexpansion

    Capital programs

    1
    Indianapolis manufacturing facility closurecompleted

    Benefit: $10 million in cost savings this fiscal year and $30 million annually

    the closure of our Indianapolis manufacturing facility, which will deliver approximately $10 million in cost savings this fiscal year and $30 million annually

    Risks & headwinds

    3
    Sweet Baked Snacks underperformance and revised long-term expectationsNear-term and long-term

    $508 million goodwill impairment, $454 million trademark impairment. Long-term growth rate reduced to 2%.

    Mitigation: SKU count reduction by 25%, closure of Indianapolis manufacturing facility for $30 million annual savings, strategic decision to reduce promotional activity.

    Higher commodity costs and tariffs impacting profitabilityFY26

    $79 million in Q3 expense from tariffs, primarily coffee. U.S. Retail Coffee segment profit decreased 5%.

    Mitigation: Pricing actions in coffee, favorable price elasticity trends. Recent changes to U.S. trade policy to exclude tariffs on green coffee will lap next fiscal year. Moderation in green coffee futures.

    Fire at Emporia, Kansas manufacturing facilityQ4 FY26

    Estimated $25 million reduction in Q4 FY26 net sales.

    Mitigation: Not explicitly stated, but implies business continuity efforts and updated business assumptions.

    What to watch in Q4 FY26

    5

    Sweet Baked Snacks segment profitability

    Next fiscal year (FY27)
    CurrentSegment profit decreased 78% in Q3 FY26.
    TargetImproved profitability and stabilization

    Why it matters

    This segment incurred significant impairment charges and is undergoing restructuring; its recovery is crucial for overall company performance.

    Progress on our Sweet Baked Snacks stabilization strategy will continue to take time. With this in mind, we will take a prudent approach to investments in the business while ensuring we remain focused on our most compelling growth opportunities for the total company. We remain focused on stabilizing performance and improving profitability in the Sweet Baked Snacks segment over time⏳.

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Growth Platforms

    The company's strategy focuses on transforming its portfolio by participating in attractive categories and building strong brands. Key growth drivers include Uncrustables, Cafe Bustelo, Milk-Bone, and Meow Mix, which are receiving prioritized resources and marketing investments to sustain momentum and strengthen long-term value creation potential.

    02

    Uncrustables Brand Momentum

    The Uncrustables brand is on track to achieve $1 billion in annual net sales this fiscal year, driven by 10% net sales growth in Q3. Innovation, such as fridge-friendly sandwiches and protein-focused breakfast varieties, is expanding usage occasions and household penetration, which currently stands at 26%. The brand is also seeing triple-digit growth in the convenience channel.

    03

    Cafe Bustelo's Rapid Expansion

    Cafe Bustelo continues to be a high-growth brand in the at-home coffee category, with Q3 net sales up 46% and volume mix up 20%. The brand is expected to surpass $500 million in net sales this fiscal year, supported by expanded distribution, increased marketing, and new roast profiles appealing to diverse consumers, particularly Gen Z and Millennials.

    04

    Pet Food Portfolio Strength

    Milk-Bone and Meow Mix brands demonstrated strong performance, with Milk-Bone growing 3% in net sales and Meow Mix showing net sales and volume mix increases. The pet food categories benefit from favorable trends like pet humanization, pet population growth, and e-commerce expansion, positioning the company's leading brands for continued success.

    05

    Sweet Baked Snacks Challenges and Restructuring

    The Sweet Baked Snacks segment faced significant challenges, resulting in a 19% net sales decrease and a 78% segment profit decline. The company recognized over $960 million in impairment charges and is implementing actions like a 25% SKU reduction, the closure of its Indianapolis manufacturing facility for $30 million annual savings, and reduced promotional activity to stabilize performance and improve profitability long-term.

    06

    Capital Allocation and Debt Reduction

    The company is committed to disciplined capital deployment, prioritizing organic growth, debt paydown, and shareholder returns. It plans to reduce debt by $500 million annually this fiscal year and next, aiming for a net debt to EBITDA leverage ratio at or below 3.0x by the end of FY27, providing financial flexibility for future capital deployment.

    07

    Leadership and Board Refreshment

    Recent executive leadership changes, including the alignment of business segments under Tucker Marshall and Rob Ferguson, aim to advance growth and profitability. The appointment of Bruce Chung and David Singer as new Independent Directors further strengthens the Board, reflecting a commitment to refreshment and constructive engagement with Elliott Investment Management to support value creation initiatives.

    AI-generated summary of the company’s earnings call. Not investment advice.