Financial Data and Key Metrics Changes - The company reported a sequential acceleration in comparable net sales growth, with a projected top line growth of 4% on a reported basis and about 5.5% comparable growth year over year [40][68] - The second quarter segment profit margin in coffee was 18.2%, with expectations for slight improvement in the third quarter but not surpassing 20% [37] Business Line Data and Key Metrics Changes - Organic sales in the sweet baked snacks segment exceeded expectations, with improved performance noted in convenience stores and a focus on a streamlined portfolio [7][20] - The sweet baked snacks bottom line did not meet expectations due to costs absorbed during the transition of the bakery network, but improvements are anticipated in the third and fourth quarters [20][21] - The pet portfolio is expected to see low single-digit growth in the third and fourth quarters, driven by the Milk-Bone and Meow Mix brands [25][24] Market Data and Key Metrics Changes - The company anticipates a $75 million impact from coffee tariffs in the third quarter, which will be a headwind for fiscal 2026 but a tailwind for fiscal 2027 [10][16] - The spreads portfolio, particularly peanut butter, faced challenges in the second quarter, contributing to a reduced net sales expectation for frozen handhelds and spreads [27][30] Company Strategy and Development Direction - The company is committed to investing in long-term brand health, with marketing dollars projected to increase year-over-year, maintaining about 5.5% of net sales [18] - A three-pronged plan to strengthen the portfolio by eliminating 25% of SKUs has shown positive results, particularly for core brands [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver financial outlooks for the fiscal year while advancing long-term objectives to increase shareholder value [70] - The company expects to see acceleration in growth across various segments, with a focus on innovation and marketing support [41][48] Other Important Information - The company is on track to achieve $975 million in free cash flow this fiscal year, supporting $500 million in debt repayment [62] - The pace of innovation has accelerated across various product lines, with notable advancements in Uncrustables and pet snacks [61] Q&A Session Summary Question: Insights on sweet baked goods performance - Management noted that the improvement in sweet baked snacks is sustainable, with a focus on core brands and a successful relaunch of Susie Q's [7] Question: Impact of tariffs on coffee pricing - The majority of the $0.50 tariff impact is related to green coffee tariffs, which will be a tailwind for fiscal 2027 [10] Question: SG&A guidance and marketing plans - Marketing investments will increase year-over-year, with a focus on growth brands while managing discretionary spending [18] Question: Profit results in sweet baked snacks - The second quarter's profit results did not meet expectations due to transitional costs, but improvements are expected in subsequent quarters [20] Question: Expectations for pet treats - Management anticipates strong growth for Milk-Bone in the third quarter, supported by marketing campaigns and innovation [24] Question: Reduced net sales expectation for frozen handhelds - The reduction is primarily driven by the spreads portfolio, with Uncrustables still on track for significant growth [27][30] Question: Coffee margin expectations - Coffee margins are expected to improve slightly in the third quarter but will not exceed 20% [37] Question: Tariff impact confirmation - The $75 million tariff expense is confirmed to be entirely due to coffee tariffs [58]

Financial Data and Key Metrics Changes - The company reported a sequential acceleration in comparable net sales growth, with a projected top line growth of 4% on a reported basis and about 5.5% comparable growth year over year [40][68] - The second quarter segment profit margin in coffee was 18.2%, with expectations for slight improvement in the third quarter but not surpassing 20% [37] Business Line Data and Key Metrics Changes - Organic sales in the sweet baked snacks segment exceeded expectations, with improved performance noted in convenience stores and a focus on a more streamlined portfolio [7][20] - The sweet baked snacks bottom line did not meet expectations due to costs absorbed during the transition of the bakery network, but improvements are anticipated in the third and fourth quarters [20][21] - The pet portfolio is expected to see low single-digit growth in the third and fourth quarters, driven by brands like Milk-Bone and Meow Mix [25][24] Market Data and Key Metrics Changes - The company anticipates a strong lap in the third quarter for the pet treats category, particularly for Milk-Bone, which is expected to return to growth [22] - The frozen handheld and spreads segment is projected to see a reduction in net sales expectations by over $80 million for the full year, primarily driven by the spreads portfolio [27][28] Company Strategy and Development Direction - The company is committed to investing in the long-term health of its brands, with marketing dollars projected to increase year-over-year, maintaining about 5.5% of net sales [18] - A three-pronged plan to strengthen the portfolio by eliminating 25% of SKUs has been implemented, leading to improved performance in core brands [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver financial outlook for the fiscal year while advancing long-term objectives to increase shareholder value [70] - The company expects to benefit from a tariff-off environment in fiscal 2027, which should provide a tailwind to the coffee portfolio [42][43] Other Important Information - The company is on track to generate $975 million in free cash flow this fiscal year, supporting $500 million in debt repayment [62] - The pace of innovation across various product lines has accelerated, with notable advancements in Uncrustables and pet snacks [61] Q&A Session Summary Question: Insights on sweet baked goods performance - Management noted that the improvement in sweet baked snacks is sustainable, with a focus on core brands and a successful relaunch of Susie Q's [7] Question: Impact of tariffs on coffee pricing - The majority of the $0.50 tariff impact is related to green coffee tariffs, which will be a tailwind in fiscal 2027 [10][16] Question: SG&A guidance and marketing plans - Marketing investments will increase year-over-year, with a focus on growth brands while managing discretionary spending [18] Question: Profit results in sweet baked snacks - The second quarter's bottom line for sweet baked snacks did not meet expectations due to transition costs, but improvements are expected in subsequent quarters [20] Question: Expectations for pet treats in the back half - Management anticipates strong growth for Milk-Bone in the third quarter, supported by marketing efforts and innovation [22][24] Question: Reduced net sales expectation for frozen handheld and spreads - The reduction is primarily driven by the spreads portfolio, with Uncrustables still on track for significant growth [27][28] Question: Coffee margin expectations - Coffee margins are expected to improve slightly in the third quarter but will not exceed 20%, with a target of over 20% in the fourth quarter [37] Question: Elasticity and pricing in coffee - The current outlook for the coffee portfolio includes 16% year-over-year growth, with pricing offset by a decline in volume mix [45] Question: Innovation pace and its impact - The pace of innovation has accelerated, with significant contributions from new products across various categories [61]

Financial Data and Key Metrics Changes - The company reported a second quarter segment profit margin in coffee of 18.2% with expectations for slight improvement in the third quarter but not surpassing 20% [41] - The company anticipates a net $0.50 impact from tariffs in fiscal year 2026, which will transition to a tailwind in fiscal year 2027 [11][17] Business Line Data and Key Metrics Changes - Organic sales in the Sweet Baked Snacks segment exceeded expectations, with a focus on core brands leading to improved performance [6][7] - The Sweet Baked Snacks bottom line did not meet expectations due to costs associated with the transition of the bakery network [21] - The pet portfolio is expected to see low single-digit growth in the third and fourth quarters, driven by brands like Milk Bone and Meow Mix [26] Market Data and Key Metrics Changes - The company is seeing strong growth in the away-from-home segment, contributing to overall sales momentum [45] - The Uncrustables brand is projected to reach $1 billion in sales by the end of the fiscal year, with low double-digit growth anticipated in the second half [54] Company Strategy and Development Direction - The company is committed to investing in long-term brand health, with marketing dollars projected to be up year over year [19] - A three-pronged plan to strengthen the portfolio by eliminating 25% of SKUs has been implemented, leading to improved performance in core brands [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver financial outlook for the fiscal year while advancing long-term objectives to increase shareholder value [75] - The company expects to see benefits from tariff relief in fiscal year 2027, contributing positively to the bottom line [48] Other Important Information - The company is focused on innovation across various segments, with notable advancements in Uncrustables and pet snacks [65] - The company aims to reduce net debt to EBITDA from around four times to three times by fiscal year 2027 [67] Q&A Session Summary Question: How sustainable is the improvement in Sweet Baked Snacks? - Management noted that the improvement is sustainable due to a focused portfolio and strong brand performance [6][8] Question: What is the impact of tariffs on coffee pricing? - The majority of the $0.50 tariff impact is related to green coffee, which will be a tailwind in fiscal year 2027 [11][17] Question: What are the expectations for marketing plans and SG&A? - Marketing investments will increase year over year, while SG&A spend has been sharpened across the network [19] Question: What is the outlook for the pet treats category? - Management expects a strong lap in the third quarter, with Milk Bone anticipated to return to growth [23][24] Question: How is the company addressing pricing in the current environment? - The company is committed to holding prices and providing value across its broad portfolio [71] Question: What is the expected growth for Uncrustables? - Uncrustables is expected to achieve low double-digit growth in the second half, supporting its path to $1 billion in sales [54] Question: How is the company managing innovation? - The pace of innovation has accelerated, with significant developments in various product lines [65] Question: What is the company's strategy for debt reduction? - The company plans to generate $975 million in free cash flow this fiscal year to support debt paydown [67]

Financial Data and Key Metrics Changes - Net sales increased by 3% in the second quarter, with comparable net sales rising by 5% after excluding prior year sales related to divested businesses and foreign currency exchange [21] - Adjusted gross profit decreased by $90 million, or 10%, compared to the prior year, primarily due to higher commodity costs and unfavorable volume mix [22] - Adjusted earnings per share was $2.10, a decrease of 24% versus the prior year [23] Business Line Data and Key Metrics Changes - Uncrustables brand net sales grew by 7% at the total company level, with significant household penetration potential remaining [4][5] - Café Bustelo brand net sales increased by 41% in the U.S. retail coffee portfolio, driven by distribution expansion and marketing investments [8] - Milk-Bone brand showed sequential improvement in net sales growth, with expectations to return to growth in the latter half of the fiscal year [9] - Meow Mix brand outpaced the dry cat food category, growing sales nearly three times the category rate [11] Market Data and Key Metrics Changes - U.S. retail coffee segment net sales increased by 21%, driven by higher pricing to recover increased commodity costs [23] - U.S. retail frozen handheld and spreads saw a net sales decrease of 5%, primarily due to declines in peanut butter and fruit spreads [24] - U.S. retail pet foods net sales decreased by 7%, reflecting a decline in dog snacks [25] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation, and fostering a be-bold mindset [3] - The company aims to position the Uncrustables brand to generate over $1 billion in net sales by the end of the fiscal year [7] - The Hostess brand strategy includes reducing SKU count by 25% to simplify offerings and prioritize high-velocity products [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic environment, focusing on elements within their control to drive long-term growth [20] - The company anticipates full-year net sales guidance to increase by 3.5%-4.5%, reflecting challenges from divested businesses [29] - Adjusted earnings per share guidance range is narrowed to $8.75-$9.25, maintaining the previous midpoint [33] Other Important Information - Free cash flow for the second quarter was $280 million, down from $317 million in the prior year [28] - The company plans to prioritize debt reduction, aiming to pay down $500 million of debt annually [28] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is omitted.

Financial Data and Key Metrics Changes - Net sales increased by 3% in the second quarter, with comparable net sales rising by 5% after excluding prior year sales related to divested businesses and foreign currency exchange [22] - Adjusted gross profit decreased by $90 million, or 10%, compared to the prior year, primarily due to higher commodity costs and unfavorable volume mix [23] - Adjusted earnings per share was $2.10, a decrease of 24% versus the prior year [24] Business Line Data and Key Metrics Changes - Uncrustables brand net sales grew by 7% at the total company level, with significant household penetration potential remaining [4][5] - Café Bustelo brand net sales increased by 41% in the U.S. retail coffee portfolio, driven by distribution expansion and marketing investments [8] - Milk-Bone brand showed sequential improvement in net sales growth, with expectations to return to growth in the latter half of the fiscal year [9][10] - Meow Mix brand outpaced the dry cat food category, growing sales nearly three times the category rate [11] Market Data and Key Metrics Changes - U.S. retail coffee segment net sales increased by 21%, with net price realization contributing significantly to this growth [24] - U.S. retail frozen handheld and spreads saw a net sales decline of 5%, primarily due to decreases in peanut butter and fruit spreads [25] - U.S. retail pet foods experienced a 7% decrease in net sales, driven by declines in dog snacks [26] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation, and fostering a be-bold mindset [3] - The strategy includes significant investments in brand-building and innovation, particularly for key growth platforms like Uncrustables and Café Bustelo [4][7] - The company aims to stabilize and position the Hostess brand for long-term growth through SKU reduction and improved marketing [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic environment, emphasizing the importance of controlling internal factors [21] - The company anticipates continued double-digit growth for the Café Bustelo brand and a positive outlook for the Uncrustables brand [9][18] - Future growth opportunities are expected in the away from home business, which is projected to grow to approximately 10% of total company net sales this fiscal year [20] Other Important Information - Free cash flow for the second quarter was $280 million, down from $317 million in the prior year [29] - The company plans to prioritize debt reduction, aiming to pay down $500 million of debt annually [29] - Full-year net sales guidance is narrowed to an increase of 3.5%-4.5%, reflecting various headwinds from divested businesses [30][31] Q&A Session Summary Question: What are the growth expectations for the Uncrustables brand? - The Uncrustables brand is on track to generate over $1 billion in net sales by the end of the fiscal year, with significant household penetration potential remaining [7] Question: How is the company addressing commodity cost pressures? - The company is managing commodity costs through flexible pricing strategies and anticipates normalization over time [16] Question: What is the outlook for the Hostess brand? - The Hostess brand is expected to stabilize performance and position for sustainable long-term growth through strategic actions and marketing efforts [15]

Core Strategy - The J.M. Smucker Company focuses on innovation and portfolio discipline as key enablers of long-term growth, strengthening core brands and aligning investments with evolving consumer needs [1][5] Consumer-led Innovation - Consumer-led innovation is a central growth driver across categories, with the Milk-Bone brand introducing new offerings like PB Bites and seasonal varieties to maintain engagement and brand loyalty despite selective spending by pet owners [2] SKU Rationalization - In sweet baked snacks, the company is rationalizing SKUs within the Hostess portfolio, prioritizing high-return sub-brands and discontinuing lower-performing products to enhance execution and profitability, with Donettes being a strong contributor [3] Frozen Handheld and Spreads Growth - The company emphasizes ongoing momentum in its frozen handheld and spreads portfolio, particularly through the Uncrustables platform, benefiting from broader distribution and expansion in convenience and away-from-home channels [4][8] Sales Growth Projections - The J.M. Smucker expects fiscal 2026 net sales to grow between 3% and 5%, with comparable net sales projected to advance roughly 4.5% to 6.5%, outperforming competitors like General Mills and Kraft Heinz [6]

Core Viewpoint - The J.M. Smucker Co. has filed a federal lawsuit against Trader Joe's, alleging that the latter has copied its Uncrustables frozen sandwiches, claiming that the similarities in design and packaging infringe on Smucker's intellectual property rights [1][2]. Group 1: Lawsuit Details - Smucker's lawsuit was filed in Ohio federal court, asserting that Trader Joe's round, crustless sandwiches with crimped edges closely imitate Uncrustables [1]. - The company does not object to other brands selling similar products but insists that Trader Joe's cannot use Smucker's intellectual property for such sales [2]. - Smucker claims that Trader Joe's packaging design violates its trademarks, specifically citing the use of similar blue lettering and imagery [5]. Group 2: Customer Confusion - The lawsuit argues that the similarities between the products have already led to customer confusion, referencing a social media post where a user mistakenly believed Trader Joe's sandwiches were produced by Smucker [7]. Group 3: Legal Demands - Smucker is seeking restitution and a court order for Trader Joe's to destroy the infringing sandwich products and their packaging [8].

Financial Data and Key Metrics Changes - The company raised its full-year net sales guidance to 3% to 5% growth compared to the prior year, driven by strong performance in the coffee segment and Uncrustables [34][39] - Adjusted earnings per share guidance remains at $8.50 to $9.50, reflecting the impact of higher costs from U.S. tariffs [34][35] - The company aims to generate over $1 billion in free cash flow annually, with a disciplined capital deployment model [3][35] Business Line Data and Key Metrics Changes - The coffee segment is performing well despite record-high green coffee prices, with favorable price elasticity of demand trends [4][42] - Uncrustables brand is expected to exceed $1 billion in annual net sales, driven by marketing, distribution gains, and innovation [10][34] - The pet segment, particularly Milk-Bone and Meow Mix, is experiencing growth, with Milk-Bone's Peanut Buttery Bites being a significant innovation [18][56] Market Data and Key Metrics Changes - The U.S. retail coffee market shows resilience, with over 70% of coffee consumed at home, making it affordable despite inflation [42] - The cat food category is benefiting from positive pet population trends, with Meow Mix showing strong momentum [21][56] - The frozen handheld and spreads market is seeing increased distribution for Uncrustables, now available in over 30,000 convenience stores [16][51] Company Strategy and Development Direction - The company is focused on long-term growth through brand-building and innovation, particularly in key growth platforms like Café Bustelo and Uncrustables [3][4] - A strategy to reduce SKU count by 25% for the Hostess brand aims to simplify offerings and enhance profitability [22][32] - The company is committed to maintaining a balanced approach to capital deployment, including debt reduction and dividend growth [35][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic environment while delivering organic growth [39][40] - The outlook for coffee remains strong, with expectations of continued resilience despite significant inflation [45][46] - Management anticipates sequential profit improvement across various segments, including Sweet Baked Snacks and Uncrustables [49][50] Other Important Information - The company is closing its Indianapolis manufacturing facility, which is expected to deliver $30 million in annual cost savings [22] - The Milk-Bone brand is leveraging cultural relevance to connect with younger consumers, enhancing its market position [19][20] Q&A Session Summary Question: What are the key takeaways from recent results? - The company delivered 3% comparable growth and raised its top-line guidance, primarily due to strong coffee performance [39][40] Question: How is the coffee category performing in terms of consumer behavior? - The coffee portfolio is performing well, with consumption remaining solid due to affordability at home despite inflation [42][43] Question: What are the expectations for Uncrustables moving forward? - Uncrustables is expected to continue its strong performance with new distribution and innovative product offerings [51][53]

Financial Data and Key Metrics Changes - Total company comparable net sales increased by 2%, and when excluding contract manufacturing sales related to divested pet food brands, net sales increased by 3% compared to the prior year [6][31] - Adjusted gross profit decreased by $89 million or 11% compared to the prior year, reflecting higher commodity costs and unfavorable volume mix [33] - Adjusted earnings per share was $1.90, a decrease of 22% versus the prior year, driven by reduced gross profit and increased marketing investments [35][48] Business Line Data and Key Metrics Changes - Uncrustables brand grew net sales in double digits, driven by national advertising and distribution gains [7][11] - Cafe Bustelo brand net sales increased by 36%, with a 17% increase in volume mix [11] - Milk Bone brand experienced a decline in net sales due to lapping prior year distribution gains, while Meow Mix brand saw an increase in volume mix [12][13] - Sweet Baked Snacks segment net sales decreased by 24%, primarily driven by a decrease in snack cakes [38] Market Data and Key Metrics Changes - In the U.S. retail coffee segment, net sales increased by 15%, with net price realization contributing an 18 percentage point increase [35] - Pet foods segment net sales decreased by 8%, reflecting declines in dog snacks and contract manufacturing sales related to divested brands [37] - International and away from home segment net sales grew by 7%, driven by strong performance in the away from home business [27][39] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation, and fostering a bold mindset [5][18] - Actions include prioritizing resources towards key growth platforms and optimizing SKU counts to improve operational efficiencies [14][15] - The company aims to generate over $1 billion in free cash flow annually and has achieved $100 million in total run rate synergies from the Hostess Brands acquisition [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains dynamic, with ongoing input inflation and changes in consumer behavior impacting outlook [42] - The company anticipates net sales to increase by 3% to 5% for the fiscal year, reflecting improved price elasticity of demand assumptions [42][43] - Management remains confident in the long-term growth outlook and the ability to deliver shareholder value despite external challenges [29][49] Other Important Information - The company plans to prioritize debt reduction, aiming to pay down approximately $500 million of debt in each of the next two fiscal years [41] - Free cash flow projection has been increased by $100 million to approximately $975 million, driven by accelerated R&D and tax deductions [47] Q&A Session Summary Question: What are the expectations for the coffee segment given the current inflationary pressures? - Management indicated that the coffee category remains resilient despite inflation, with approximately 70% of coffee drinking occasions occurring at home, providing an affordable alternative to coffee shops [22][29] Question: How is the company addressing the challenges in the Sweet Baked Snacks segment? - The company is taking decisive actions to stabilize the Hostess brand, including SKU optimization and closing a manufacturing facility to improve margins and operational efficiencies [14][15] Question: What is the outlook for the pet food segment? - Management expressed confidence in the long-term growth outlook for the pet portfolio, driven by positive pet population trends and premiumization opportunities [25][29]

Financial Data and Key Metrics Changes - The company reported a 1% decrease in net sales for the first quarter, while comparable net sales increased by 2%, excluding prior year sales related to divested businesses and foreign currency exchange [31] - Adjusted gross profit decreased by $89 million or 11% compared to the prior year, primarily due to higher commodity costs and unfavorable volume mix [33] - Adjusted earnings per share was $1.90, a decrease of 22% versus the prior year, but exceeded expectations due to better-than-anticipated net sales [34] Business Line Data and Key Metrics Changes - In the US retail coffee segment, net sales increased by 15%, driven by an 18 percentage point increase from net price realization [34] - The US retail pet foods segment saw a decrease in net sales by 8%, primarily due to a decline in dog snacks and lower contract manufacturing sales related to divested pet food brands [36] - The Sweet Baked Snacks segment experienced a 24% decrease in net sales, with a 54% decrease in segment profit reflecting unfavorable volume mix and higher costs [37] Market Data and Key Metrics Changes - The away from home business grew net sales by 14% on a comparable basis, driven by coffee and Uncrustables sandwiches [39] - International net sales decreased by 6% on a comparable basis, primarily reflecting a decrease in the coffee portfolio [39] - The company anticipates a higher US tariff impact on green coffee costs, which is expected to be a 50¢ headwind for the fiscal year [29] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating organic growth, embedding transformation in everyday operations, and fostering a bold mindset [5] - The Uncrustables brand is projected to generate over $1 billion in net sales by the end of the fiscal year, continuing strong double-digit growth [11] - The company is reducing SKU count by 25% for the Hostess brand to improve operational efficiencies and drive margin expansion [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains dynamic, with ongoing input inflation and changes in consumer behavior impacting the fiscal year outlook [41] - The company is revising its full-year net sales expectations to increase by 3% to 5%, primarily due to the strength of the coffee portfolio [28] - Management remains confident in the long-term growth outlook and the ability to deliver shareholder value despite external challenges [30] Other Important Information - The company achieved $100 million in total run rate synergies from the Hostess Brands acquisition [16] - Free cash flow for the first quarter was negative $94.9 million, reflecting a decrease in cash provided by operating activities [39] - The company plans to prioritize debt reduction, aiming to pay down approximately $500 million of debt in each of the next two fiscal years [40] Q&A Session Summary Question: What are the expectations for the coffee segment? - The coffee segment is expected to remain resilient despite inflationary pressures, with approximately 70% of coffee drinking occasions occurring at home [21] Question: How is the company addressing the impact of tariffs? - The company is working to mitigate cost increases through alternative sourcing strategies and responsible pricing [45] Question: What is the outlook for the Sweet Baked Snacks segment? - The Sweet Baked Snacks segment is anticipated to improve sequentially, with increased dollar sales and volume growth noted in the Hostess brand [25]