The J. M. Smucker Company (NYSE:SJM) Q4 2025 Earnings Conference Call June 10, 2025 9:00 AM ET Company Participants Crystal Beiting - Vice President of Investor Relations and FPandA Mark T. Smucker - CEO and Chairman Tucker H. Marshall - Chief Financial Officer Conference Call Participants Alexia Jane Burland Howard - Sanford C. Bernstein & Co., LLC., Research Division Andrew Lazar - Barclays Bank PLC, Research Division Christopher Michael Carey - Wells Fargo Securities, LLC, Research Division Kenneth B. Go ...

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]

Over fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own ...

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]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) guidance for fiscal year 2026 at the midpoint of $9, which reflects a decline year-over-year when excluding impacts from coffee inflation and tariffs [10][32] - The adjusted EPS was impacted by $0.80 from green coffee inflation and $0.25 from tariffs, indicating a cautious outlook for the upcoming fiscal year [10][32] Business Line Data and Key Metrics Changes - The Sweet Baked Snacks segment is expected to see a decline in segment profit on a comparable basis, contributing an additional $0.20 impact to the adjusted EPS [11] - The company is focusing on core brands like Donuts and Cupcakes for growth, emphasizing the need for innovation and marketing investments in these areas [20][22] Market Data and Key Metrics Changes - The coffee segment is experiencing a net pricing increase of around 20% for fiscal year 2026, with a negative volume impact of approximately 10% due to price elasticity of demand [14][37] - The away-from-home coffee business is expected to see high single-digit pricing increases, indicating a strong focus on recovering costs in this segment [29] Company Strategy and Development Direction - The company is committed to investing in key growth platforms, particularly around brands like Cafe Bustelo and Uncrustables, to support long-term growth [10][102] - A strategic focus on optimizing the portfolio and enhancing brand building efforts is emphasized, particularly in the Sweet Baked Snacks and coffee segments [22][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the importance of ongoing marketing investments to support growth platforms and indicated a cautious approach to guidance due to external factors impacting profitability [11][62] - The company remains optimistic about stabilizing the Hostess brand and believes that focusing on core products will drive future growth [25][80] Other Important Information - The company reported free cash flow of $817 million for fiscal year 2025, which was below expectations due to higher inventory balances and green coffee inflation [99] - Fiscal year 2026 free cash flow guidance is set at $875 million, with expectations of improved management of working capital and lower capital expenditures [99] 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 the EPS outlook, leading to a more subdued forecast for fiscal year 2026 [10][32] Question: Details on SKU and display rationalizations for Hostess - Management indicated a focus on core brands like Donuts and Cupcakes, emphasizing the need for clarity and optimization in the product portfolio [20][22] Question: Pricing strategy for the coffee segment - The company is implementing pricing across the entire coffee portfolio, with a significant focus on recovering costs associated with green coffee inflation and tariffs [37] Question: Long-term growth outlook for Hostess - The long-term growth rate for the Sweet Baked Snacks portfolio has been revised from 4% to 3%, reflecting a more cautious outlook based on category performance [32] Question: Free cash flow guidance and debt management - Management outlined that the anticipated free cash flow for fiscal year 2026 will be used for debt paydown and dividend payments, with a combination of generated cash and excess cash from the balance sheet [99]

纳指小幅高开 腾讯音乐涨超4% 智通财经6月10日电，美股三大指数开盘涨跌互现，道指跌0.04%，纳指涨0.15%，标普500指数涨 0.11%。腾讯音乐涨超4%，公司拟议收购喜马拉雅控股。台积电涨超2%，5月营收同比增长39.6%。食 品巨头斯马克跌超6%，Q4营收不及预期。 ...

Core Insights - Smucker (SJM.US) reported a 3% year-over-year decline in Q4 sales to $2.1 billion, falling short of expectations [1] - Non-GAAP EPS was $2.31, exceeding market expectations, compared to $2.66 in the same period last year [1] - Adjusted gross profit decreased by 9% year-over-year [1] Sales Performance - Same-store sales fell by 1%, reflecting a 3% decline in volume/mix, driven by decreased sales in pet snacks, dessert baking products, and fruit spreads, partially offset by increased sales of Uncrustables sandwiches [1] - The U.S. retail coffee business saw an 11% sales increase, while the U.S. retail pet food business experienced a 13% sales decline [1][2] Acquisition Impact - Sales were negatively impacted by the acquisition of Hostess in November 2023, as the company faced poor performance due to reduced consumer spending [1] - CEO Mark Smucker indicated plans to offset rising raw material costs through price increases [1] Pricing and Future Outlook - Same-store sales reflected a 3% increase in net pricing, primarily due to higher coffee prices, while net prices for dessert baking products and pet snacks declined [2] - The company provided a lower-than-expected earnings guidance for the next fiscal year, projecting adjusted EPS between $8.50 and $9.50, with a midpoint of $9.00, compared to the average expectation of $10.25 [2] - Following the earnings announcement, the company's stock price fell approximately 8% in pre-market trading [2]

Financial Data and Key Metrics Changes - The company reported a total net sales decline of 3% in the fourth quarter, with comparable net sales decreasing by 1% when excluding divestitures and foreign currency impacts [35][36] - Adjusted earnings per share for the fourth quarter was $2.31, a decrease of 13% compared to the prior year [38] - Free cash flow for the fourth quarter was $299 million, slightly up from $298 million in the prior year, with full-year free cash flow reaching $817 million, an increase of $174 million [43][44] Business Line Data and Key Metrics Changes - The Uncrustables brand achieved over $920 million in net sales, growing by more than $125 million, driven by advertising and distribution gains [8][9] - The Cafe Bustelo brand grew net sales by 19% to approximately $400 million, gaining share in all segments it competes in [10] - The Sweet Baked Snacks segment saw a significant decline in net sales, decreasing by 26% in the fourth quarter, with a 72% drop in segment profit [41][42] Market Data and Key Metrics Changes - In the US retail coffee segment, net sales increased by 11%, with net price realization contributing a 10 percentage point increase [38] - The pet foods segment experienced a 13% decline in net sales, primarily due to unexpected retailer inventory headwinds [21][40] - International and away from home net sales grew by 4%, driven by strong performance in the away from home business [24][42] Company Strategy and Development Direction - The company aims to stabilize and refocus the Sweet Baked Snacks segment for sustainable growth, with a long-term net sales growth expectation of 3% [13][35] - Strategic priorities for fiscal year 2026 include accelerating organic growth, embedding transformation in operations, and maintaining a disciplined financial approach [26][27] - The company anticipates that key platforms, including Uncrustables and Cafe Bustelo, will deliver over 80% of its growth over the next five years [18][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic operating environment, including inflationary pressures and evolving consumer behavior, which necessitated cautious guidance for fiscal year 2026 [27][46] - The company expects full-year net sales to increase by 2% to 4%, with comparable net sales anticipated to grow approximately 4.5% at the midpoint of the guidance range [28][46] - Management expressed confidence in the company's strategy and its ability to deliver long-term growth despite external challenges [31][51] Other Important Information - The company recognized significant impairment charges totaling $980 million related to the Sweet Baked Snacks segment and the Hostess brand [34] - Capital expenditures for the year were $394 million, representing 4.5% of net sales, with a target of approximately 3.5% for long-term strategic goals [44][45] - The company returned approximately $455 million to shareholders through dividends, marking 23 consecutive years of dividend growth [44] Q&A Session Summary Question: What are the expectations for the Sweet Baked Snacks segment? - Management anticipates low single-digit declines in comparable net sales for the Sweet Baked Snacks segment as they work to stabilize the Hostess brand [47] Question: How is the company addressing inflationary pressures? - The company plans to implement price increases to recover higher costs, particularly in the coffee segment and for Uncrustables sandwiches [19][49] Question: What is the outlook for free cash flow? - The company projects free cash flow of approximately $875 million at the midpoint of adjusted earnings per share guidance [50]

Financial Data and Key Metrics Changes - The company reported a total net sales decline of 3% in the fourth quarter, with comparable net sales decreasing by 1% when excluding divestitures and foreign currency impacts [33][34] - Adjusted earnings per share for the fourth quarter was $2.31, a decrease of 13% compared to the prior year [36] - Free cash flow for the fourth quarter was $299 million, slightly up from $298 million in the prior year, with full-year free cash flow reaching $817 million, an increase of $174 million [42][43] Business Line Data and Key Metrics Changes - The Uncrustables brand achieved approximately $920 million in net sales, growing over $125 million in fiscal year 2025, driven by advertising and distribution gains [7][8] - The Cafe Bustelo brand grew net sales by 19% in the US retail coffee portfolio, ending fiscal year 2025 with approximately $400 million in net sales [9] - The Sweet Baked Snacks segment saw a significant decline in net sales, decreasing by 26% versus the prior year, with a 72% drop in segment profit [40][41] Market Data and Key Metrics Changes - In the US retail coffee segment, net sales increased by 11%, primarily due to higher net pricing for Folgers and Cafe Bustelo [36] - The US retail pet foods segment experienced a 13% decline in net sales, attributed to unexpected retailer inventory headwinds [20][38] - International and away-from-home net sales grew by 4%, driven by strong performance in the away-from-home business [22][41] Company Strategy and Development Direction - The company aims to stabilize and refocus the Sweet Baked Snacks segment for sustainable growth, with a long-term net sales growth expectation of 3% [12][33] - Strategic priorities for fiscal year 2026 include accelerating organic growth by investing in key platforms and embedding transformation in everyday operations [25][26] - The company anticipates that key platforms, including Uncrustables and Cafe Bustelo, will deliver over 80% of the company's growth over the next five years [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the dynamic operating environment, including inflationary pressures and evolving consumer behavior, which necessitates cautious guidance for fiscal year 2026 [26][45] - The company expects full-year net sales to increase by 2% to 4%, with comparable net sales anticipated to grow approximately 4.5% at the midpoint of the guidance range [27][45] - Management expressed confidence in the company's strategy and ability to navigate challenges while focusing on long-term growth and shareholder value [30][51] Other Important Information - The company recognized significant impairment charges totaling $980 million related to the Sweet Baked Snacks segment and Hostess brand [32] - Capital expenditures for the year were $394 million, representing 4.5% of net sales, with a target of approximately 3.5% of net sales in the long term [43][44] - The company plans to prioritize debt reduction, aiming to pay down approximately $500 million of debt annually over the next two years [44] Q&A Session Summary Question: What are the expectations for the Sweet Baked Snacks segment? - Management anticipates low single-digit declines in comparable net sales for the Sweet Baked Snacks segment as they work to stabilize the Hostess brand [46] Question: How is the company addressing inflationary pressures? - The company is implementing price increases to recover costs associated with rising green coffee prices and other inflationary pressures [18][49] Question: What is the outlook for free cash flow? - The company projects free cash flow of approximately $875 million at the midpoint of adjusted earnings per share guidance [50]