Financial Data and Key Metrics Changes - The company increased its free cash flow outlook from $875 million to $975 million for the full fiscal year, driven by benefits from the One Big Beautiful Bill Act, which is expected to be an ongoing annual benefit [40][41] - The midpoint guidance for the full year remains at $9, with expectations for overall growth despite increased tariffs impacting costs [10][11] Business Line Data and Key Metrics Changes - The coffee segment's pricing outlook has improved to the mid-20s percentage range, with anticipated volume impacts in the low to mid-teens, leading to overall growth for the segment year over year [8][11] - Milk Bone is expected to return to growth in the second half of the fiscal year, supported by advertising and innovation, despite cautious consumer spending in discretionary categories [18][19] - The Sweet Baked Snacks segment is undergoing SKU rationalization, with expected savings of $30 million, which will begin to impact profitability in the fourth quarter [31][32] Market Data and Key Metrics Changes - The company is seeing ongoing momentum in its coffee portfolio, with strong performance expected in the fourth quarter, which is projected to have the highest margins [34][36] - The away-from-home business continues to show positive trends, contributing to overall growth [44] Company Strategy and Development Direction - The company is focused on strategic investments, consumer-led innovation, and shifting its portfolio towards growth, while managing controllable factors and reacting positively to external challenges [75] - The dedicated sales organization aims to enhance execution and focus on key areas to drive growth [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the impact of increased tariffs on coffee but remains optimistic about the resilience of the coffee category and the strength of its brands [58][60] - The company is monitoring the impact of GLP-1 drugs on consumer behavior but has not seen a meaningful effect on its product categories thus far [50][62] Other Important Information - The company plans to achieve a three times leverage profile by the end of fiscal 2027 through ongoing debt paydown efforts [41] - The company is actively engaging with industry associations to advocate for favorable trade policies and tariff relief [49] Q&A Session Summary Question: Updated expectations on coffee pricing due to tariffs - The coffee segment's pricing outlook is now in the mid-20s, with additional pricing actions expected in early winter due to increased tariffs [8] Question: Changes in EPS guidance and quarterly performance - The overall profit outlook for coffee remains intact, with some profit shifting to the third and fourth quarters due to timing of costs [29] Question: Impact of SKU rationalization on volume - SKU rationalization did not impact volume in the first quarter, and the company expects to see improvements in profitability over time [25][32] Question: Future visibility and confidence in fiscal 2027 - The company has a positive outlook for fiscal 2027, driven by strong margins in the coffee portfolio and growth in key brands [34] Question: Impact of GLP-1 drugs on consumer behavior - Management has not observed a significant impact from GLP-1 drugs on its product categories, as consumer preferences remain stable [50][62]

Financial Performance - Net sales decreased by 1% to $2,113.3 million[5] - Comparable net sales increased by 2%[2] - Adjusted earnings per share decreased by 22% to $1.90[2, 5] - Free cash flow was ($94.9) million, a decrease compared to $49.2 million in the prior year[2] - Adjusted gross profit decreased by 11% to $743.2 million[5] - Adjusted operating income decreased by 17% to $370.3 million[5] Segment Performance - U S Retail Coffee net sales increased by 15% to $717.2 million[14] - Sweet Baked Snacks net sales decreased by 24% to $253.2 million[14] - International and Away From Home net sales increased by 7% to $290.2 million[14] Fiscal Year 2026 Outlook - The company updated its full-year fiscal 2026 financial outlook[3] - Net sales are expected to increase by 3% to 5%[16] - Free cash flow is projected to be $975 million[16]

Financial Data and Key Metrics Changes - Total company comparable net sales increased by 2%, and when excluding contract manufacturing sales related to divested pet food brands, net sales increased by 3% compared to the prior year [6][31] - Adjusted gross profit decreased by $89 million or 11% compared to the prior year, reflecting higher commodity costs and unfavorable volume mix [33] - Adjusted earnings per share was $1.90, a decrease of 22% versus the prior year, driven by reduced gross profit and increased marketing investments [35][48] Business Line Data and Key Metrics Changes - Uncrustables brand grew net sales in double digits, driven by national advertising and distribution gains [7][11] - Cafe Bustelo brand net sales increased by 36%, with a 17% increase in volume mix [11] - Milk Bone brand experienced a decline in net sales due to lapping prior year distribution gains, while Meow Mix brand saw an increase in volume mix [12][13] - Sweet Baked Snacks segment net sales decreased by 24%, primarily driven by a decrease in snack cakes [38] Market Data and Key Metrics Changes - In the U.S. retail coffee segment, net sales increased by 15%, with net price realization contributing an 18 percentage point increase [35] - Pet foods segment net sales decreased by 8%, reflecting declines in dog snacks and contract manufacturing sales related to divested brands [37] - International and away from home segment net sales grew by 7%, driven by strong performance in the away from home business [27][39] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation, and fostering a bold mindset [5][18] - Actions include prioritizing resources towards key growth platforms and optimizing SKU counts to improve operational efficiencies [14][15] - The company aims to generate over $1 billion in free cash flow annually and has achieved $100 million in total run rate synergies from the Hostess Brands acquisition [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains dynamic, with ongoing input inflation and changes in consumer behavior impacting outlook [42] - The company anticipates net sales to increase by 3% to 5% for the fiscal year, reflecting improved price elasticity of demand assumptions [42][43] - Management remains confident in the long-term growth outlook and the ability to deliver shareholder value despite external challenges [29][49] Other Important Information - The company plans to prioritize debt reduction, aiming to pay down approximately $500 million of debt in each of the next two fiscal years [41] - Free cash flow projection has been increased by $100 million to approximately $975 million, driven by accelerated R&D and tax deductions [47] Q&A Session Summary Question: What are the expectations for the coffee segment given the current inflationary pressures? - Management indicated that the coffee category remains resilient despite inflation, with approximately 70% of coffee drinking occasions occurring at home, providing an affordable alternative to coffee shops [22][29] Question: How is the company addressing the challenges in the Sweet Baked Snacks segment? - The company is taking decisive actions to stabilize the Hostess brand, including SKU optimization and closing a manufacturing facility to improve margins and operational efficiencies [14][15] Question: What is the outlook for the pet food segment? - Management expressed confidence in the long-term growth outlook for the pet portfolio, driven by positive pet population trends and premiumization opportunities [25][29]

Financial Data and Key Metrics Changes - The company reported a 1% decrease in net sales for the first quarter, while comparable net sales increased by 2%, excluding prior year sales related to divested businesses and foreign currency exchange [31] - Adjusted gross profit decreased by $89 million or 11% compared to the prior year, primarily due to higher commodity costs and unfavorable volume mix [33] - Adjusted earnings per share was $1.90, a decrease of 22% versus the prior year, but exceeded expectations due to better-than-anticipated net sales [34] Business Line Data and Key Metrics Changes - In the US retail coffee segment, net sales increased by 15%, driven by an 18 percentage point increase from net price realization [34] - The US retail pet foods segment saw a decrease in net sales by 8%, primarily due to a decline in dog snacks and lower contract manufacturing sales related to divested pet food brands [36] - The Sweet Baked Snacks segment experienced a 24% decrease in net sales, with a 54% decrease in segment profit reflecting unfavorable volume mix and higher costs [37] Market Data and Key Metrics Changes - The away from home business grew net sales by 14% on a comparable basis, driven by coffee and Uncrustables sandwiches [39] - International net sales decreased by 6% on a comparable basis, primarily reflecting a decrease in the coffee portfolio [39] - The company anticipates a higher US tariff impact on green coffee costs, which is expected to be a 50¢ headwind for the fiscal year [29] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation in everyday operations, and fostering a bold mindset [5] - The Uncrustables brand is projected to generate over $1 billion in net sales by the end of the fiscal year, continuing strong double-digit growth [11] - The company is reducing SKU count by 25% for the Hostess brand to improve operational efficiencies and drive margin expansion [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains dynamic, with ongoing input inflation and changes in consumer behavior impacting the fiscal year outlook [41] - The company is revising its full-year net sales expectations to increase by 3% to 5%, primarily due to the strength of the coffee portfolio [28] - Management remains confident in the long-term growth outlook and the ability to deliver shareholder value despite external challenges [30] Other Important Information - The company achieved $100 million in total run rate synergies from the Hostess Brands acquisition [16] - Free cash flow for the first quarter was negative $94.9 million, reflecting a decrease in cash provided by operating activities [39] - The company plans to prioritize debt reduction, aiming to pay down approximately $500 million of debt in each of the next two fiscal years [40] Q&A Session Summary Question: What are the expectations for the coffee segment? - The coffee segment is expected to remain resilient despite inflationary pressures, with approximately 70% of coffee drinking occasions occurring at home [21] Question: How is the company addressing the impact of tariffs? - The company is working to mitigate cost increases through alternative sourcing strategies and responsible pricing [45] Question: What is the outlook for the Sweet Baked Snacks segment? - The Sweet Baked Snacks segment is anticipated to improve sequentially, with increased dollar sales and volume growth noted in the Hostess brand [25]

[Executive Summary](index=1&type=section&id=Executive%20Summary) The company reported Q1 results exceeding expectations, driven by strong consumer demand and cost management, leading to raised full-year net sales expectations despite a Q1 net sales decrease to $2.1 billion and a net loss per diluted share [CEO Remarks](index=1&type=section&id=CEO%20Remarks) CEO Mark Smucker highlighted that Q1 results exceeded expectations, driven by strong top-line growth from consumer demand and disciplined cost management, leading to raised full-year net sales expectations and continued focus on long-term growth - Q1 results exceeded expectations, reflecting continued business momentum and agility in a dynamic external environment[3](index=3&type=chunk) - Strong top-line growth was driven by consumer demand for leading brands, while bottom-line results reflected disciplined cost management[3](index=3&type=chunk) - Full-year net sales expectations are being raised due to better-than-expected Q1 results and sustained brand momentum[3](index=3&type=chunk) - The company remains focused on investing in key growth platforms to deliver long-term growth and increase shareholder value[3](index=3&type=chunk) [Q1 Fiscal 2026 Financial Highlights](index=1&type=section&id=Q1%20Fiscal%202026%20Financial%20Highlights) The J.M. Smucker Co. reported Q1 FY26 net sales of **$2.1 billion**, a 1% decrease, but a 2% increase excluding divestitures and foreign currency, with a net loss per diluted share of **($0.41)** and adjusted EPS decreasing **22%** to **$1.90** Q1 Fiscal 2026 Financial Highlights | Metric | Q1 FY26 | | :-------------------------------- | :-------- | | Net sales | **$2.1 billion** | | Net sales (excl. divestitures & FX) | **2% increase** | | Net loss per diluted share | **($0.41)** | | Adjusted earnings per share | **$1.90** | | Cash used for operating activities | **($10.6) million** | | Free cash flow | **($94.9) million** | - The company updated its full-year fiscal 2026 financial outlook[4](index=4&type=chunk) [First Quarter Consolidated Financial Performance](index=2&type=section&id=FIRST%20QUARTER%20CONSOLIDATED%20RESULTS) Q1 FY26 saw a 1% net sales decrease to **$2.1 billion**, an **87%** operating income decline, and a shift to negative operating cash flow, primarily due to lower net income and higher commodity costs [Overview of Consolidated Results](index=2&type=section&id=Overview%20of%20Consolidated%20Results) For Q1 FY26, net sales decreased **1%** to **$2,113.3 million**, while operating income saw a significant **87%** decrease to **$45.6 million**, resulting in a net loss per common share of **($0.41)** and adjusted earnings per share decreasing **22%** to **$1.90** Consolidated Results | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | % Increase (Decrease) | | :--------------------------------------- | :----------------- | :----------------- | :-------------------- | | Net sales | **$2,113.3** | **$2,125.1** | **(1)%** | | Operating income | **$45.6** | **$349.5** | **(87)%** | | Adjusted operating income | **$370.3** | **$447.9** | **(17)%** | | Net income (loss) per common share – assuming dilution | **($0.41)** | **$1.74** | **(124)%** | | Adjusted earnings per share – assuming dilution | **$1.90** | **$2.44** | **(22)%** | [Net Sales Analysis](index=2&type=section&id=Net%20Sales%20Analysis) Net sales decreased by **$11.8 million** or **1%** overall, but comparable net sales increased by **$41.2 million** or **2%** excluding divestitures and foreign currency, driven by a **6 percentage point** increase from net price realization, partially offset by a **4 percentage point** decrease from volume/mix Net Sales | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | % Change | | :--------------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Net sales | **$2,113.3** | **$2,125.1** | **($11.8)** | **(1)%** | | Net sales excluding divestitures & FX | **$2,113.5** | **$2,072.3** | **$41.2** | **2%** | - Comparable net sales increased **2%**, driven by a **6 percentage point** increase from net price realization (primarily coffee), partially offset by a **4 percentage point** decrease from volume/mix (coffee, dog snacks, sweet baked goods, fruit spreads)[7](index=7&type=chunk) [Operating Income and Gross Profit](index=2&type=section&id=Operating%20Income%20and%20Gross%20Profit) Gross profit decreased significantly by **$322.5 million** or **40%**, primarily due to higher commodity costs and unfavorable volume/mix, leading to an **87%** decrease in operating income to **$45.6 million**, despite lower SD&A expenses and reduced amortization Gross Profit and Operating Income | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | % Increase (Decrease) | | :------------------------ | :----------------- | :----------------- | :-------------------- | | Gross Profit | **$474.7** | **$797.2** | **(40)%** | | Operating Income | **$45.6** | **$349.5** | **(87)%** | | Adjusted gross profit | **$743.2** | **$832.5** | **(11)%** | | Adjusted operating income | **$370.3** | **$447.9** | **(17)%** | - Gross profit decrease was primarily due to higher commodity costs, unfavorable volume/mix, and divestitures, partially offset by higher net price realization[8](index=8&type=chunk) - Operating income decrease was primarily due to the decrease in gross profit, partially offset by lower SD&A expenses and amortization[8](index=8&type=chunk) [Interest Expense and Income Taxes](index=2&type=section&id=Interest%20Expense%20and%20Income%20Taxes) Net interest expense remained comparable to the prior year, while the effective income tax rate decreased to **22.3%** from **24.8%**, mainly due to a loss before income taxes in the current period Interest Expense and Income Tax Rates | Metric | Q1 FY26 | Q1 FY25 | Change | | :------------------------ | :------ | :------ | :----- | | Net interest expense | **($100.2)M** | **($100.4)M** | — % | | Effective income tax rate | **22.3%** | **24.8%** | **(2.5) ppts** | | Adjusted effective income tax rate | **24.2%** | **24.6%** | **(0.4) ppts** | - Decrease in effective income tax rate was primarily due to a loss before income taxes in the current year[10](index=10&type=chunk) [Cash Flow and Debt](index=2&type=section&id=Cash%20Flow%20and%20Debt) Cash flow from operating activities shifted from a **$172.9 million** provision to a **$10.6 million** use in Q1 FY26, primarily reflecting lower net income, leading to a significant decrease in free cash flow to **($94.9) million** Cash Flow | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | | :------------------------------------ | :----------------- | :----------------- | :---------------- | | Net Cash Provided by (Used for) Operating Activities | **($10.6)** | **$172.9** | **($183.5)** | | Free cash flow | **($94.9)** | **$49.2** | **($144.1)** | - The decrease in cash provided by operating activities primarily reflects lower net income (loss) and related tax impacts[11](index=11&type=chunk) [Full-Year Fiscal 2026 Financial Outlook](index=3&type=section&id=FULL-YEAR%20OUTLOOK) The company updated its FY26 guidance, raising net sales growth expectations to **3.0%-5.0%** and free cash flow to **$975.0 million**, while maintaining adjusted EPS guidance of **$8.50-$9.50** [Updated Guidance Summary](index=3&type=section&id=Updated%20Guidance%20Summary) The company updated its full-year fiscal 2026 guidance, raising net sales increase expectations to **3.0% to 5.0%** and free cash flow to **$975.0 million**, while adjusted earnings per share guidance remains unchanged at **$8.50 - $9.50** Full-Year Fiscal 2026 Guidance | Metric | Current FY26 Guidance | Previous FY26 Guidance | | :-------------------------- | :-------------------- | :--------------------- | | Net sales increase vs. prior year | **3.0% to 5.0%** | **2.0% to 4.0%** | | Adjusted earnings per share | **$8.50 - $9.50** | **$8.50 - $9.50** | | Free cash flow (in millions) | **$975.0** | **$875.0** | | Capital expenditures (in millions) | **$325.0** | **$325.0** | | Adjusted effective income tax rate | **23.8%** | **23.7%** | - The updated guidance reflects current understanding of a dynamic external environment, including tariffs, regulatory changes, input inflation, and consumer behavior shifts[13](index=13&type=chunk) [Detailed Outlook Components](index=3&type=section&id=Detailed%20Outlook%20Components) The updated net sales guidance of **3.0% to 5.0%** includes a **$134.7 million** impact from divestitures, with comparable net sales expected to increase approximately **4.5% to 6.5%**, driven by higher net price realization, and adjusted EPS guidance of **$8.50 to $9.50** is based on an adjusted gross profit margin of **35.0% to 35.5%** - Comparable net sales are expected to increase approximately **4.5% to 6.5%**, excluding divestitures, driven by higher net price realization, partially offset by a decline in volume/mix[14](index=14&type=chunk) - Adjusted gross profit margin is expected to be approximately **35.0% to 35.5%**[14](index=14&type=chunk) - SD&A expenses are projected to increase by approximately **3.0%** versus the prior year[14](index=14&type=chunk) - Interest expense is estimated at approximately **$380.0 million**[14](index=14&type=chunk) - Free cash flow is expected to be approximately **$975.0 million**, with capital expenditures of **$325.0 million**[14](index=14&type=chunk) [First Quarter Segment Performance](index=4&type=section&id=FIRST%20QUARTER%20SEGMENT%20RESULTS) Q1 segment performance was mixed, with U.S. Retail Coffee and International and Away From Home showing sales growth, while other U.S. segments and Sweet Baked Snacks experienced sales and profit declines due to volume/mix and higher costs [U.S. Retail Coffee](index=4&type=section&id=U.S.%20Retail%20Coffee) The U.S. Retail Coffee segment reported a **15%** increase in net sales to **$717.2 million**, driven by an **18 percentage point** increase from net price realization, but segment profit decreased by **22%** to **$134.2 million** due to higher commodity costs and unfavorable volume/mix U.S. Retail Coffee Segment Performance | Metric | FY26 Q1 Results | Increase (decrease) vs. prior year | | :---------------- | :-------------- | :--------------------------------- | | Net Sales | **$717.2M** | **15%** | | Segment Profit | **$134.2M** | **(22)%** | | Segment Profit Margin | **18.7%** | **-900bps** | - Net price realization increased net sales by **18 percentage points**, primarily from higher net pricing across the portfolio[15](index=15&type=chunk) - Segment profit decrease was primarily due to higher commodity costs, unfavorable volume/mix, and higher marketing spend[15](index=15&type=chunk) [U.S. Retail Frozen Handheld and Spreads](index=4&type=section&id=U.S.%20Retail%20Frozen%20Handheld%20and%20Spreads) Net sales for U.S. Retail Frozen Handheld and Spreads decreased by **2%** to **$484.7 million**, driven by a **2 percentage point** decrease from volume/mix and a **1 percentage point** decrease from net price realization, leading to a **4%** decrease in segment profit to **$114.3 million** U.S. Retail Frozen Handheld and Spreads Segment Performance | Metric | FY26 Q1 Results | Increase (decrease) vs. prior year | | :---------------- | :-------------- | :--------------------------------- | | Net Sales | **$484.7M** | **(2)%** | | Segment Profit | **$114.3M** | **(4)%** | | Segment Profit Margin | **23.6%** | **-40bps** | - Volume/mix decreased net sales by **2 percentage points** (peanut butter, fruit spreads), partially offset by Uncrustables sandwiches[16](index=16&type=chunk) - Segment profit decrease was primarily driven by higher marketing spend and unfavorable volume/mix, partially offset by lower pre-production expenses related to the new Uncrustables facility[16](index=16&type=chunk) [U.S. Retail Pet Foods](index=4&type=section&id=U.S.%20Retail%20Pet%20Foods) The U.S. Retail Pet Foods segment experienced an **8%** decrease in net sales to **$368.0 million**, primarily due to an **8 percentage point** decrease from volume/mix, resulting in a **12%** decrease in segment profit to **$101.3 million** due to unfavorable volume/mix and higher costs U.S. Retail Pet Foods Segment Performance | Metric | FY26 Q1 Results | Increase (decrease) vs. prior year | | :---------------- | :-------------- | :--------------------------------- | | Net Sales | **$368.0M** | **(8)%** | | Segment Profit | **$101.3M** | **(12)%** | | Segment Profit Margin | **27.5%** | **-130bps** | - Volume/mix decreased net sales by **8 percentage points**, driven by dog snacks and lower contract manufacturing sales from divested pet food brands[17](index=17&type=chunk) - Segment profit decrease was primarily due to unfavorable volume/mix and higher costs, partially offset by lower marketing spend[18](index=18&type=chunk) [Sweet Baked Snacks](index=5&type=section&id=Sweet%20Baked%20Snacks) Net sales for Sweet Baked Snacks decreased by **24%** to **$253.2 million**, with a **10%** decrease excluding divestitures, primarily due to volume/mix and net price realization, leading to a significant **54%** decrease in segment profit to **$34.2 million** Sweet Baked Snacks Segment Performance | Metric | FY26 Q1 Results | Increase (decrease) vs. prior year | | :---------------- | :-------------- | :--------------------------------- | | Net Sales | **$253.2M** | **(24)%** | | Segment Profit | **$34.2M** | **(54)%** | | Segment Profit Margin | **13.5%** | **-880bps** | - Excluding divestitures, net sales decreased **10%**, driven by volume/mix (**8 ppts**) and net price realization (**2 ppts**) for snack cakes[19](index=19&type=chunk) - Segment profit decrease was primarily due to the impact of divested businesses, unfavorable volume/mix, and higher costs[19](index=19&type=chunk) [International and Away From Home](index=5&type=section&id=International%20and%20Away%20From%20Home) The International and Away From Home segment reported a **7%** increase in net sales to **$290.2 million**, driven by a **9 percentage point** contribution from net price realization, resulting in a significant **35%** increase in segment profit to **$65.5 million** International and Away From Home Segment Performance | Metric | FY26 Q1 Results | Increase (decrease) vs. prior year | | :---------------- | :-------------- | :--------------------------------- | | Net Sales | **$290.2M** | **7%** | | Segment Profit | **$65.5M** | **35%** | | Segment Profit Margin | **22.6%** | **470bps** | - Net price realization contributed **9 percentage points** to net sales, primarily from coffee and portion control products[20](index=20&type=chunk) - Segment profit increase was primarily due to higher net price realization and lower SD&A expenses, partially offset by higher costs[20](index=20&type=chunk) [Corporate Information and Disclosures](index=6&type=section&id=Corporate%20Information%20and%20Disclosures) This section outlines the company's webcast details for Q1 results, highlights forward-looking statement risks, provides an overview of The J.M. Smucker Co. and its brands, and lists key contact information [Financial Results Discussion and Webcast](index=6&type=section&id=Financial%20Results%20Discussion%20and%20Webcast) The company will post a pre-recorded management discussion, transcript, and supplemental materials on its investor website, followed by a live question-and-answer session with the CEO and CFO - A pre-recorded management discussion, transcript, and supplemental materials for Q1 FY26 results will be available on investors.jmsmucker.com at approximately **7:00 a.m. ET**[21](index=21&type=chunk) - A live Q&A session with Mark Smucker (CEO) and Tucker Marshall (CFO) will be webcast at **9:00 a.m. ET**, accessible on the investor website[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=The%20J.M.%20Smucker%20Co.%20Forward-Looking%20Statements) This section contains forward-looking statements regarding projected financial results, which are subject to various risks and uncertainties that could cause actual results to differ materially, including integration of Hostess Brands, supply chain disruptions, and cost inflation - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially[22](index=22&type=chunk) - Key risks include successful integration of Hostess Brands, supply chain disruptions, cost inflation, changes in consumer preferences, regulatory changes, and IT system breaches[22](index=22&type=chunk) [About The J.M. Smucker Co.](index=7&type=section&id=About%20The%20J.M.%20Smucker%20Co.) The J.M. Smucker Co. is a North American food company offering diverse brands in categories like coffee, peanut butter, fruit spreads, frozen handhelds, sweet baked goods, dog snacks, and cat food, emphasizing quality products and responsible operations - The J.M. Smucker Co. offers a diverse family of brands across North America in categories such as coffee, peanut butter, fruit spreads, frozen handheld, sweet baked goods, dog snacks, and cat food[23](index=23&type=chunk) - Notable brands include Folgers, Dunkin', Café Bustelo, Jif, Uncrustables, Smucker's, Hostess, Milk-Bone, and Meow Mix[23](index=23&type=chunk) - The company is committed to producing quality products, operating responsibly and ethically, and delivering on its purpose to make a positive impact on society[23](index=23&type=chunk) [Contacts](index=7&type=section&id=Contacts) Provides contact information for investor relations and media inquiries - Investor Relations contact: Crystal Beiting, Vice President, Investor Relations & FP&A[24](index=24&type=chunk) - Media contact: Abbey Linville, Vice President, Public Relations & Communications[24](index=24&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The unaudited financial statements reveal a Q1 FY26 net loss of **($43.9) million**, a **40%** gross profit decrease, and a shift to negative operating cash flow, with total assets increasing and shareholders' equity decreasing [Statements of Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) The unaudited condensed consolidated statements of income show a net loss of **($43.9) million** for Q1 FY26, a significant decline from a net income of **$185.0 million** in the prior year, with gross profit decreasing **40%** and operating income decreasing **87%** Condensed Consolidated Statements of Income | Metric | Three Months Ended July 31, 2025 (Millions) | Three Months Ended July 31, 2024 (Millions) | % Increase (Decrease) | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Net sales | **$2,113.3** | **$2,125.1** | **(1)%** | | Cost of products sold | **1,638.6** | **1,327.9** | **23%** | | Gross Profit | **474.7** | **797.2** | **(40)%** | | Gross margin | **22.5%** | **37.5%** | | | Operating Income | **45.6** | **349.5** | **(87)%** | | Operating margin | **2.2%** | **16.4%** | | | Net Income (Loss) | **($43.9)** | **$185.0** | **(124)%** | | Net income (loss) per common share – assuming dilution | **($0.41)** | **$1.74** | **(124)%** | | Dividends declared per common share | **$1.10** | **$1.08** | **2%** | [Balance Sheets](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, total assets were **$17,741.9 million**, a slight increase from April 30, 2025, driven by higher inventories and other current assets, while total liabilities also increased, primarily due to higher short-term borrowings, and total shareholders' equity decreased Condensed Consolidated Balance Sheets | Metric | July 31, 2025 (Millions) | April 30, 2025 (Millions) | | :-------------------------------- | :----------------------- | :------------------------ | | Total Current Assets | **$2,401.9** | **$2,146.6** | | Total Assets | **$17,741.9** | **$17,563.3** | | Total Current Liabilities | **$2,953.9** | **$2,652.0** | | Total Noncurrent Liabilities | **$8,862.1** | **$8,828.7** | | Total Shareholders' Equity | **$5,925.9** | **$6,082.6** | | Total Liabilities and Shareholders' Equity | **$17,741.9** | **$17,563.3** | - Inventories increased from **$1,209.4 million** to **$1,386.0 million**[28](index=28&type=chunk) - Short-term borrowings increased from **$640.8 million** to **$951.6 million**[28](index=28&type=chunk) [Statements of Cash Flow](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) The statements of cash flow show a shift from net cash provided by operating activities of **$172.9 million** in Q1 FY25 to net cash used for operating activities of **($10.6) million** in Q1 FY26, with net cash used for investing activities increasing to **($197.9) million** Condensed Consolidated Statements of Cash Flow | Metric | Three Months Ended July 31, 2025 (Millions) | Three Months Ended July 31, 2024 (Millions) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Net Cash Provided by (Used for) Operating Activities | **($10.6)** | **$172.9** | | Net Cash Provided by (Used for) Investing Activities | **($197.9)** | **($172.4)** | | Net Cash Provided by (Used for) Financing Activities | **$178.0** | **($23.0)** | | Net increase (decrease) in cash and cash equivalents | **($30.6)** | **($22.5)** | | Cash and Cash Equivalents at End of Period | **$39.3** | **$39.5** | - The change in operating cash flow was significantly impacted by the net loss in the current period and increased inventories[30](index=30&type=chunk) - Financing activities were positively impacted by a substantial increase in short-term borrowings[30](index=30&type=chunk) [Supplemental Financial Data](index=11&type=section&id=Supplemental%20Financial%20Data) Supplemental data details a **3%** decrease in Q1 FY26 SD&A expenses to **$377.4 million** and provides comprehensive net sales and segment profit breakdowns for all reportable business units [Supplemental Schedule (SD&A)](index=11&type=section&id=Unaudited%20Supplemental%20Schedule) Total selling, distribution, and administrative (SD&A) expenses decreased by **3%** to **$377.4 million** in Q1 FY26, representing **17.9%** of net sales, with marketing expenses increasing while other SD&A components decreased Supplemental Schedule (SD&A) | SD&A Component | Q1 FY26 (Millions) | % of Net Sales (FY26) | Q1 FY25 (Millions) | % of Net Sales (FY25) | | :----------------------------- | :----------------- | :-------------------- | :----------------- | :-------------------- | | Marketing | **$117.9** | **5.6%** | **$108.9** | **5.1%** | | Selling | **$70.9** | **3.4%** | **$75.9** | **3.6%** | | Distribution | **$69.2** | **3.3%** | **$71.5** | **3.4%** | | General and administrative | **$119.4** | **5.6%** | **$133.8** | **6.3%** | | Total SD&A expenses | **$377.4** | **17.9%** | **$390.1** | **18.4%** | - Marketing expenses increased by **$9.0 million**, while general and administrative expenses decreased by **$14.4 million**[32](index=32&type=chunk) [Reportable Segments (Detailed Tables)](index=12&type=section&id=Unaudited%20Reportable%20Segments) This section provides detailed net sales and segment profit data for each reportable segment, showing mixed performance with some segments experiencing sales growth while others faced declines in both sales and profit Net Sales by Segment | Segment | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :-------------------------------- | :------- | :------- | | U.S. Retail Coffee | **$717.2** | **$623.4** | | U.S. Retail Frozen Handheld and Spreads | **$484.7** | **$496.8** | | U.S. Retail Pet Foods | **$368.0** | **$399.7** | | Sweet Baked Snacks | **$253.2** | **$333.7** | | International and Away From Home | **$290.2** | **$271.5** | Segment Profit by Segment | Segment | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :-------------------------------- | :------- | :------- | | U.S. Retail Coffee | **$134.2** | **$172.6** | | U.S. Retail Frozen Handheld and Spreads | **$114.3** | **$119.0** | | U.S. Retail Pet Foods | **$101.3** | **$115.3** | | Sweet Baked Snacks | **$34.2** | **$74.4** | | International and Away From Home | **$65.5** | **$48.6** | - Total segment profit decreased from **$529.9 million** in Q1 FY25 to **$449.5 million** in Q1 FY26[34](index=34&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=13&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures for performance evaluation and provides detailed reconciliations for Q1 FY26 results and the full-year FY26 outlook, including adjusted EPS and free cash flow [Explanation of Non-GAAP Measures](index=13&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP financial measures, such as adjusted gross profit, adjusted operating income, adjusted EPS, and free cash flow, to evaluate internal performance and enhance investor understanding by excluding items affecting comparability - Non-GAAP measures are used internally for performance evaluation, annual budgeting, and monthly operating result analysis, and by the Board for incentive compensation[35](index=35&type=chunk) - Exclusions from GAAP results include amortization, impairment charges, special project costs (divestiture, acquisition, integration, restructuring), gains/losses on divestitures, and changes in unallocated derivative gains/losses[36](index=36&type=chunk) - These non-GAAP measures supplement GAAP results and are not intended to replace them, but rather to facilitate comparison of past and present operations and liquidity[37](index=37&type=chunk) [Q1 Fiscal 2026 Non-GAAP Reconciliations](index=14&type=section&id=Unaudited%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for Q1 FY26, with key adjustments including the change in net cumulative unallocated derivative gains and losses (**$253.1 million**) and special project costs to derive adjusted gross profit, operating income, and net income, resulting in an adjusted earnings per share of **$1.90** Net Sales Reconciliation | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | % | | :--------------------------------------- | :-------- | :-------- | :------- | :-- | | Net sales | **$2,113.3** | **$2,125.1** | **($11.8)** | **(1)%** | | Sweet Baked Snacks value brands divestiture | — | **(15.7)** | **15.7** | **1** | | Voortman® divestiture | — | **(37.1)** | **37.1** | **2** | | Foreign currency exchange | **0.2** | — | **0.2** | — | | Net sales excluding divestitures and foreign currency exchange | **$2,113.5** | **$2,072.3** | **$41.2** | **2%** | GAAP to Non-GAAP Reconciliation | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :--------------------------------------- | :------- | :------- | | Gross profit | **$474.7** | **$797.2** | | Adjusted gross profit | **$743.2** | **$832.5** | | Operating income | **$45.6** | **$349.5** | | Adjusted operating income | **$370.3** | **$447.9** | | Net income (loss) | **($43.9)** | **$185.0** | | Adjusted income | **$203.4** | **$259.5** | | Adjusted earnings per share – assuming dilution | **$1.90** | **$2.44** | EBITDA and Free Cash Flow | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :------------------------------------------ | :------- | :------- | | EBITDA (as adjusted) | **$178.9** | **$475.4** | | Free cash flow | **($94.9)** | **$49.2** | [Full-Year Fiscal 2026 Outlook Reconciliations](index=17&type=section&id=Reconciliation%20of%20fiscal%20year%202026%20guidance) The company provides a reconciliation for its fiscal year 2026 guidance, projecting adjusted EPS of **$8.50 - $9.50** after adjustments for derivative gains/losses, amortization, special project costs, and a pension plan termination settlement charge, with free cash flow projected at **$975.0 million** Adjusted Earnings Per Share Outlook Reconciliation | Metric | FY26 Low | FY26 High | | :--------------------------------------- | :------- | :------- | | Net income per common share – assuming dilution | **$5.54** | **$6.54** | | Adjustments (derivative, amortization, special project costs, pension charge, tax impact) | **+$2.96** | **+$2.96** | | Adjusted earnings per share | **$8.50** | **$9.50** | Free Cash Flow Outlook Reconciliation | Metric | FY26 (Millions) | | :------------------------------------ | :------- | | Net cash provided by operating activities | **$1,300.0** | | Additions to property, plant, and equipment | **(325.0)** | | Free cash flow | **$975.0** | - The adjusted EPS reconciliation includes a non-recurring pre-tax settlement charge related to the termination of a U.S. defined benefit pension plan[46](index=46&type=chunk)

Financial Performance - Net sales increased by 18% to $2,125.1 million in FY25 Q1[1] - Comparable net sales increased by 1%[1] - Adjusted earnings per share increased by 10% to $2.44[1] - Free cash flow was $49.2 million, compared to $67.6 million in the prior year[1] - Adjusted Gross Profit increased 29% to $832.5 million[1] - Adjusted Operating Income increased 35% to $447.9 million[1] Segment Results - U S Retail Coffee net sales were $623.4 million, with no change YoY[8] - U S Retail FH&S net sales were $496.8 million, up 7% YoY[8] - U S Retail Pet Foods net sales were $399.7 million, down 9% YoY[8] - International & AFH net sales decreased 1% to $271.5 million[8] Full Year Fiscal 2025 Outlook - Net sales are expected to increase 8.5% to 9.5%[9] - Adjusted EPS is projected to be $9.60 to $10.00[9] - Free cash flow is estimated at $875 million[9]

Core Insights - The J.M. Smucker Co. reported first-quarter results for fiscal year 2026, showing a decrease in net sales and significant declines in operating income and net income compared to the previous year [1][4][33] - The company has raised its net sales expectations for the fiscal year due to better-than-expected first-quarter results and sustained momentum in its brand portfolio [3][12] Financial Performance - Net sales for the first quarter were $2,113.3 million, a decrease of $11.8 million or 1% from the prior year [4][33] - Operating income fell to $45.6 million, down 87% from $349.5 million in the previous year [4][33] - Adjusted earnings per share decreased by 22% to $1.90, compared to $2.44 in the prior year [4][33] Sales and Revenue Breakdown - Comparable net sales increased by 2% when excluding divestitures and foreign currency impacts, driven by a 6 percentage point increase from net price realization [5][6] - The U.S. Retail Coffee segment saw a 15% increase in net sales, while the U.S. Retail Pet Foods segment experienced an 8% decline [17][21][36] Cost and Profitability - Gross profit decreased by $322.5 million or 40%, primarily due to higher commodity costs and unfavorable volume/mix [7][33] - Selling, distribution, and administrative expenses decreased by 3% to $377.4 million [33] Cash Flow and Capital Expenditures - Cash used for operating activities was $10.6 million, a significant decline from $172.9 million in the prior year [11][33] - Free cash flow was negative at ($94.9) million, compared to $49.2 million in the previous year [11][33] Full-Year Guidance - The company updated its fiscal 2026 guidance, now expecting net sales to increase by 3.0% to 5.0%, with adjusted earnings per share projected between $8.50 and $9.50 [12][14][15] - The adjusted effective income tax rate is expected to be around 23.8% [15] Segment Performance - The Sweet Baked Snacks segment reported a 24% decline in net sales, while the International and Away From Home segment saw a 7% increase [23][26][36] - Segment profit margins varied, with U.S. Retail Coffee at 18.7% and Sweet Baked Snacks at 13.5% [17][23][37]

Core Viewpoint - J.M. Smucker Company is under investigation for potential violations of federal securities laws following significant impairment charges related to its Sweet Baked Snacks segment and the Hostess brand trademark, which have led to a substantial decline in stock price [1][3]. Group 1: Company Overview - J.M. Smucker manufactures and markets branded food and beverage products, including the recently acquired Hostess Brands, Inc., which specializes in sweet baked goods [2]. - The company characterized the Hostess acquisition as "highly complementary," citing positive underlying trends in snacking, particularly sweet snacking [2]. Group 2: Financial Performance - In Q4 2025, J.M. Smucker reported an $867 million impairment charge related to the goodwill of its Sweet Baked Snacks segment and a $113 million impairment charge for the Hostess brand trademark due to ongoing underperformance [3]. - Following the announcement of these impairment charges, J.M. Smucker's stock price dropped by $17.44 per share, a decline of over 18%, from $111.85 on June 9, 2025, to $94.41 on June 10, 2025 [3].

NEW YORK, Aug. 25, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into The J.M. Smucker Company (NYSE: SJM) for potential violations of the federal securities laws. If you invested in J.M. Smucker, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/the-jm-smucker-company-class-action-lawsuit. Why Is J.M. Smucker being Investigated? J.M. Smucker manufactures and markets branded food and beverage products. I ...

NEW YORK, Aug. 23, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into The J.M. Smucker Company (NYSE: SJM) for potential violations of the federal securities laws. If you invested in J.M. Smucker, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/the-jm-smucker-company-class-action-lawsuit. Why Is J.M. Smucker being Investigated? J.M. Smucker manufactures and markets branded food and beverage products. I ...