Company Overview - JM Smucker (SJM) is an Ohio-based company known for coffee (Folgers) and peanut butter and jelly products [8] - The company acquired Hostess about two years ago [3] Financial Performance & Valuation - The stock was down $16, with 105-106 million shares outstanding [4] - The stock price is $94 [4] - The company has a $1 billion product line that is growing substantially [4] - Current year earnings are projected at $850 million, below street estimates [5] - The company paid $55 billion (55 * 10^9) for the Hostess acquisition [6] - Potential for $12 in earnings if coffee pricing improves, Uncrustables continue to grow, and debt is reduced [6] Challenges & Risks - The company faces headwinds from GLP drugs and other trends [3] - The Hostess acquisition timing was not ideal, and the price was high [6][8] - Cash flow barely covers interest expense related to the acquisition [6] Opportunities & Outlook - Uncrustables (peanut butter and jelly sandwiches) are a key product [1][4][6] - There is an opportunity to reprice their coffee products [6] - Despite a recent misstep, the company has a history of successful ventures [7] - The current stock price presents a buying opportunity for long-term investors [8]

Financial Performance - J. M. Smucker Company reported fourth-quarter earnings of $2.31 per share, exceeding the analyst consensus estimate of $2.24 per share [1] - Quarterly sales were reported at $2.14 billion, which fell short of the analyst consensus estimate of $2.18 billion [1] Management Commentary - CEO Mark Smucker highlighted the demand for the company's leading brands and the resilience of the business, noting improvements in financial position, adjusted earnings per share, and free cash flow [2] - The company invested in its business, paid down debt, and returned cash to shareholders through dividends [2] Future Guidance - For fiscal year 2026, J. M. Smucker forecasts adjusted earnings per share between $8.50 and $9.50, which is below the analyst consensus of $10.26 [2] - The company anticipates net sales growth of 2% to 4% for the upcoming fiscal year [2] Stock Performance and Analyst Ratings - Following the earnings announcement, J. M. Smucker shares increased by 1.8% to trade at $96.11 [3] - Analysts have adjusted their price targets, with Jefferies upgrading the stock from Hold to Buy and lowering the price target from $118 to $115 [8] - Wells Fargo maintained an Overweight rating while lowering the price target from $135 to $115, and B of A Securities maintained a Neutral rating with a price target reduction from $118 to $105 [8]

Vladimir Dimitrov, CFA is a former strategy consultant within the field of brand and intangible assets valuation. During his career in the City of London he has been working with some of the largest global brands within the technology, telecom and banking sectors. He graduated from the London School of Economics and is interested in finding reasonably priced businesses with sustainable long-term competitive advantages.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of t ...

Core Insights - The J. M. Smucker Company (SJM) reported fourth-quarter fiscal 2025 results, with net sales missing estimates while adjusted earnings exceeded expectations, both metrics showing a year-over-year decline [1][3][10] Financial Performance - Adjusted earnings per share (EPS) were $2.31, down 13% year over year, but above the Zacks Consensus Estimate of $2.25 [3][10] - Net sales totaled $2,143.8 million, a 3% decline year over year, missing the Zacks Consensus Estimate of $2,191 million [3][10] - Excluding noncomparable sales from divestitures and currency impacts, net sales decreased by 1%, attributed to a 3% drop in volume/mix, partially offset by a 3% increase in net price realization [3][10] Segment Performance - U.S. Retail Pet Foods: Sales fell 13% to $395.5 million, with an 11-percentage-point negative impact from volume/mix [5] - U.S. Retail Coffee: Sales increased 11% to $738.6 million, driven by a 10% rise in net price realization [6] - U.S. Retail Frozen Handheld and Spreads: Sales decreased slightly to $449.8 million, with a profit drop of 5% to $91 million [7] - Sweet Baked Snacks: Sales were $251 million, down 26% year over year, with a profit decline of 72% to $20 million [8] - International and Away From Home: Sales increased 3% to $308.9 million, with a profit increase of 13% to $69.2 million [9] Financial Health - Cash and cash equivalents stood at $69.9 million, with long-term debt of $7,036.8 million and total shareholders' equity of $6,082.6 million [11] - Operating cash flow was $393.9 million, and free cash flow was $298.9 million for the quarter [11] Future Outlook - For fiscal 2026, SJM anticipates net sales growth of 2-4%, factoring in the impact of recent divestitures [13] - Comparable net sales are expected to rise approximately 3.5-5.5%, driven by higher net price realization, despite volume/mix declines [14] - Adjusted EPS guidance for fiscal 2026 is set between $8.50 and $9.50, down from $10.12 in fiscal 2025 [15]

Core Insights - Smucker (SJM) reported revenue of $2.14 billion for the quarter ended April 2025, reflecting a decrease of 2.8% year-over-year and a surprise of -2.18% compared to the Zacks Consensus Estimate of $2.19 billion [1] - The company's EPS was $2.31, down from $2.66 in the same quarter last year, with an EPS surprise of +2.67% against the consensus estimate of $2.25 [1] Financial Performance Metrics - U.S. Retail Frozen Handheld and Spreads net sales were $449.80 million, slightly below the estimated $462.28 million, marking a year-over-year decline of -0.2% [4] - U.S. Retail Coffee net sales reached $738.60 million, exceeding the average estimate of $715.26 million, with a year-over-year increase of +10.9% [4] - U.S. Retail Pet Foods net sales were $395.50 million, below the estimated $433.66 million, representing a year-over-year decline of -12.6% [4] - International and Away From Home net sales were $308.90 million, slightly below the estimate of $310.83 million, with a year-over-year increase of +3.1% [4] - Sweet Baked Snacks net sales were $251 million, below the estimated $270.36 million, reflecting a significant year-over-year decline of -25.5% [4] Segment Profit Analysis - Segment profit for Sweet Baked Snacks was $20 million, significantly lower than the average estimate of $53.95 million [4] - Segment profit for U.S. Retail Coffee was $211.20 million, exceeding the average estimate of $182.87 million [4] - Corporate administrative expenses were reported at -$75.10 million, better than the average estimate of -$93.98 million [4] - Segment profit for U.S. Retail Frozen Handheld and Spreads was $91 million, slightly below the average estimate of $93.28 million [4] - Segment profit for International and Away From Home was $69.20 million, surpassing the average estimate of $62.50 million [4] - Segment profit for U.S. Retail Pet Foods was $106.10 million, below the average estimate of $115.33 million [4] Stock Performance - Smucker's shares have returned -0.6% over the past month, while the Zacks S&P 500 composite has increased by +6.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - The J. M. Smucker Company held its Fiscal 2025 Fourth Quarter Earnings Conference Call on June 10, 2025, at 9:00 AM ET, featuring key executives including the CEO and CFO [1][2]. Group 1 - The conference call was initiated by Crystal Beiting, the Vice President of Investor Relations and Financial Planning and Analysis, who welcomed participants and mentioned the availability of results on the corporate website [3]. - The call included a question-and-answer session, allowing analysts from various financial institutions to engage with the company's management regarding the earnings report [1][2].

Core Viewpoint - J.M. Smucker Company (NYSE:SJM) experienced a significant decline of 12.7% to $97.65 following a disappointing annual profit forecast, despite fiscal fourth-quarter earnings exceeding estimates, while revenue fell short of expectations [1] Group 1: Financial Performance - The company's stock is at its lowest level since March 2020, breaking past its February bottom, indicating a severe market reaction [1] - J.M. Smucker is on track for its worst trading day on record, with a year-over-year deficit of 12.1% [1] Group 2: Options Activity - In the options market, SJM has seen an unusually high volume of trades, with 6,298 calls and 5,517 puts, which is 42 times the typical volume for this time [2] - The most popular options are the June 95 call and the 100 call, with new positions being opened in both [2] Group 3: Analyst Sentiment - Analysts are generally bearish on SJM, with many maintaining neutral ratings following the company's guidance; out of 16 firms, 11 have a "hold" or worse rating [2]

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About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Data and Key Metrics Changes - The company expects adjusted earnings per share (EPS) to be lower year over year at the midpoint, with a guidance range of $9, impacted by $0.80 from coffee inflation and $0.25 from tariffs [8][10][60] - Free cash flow for FY 2025 was reported at $817 million, approximately $100 million below expectations, primarily due to green coffee inflation and higher inventory balances [99] Business Line Data and Key Metrics Changes - The Sweet Baked Snacks segment is expected to see a decline in segment profit, contributing an additional $0.20 impact to EPS guidance [10] - The coffee segment is projected to have around 20% net pricing factored into the FY 2026 outlook, with a negative 10% volume impact due to price elasticity [13][35] Market Data and Key Metrics Changes - The company has observed a strong performance in the coffee portfolio, particularly with brands like Cafe Bustelo and Dunkin', which have stabilized due to normalized pricing [43] - The pet portfolio experienced a $20 million impact from inventory destocking at certain retailers, but overall momentum remains strong [93] Company Strategy and Development Direction - The company is focusing on optimizing its portfolio and investing in core brands like Donuts and Cupcakes to drive growth [20][21] - A strategic shift has been made to strengthen the core brands and improve execution through dedicated sales forces and streamlined operations [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need for cautious guidance due to external factors impacting profitability, including coffee inflation and tariffs [10][60] - The company remains optimistic about future growth opportunities, particularly through key growth platforms and brand building efforts [102] Other Important Information - The long-term growth rate for the Sweet Baked Snacks portfolio has been revised from 4% to 3%, reflecting a more conservative outlook based on category performance [31] - The company plans to address tariff impacts through pricing strategies and cost management efforts [53] Q&A Session Summary Question: Impact of higher green coffee costs on EPS growth - Management confirmed that higher green coffee costs and tariffs have significantly impacted EPS guidance, leading to a more subdued outlook [8][10] Question: Details on Hostess SKU and display rationalizations - Management emphasized the focus on core brands like Donuts and Cupcakes, indicating a need to optimize the portfolio for growth [19][20] Question: Pricing strategy for coffee segment - The company is implementing pricing across the entire coffee portfolio, with a significant focus on green coffee pricing [35] Question: Expectations for Sweet Baked Snacks performance - Management expects improvement in the Sweet Baked Snacks portfolio in the back half of the year due to stabilization efforts and easier comparisons [36][38] Question: Free cash flow guidance for FY 2026 - The company anticipates free cash flow of $875 million for FY 2026, driven by lower capital expenditures and effective working capital management [99][100]