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]
The J.M. Smucker Co. Announces Fiscal 2026 First Quarter Results