J. M. Smucker(SJM) - 2025 Q4 - Annual Report

Raw Material Costs and Price Management - Raw material costs have fluctuated significantly in 2025, driven by elevated commodity and supply chain costs, necessitating potential price adjustments across the business[18] - The company employs futures and fixed-price contracts to manage price volatility for a significant portion of its commodity costs[18] - A hypothetical 10 percent change in market prices related to commodities could result in potential gains or losses in fair value, but actual losses or gains are actively managed[268][270] - The estimated fair value of commodities for the year ended April 30, 2025, was $112.7 million for high, $49.6 million for average, and $20.0 million for low[269] Customer Concentration and Sales - Sales to Walmart accounted for 33% of net sales in both 2025 and 2024, and 34% in 2023, indicating a strong reliance on major customers[24] - The top 10 customers collectively represented approximately 60% of consolidated net sales in 2025, highlighting the concentration of revenue sources[25] - Revenues from customers outside the U.S. represented 4 percent of consolidated net sales during 2025, indicating exposure to foreign currency fluctuations[273] Employee and Workforce Management - The company has over 8,000 full-time employees worldwide, emphasizing the importance of human capital in its operations[35] - The company provided over 27,000 hours of professional development training for employees in 2025[43] - The company achieved a trailing 12-month turnover rate below the industry average, reflecting its commitment to employee retention[42] - The company offers at least three weeks of paid time off, 12 paid holidays, and 12 weeks of parental leave, supporting employee well-being[51] - The company conducts annual pay equity analysis to ensure fair compensation among similarly situated employees[49] Community Engagement and Philanthropy - The company donated over $10 million to more than 100 philanthropic partners, including local food banks and the American Red Cross[39] - The company coordinated an initiative to increase funding from operational sites to local organizations, enhancing community support[40] Environmental Sustainability - The company is committed to environmental sustainability, with public goals related to waste diversion, water usage, and greenhouse gas emissions[34] Safety and Incident Management - The total recordable incident rate achieved by the company was less than half of the national average for industry peers in 2025[44] Financial Management and Risk - A hypothetical 100 basis-point decrease in interest rates would increase the fair value of the company's long-term debt by $563.6 million as of April 30, 2025[266] - The company terminated interest rate contracts for $42.5 million concurrent with the payment of debt assumed from the acquisition of Hostess Brands[264] - Foreign currency exchange risk is primarily related to Canadian currency, with foreign currency denominated assets and liabilities not expected to significantly impact future earnings or cash flows[271] - The company utilizes foreign currency derivatives with maturities of less than one year to manage exchange rate fluctuations, with changes in value immediately recognized in cost of products sold[272] - The company realized a net loss of $4.5 million from reverse treasury locks during the year ended April 30, 2025[263] Product Segmentation - Private label brands held a 15.2% average market share in the U.S. retail market segments for the 52 weeks ended April 20, 2025, up from 13.7% in the previous year[29] - The Sweet Baked Snacks segment experiences moderate seasonality, with declines during the early winter period due to the holiday season[23]