J. M. Smucker(US:SJM)2025-11-25 12:20Financial Performance - Net sales for Q2 FY26 were $2.3 billion, an increase of $58.9 million, or 3%, with a 5% increase when excluding divestitures and foreign currency effects[4] - Net income per diluted share was $2.26, while adjusted earnings per share decreased by 24% to $2.10[4] - Cash provided by operations was $346.5 million, down from $404.2 million in the prior year, and free cash flow was $280.2 million compared to $317.2 million[10] - The company updated its full-year fiscal 2026 guidance, expecting net sales to increase by 3.5% to 4.5% compared to the prior year[12] - Adjusted earnings per share guidance is now set at $8.75 to $9.25, reflecting an increase in net sales and adjusted gross profit margin of approximately 35%[13] - Net income for the three months ended October 31, 2025, was $241.3 million, compared to a net loss of $24.5 million in the same period of 2024[25] - Adjusted earnings per share for the three months ended October 31, 2025, were $2.10, down from $2.76 in the same period of 2024[42] - Net income per common share (assuming dilution) is projected to be between $5.66 and $6.16 for the year ending April 30, 2026[44] - Adjusted earnings per share are expected to range from $8.75 to $9.25 for the same period[44] Segment Performance - U.S. Retail Coffee segment net sales increased by 21% to $848.9 million, driven by higher net pricing, although segment profit decreased by 24%[14] - U.S. Retail Frozen Handheld and Spreads segment net sales decreased by 5% to $461.1 million, with segment profit down by 12%[15] - U.S. Retail Pet Foods segment net sales decreased by 7% to $413.2 million, while segment profit increased by 2%[16] - Sweet Baked Snacks segment net sales decreased by 19% to $256.1 million, with segment profit down by 69%[18] - International and Away From Home segment net sales increased by 9% to $350.8 million, with segment profit increasing by 12%[19] - U.S. Retail Coffee segment net sales increased to $848.9 million, up 20.5% from $704.0 million year-over-year[33] - The U.S. Retail Pet Foods segment reported net sales of $413.2 million, a decrease of 7.2% from $445.4 million in the prior year[33] Operational Metrics - Gross profit decreased by 2% to $869.9 million for the three months ended October 31, 2025, compared to $886.1 million in the prior year, resulting in a gross margin of 37.3%[25] - Operating income increased by 147% to $418.5 million for the three months ended October 31, 2025, compared to $169.7 million in the same period of 2024[25] - Total segment profit decreased to $479.0 million for the three months ended October 31, 2025, down from $578.8 million in 2024, reflecting a decline of 17.2%[33] - Adjusted operating income for the three months ended October 31, 2025, was $394.3 million, a decrease of 19.6% compared to $490.6 million in 2024[40] - The gross profit margin for the three months ended October 31, 2025, was 33.9%, down from 38.7% in 2024[40] - The company reported a 14% increase in the cost of products sold for the six months ended October 31, 2025, totaling $3,098.8 million compared to $2,713.0 million in the prior year[25] Cash Flow and Assets - Free cash flow for the three months ended October 31, 2025, was $280.2 million, compared to $317.2 million in 2024, indicating a decrease of 11.6%[42] - Cash and cash equivalents at the end of the period were $62.8 million, compared to $49.2 million at the end of the same period in 2024[29] - Total assets as of October 31, 2025, were $17,628.3 million, an increase from $17,563.3 million as of April 30, 2025[27] - Current liabilities decreased to $2,626.4 million as of October 31, 2025, from $2,652.0 million as of April 30, 2025[27] Strategic Initiatives - The company is focused on integrating Hostess Brands' operations and achieving financial forecasts related to this acquisition, which may impact future performance[21] - A non-recurring pre-tax settlement charge of $0.32 per share is anticipated due to the termination of a U.S. defined benefit pension plan[45] - The change in net cumulative unallocated derivative gains and losses is projected to be $0.72 per share, but future projections are uncertain due to market conditions[44]