The J.M. Smucker Q3 Earnings Top Estimates, Sales Dip on Low Volumes

Core Insights - The J. M. Smucker Company (SJM) reported third-quarter fiscal 2025 results with adjusted earnings per share increasing 5% year over year, surpassing estimates, while net sales declined 2% and missed consensus expectations [1][3][4] Financial Performance - Adjusted earnings per share reached $2.61, exceeding the Zacks Consensus Estimate of $2.37 [3] - Net sales totaled $2,186 million, down 2% year over year, missing the Zacks Consensus Estimate of $2,221 million [4] - Excluding noncomparable net sales from last year and the Hostess Brands acquisition, net sales dipped 1%, with a 5% decline in volume/mix partially offset by a 3% increase in net price realization [4] Segment Performance - U.S. Retail Pet Foods: Sales fell 9% to $423 million, with a 9-percentage-point adverse impact from volume/mix, while profit increased 7% to $116.8 million [6] - U.S. Retail Coffee: Sales grew 2% to $740.6 million, driven by a 9% increase in net price realization, despite a 7% decline in volume/mix [7] - U.S. Retail Frozen Handheld and Spreads: Sales increased 2% to $445.2 million, while profit decreased 5% to $99.2 million [8] - Sweet Baked Snacks: Sales declined 7% to $278.6 million, with profit slumping 19% to $54.8 million [9] - International and Away from Home: Net sales dropped slightly to $298.6 million, but profit increased 22% to $61.6 million [10] Financial Health - The company ended the quarter with cash and cash equivalents of $47.2 million and long-term debt of $6,385.5 million [12] - Cash flow from operating activities was $239.4 million, with free cash flow at $151.3 million [12] Future Guidance - Fiscal 2025 net sales are now anticipated to increase by 7.25%, slightly down from previous guidance [14] - Adjusted EPS for fiscal 2025 is projected in the range of $9.85-$10.15, up from earlier expectations [16] - Management's guidance does not include effects from the planned divestiture of certain Sweet Baked Snacks brands, expected to impact net sales by approximately $10 million [17]