Core Insights - The J. M. Smucker Company (SJM) is a large-cap stock with a market capitalization of $10.6 billion, specializing in branded food and beverage products [1][2] - SJM has a strong portfolio of iconic brands, including Folgers, Dunkin', Milk-Bone, and Meow Mix, which contribute to its market leadership in coffee and pet foods [2] Financial Performance - SJM's stock has experienced a decline of 17.7% from its 52-week high of $120.76, reached on April 3, 2025 [3] - Over the past six months, SJM shares fell by 8.7%, and over the past 52 weeks, they dipped by 9.1%, underperforming the State Street Consumer Staples Select Sector SPDR ETF (XLP) [5] - In Q3, SJM reported an adjusted EPS of $2.38, surpassing Wall Street expectations of $2.27, with revenue of $2.34 billion, exceeding forecasts of $2.32 billion [7] Market Outlook - Analysts maintain a "Moderate Buy" rating for SJM, with a mean price target of $126.20, indicating a potential upside of 27% from current price levels [8]

Financial Data and Key Metrics Changes - The company is maintaining a cautious outlook for fiscal 2027, particularly in the sweet baked snacks segment, which is expected to experience a low double-digit decline [27][28] - The coffee portfolio is projected to benefit from deflation in green coffee costs, with expectations of mid-20s segment profit margin in the fourth quarter [21][22] - The company has acknowledged a $75 million unmitigated tariff impact affecting this fiscal year, which will be lapped next fiscal year [48][49] Business Line Data and Key Metrics Changes - Sweet baked snacks reported a 4.2% low double-digit decline, attributed to category trends and operational challenges [27][28] - The pet segment showed strong performance, with Meow Mix achieving 5% top-line growth, while Milk-Bone also started to grow again [55][56] - Uncrustables continues to be a key growth driver, with total company business growing 10% and significant distribution gains in convenience stores [61][62] Market Data and Key Metrics Changes - The coffee business remains strong, with no abnormalities in inventory levels reported, and Bustelo showing great growth [31][55] - The sweet baked snacks segment is navigating through a temporary disruption due to a plant fire, impacting both top line and bottom line [45][46] Company Strategy and Development Direction - The company is focusing on operational improvements, disciplined capital allocation, and governance enhancements, particularly in light of recent engagements with Elliott [8][9] - There is an emphasis on stabilizing the sweet baked snacks brand and returning Hostess to growth through prudent investments and SKU rationalization [11][40] - The company is committed to maintaining a diverse portfolio across multiple categories, including pet, coffee, and food and snacking [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $9 midpoint EPS guidance, with upside potential primarily from the coffee portfolio [67][68] - The company is navigating operational challenges in the sweet baked snacks segment but anticipates improvements in profitability as stabilization efforts continue [28][59] - Management remains optimistic about the coffee portfolio's resilience and strength, expecting profit and margin improvements moving forward [21][22] Other Important Information - The company will begin amortizing the Hostess trademark over a longer period, reflecting a reduced long-term growth rate of 2% [92][93] - The overall pace of innovation is performing well, with a focus on meeting consumer needs and driving growth through new product introductions [76][77] Q&A Session Summary Question: Insights on engagement with Elliott - The engagement has been constructive, focusing on operational improvements, portfolio management, and governance [8][9] Question: Changes in promotional strategy for sweet baked snacks - The strategy aims to stabilize the brand and improve profitability through SKU rationalization and prudent investments [11] Question: Coffee pricing strategy and deflation impact - The company is navigating deflation and its implications on pricing, with a focus on maintaining profitability across the coffee portfolio [36][38] Question: Performance expectations for sweet baked snacks in fiscal 2027 - It is early to predict the growth trajectory, but stabilization efforts are ongoing to improve market share performance [28][29] Question: Tariff headwinds and their expected impact - A $75 million unmitigated tariff impact is expected to reverse in the next fiscal year, providing a potential boost to profits [48][49] Question: Performance of the pet segment - The pet segment is performing well, with growth driven by innovation and premiumization trends [55][56] Question: Amortization of the Hostess trademark - The company will begin amortizing the Hostess trademark, reflecting a more prudent approach to resource allocation [92][93]

Financial Data and Key Metrics Changes - The company maintained its EPS guidance at a wide range, indicating confidence in achieving the $9 midpoint, with upside potential primarily from the coffee portfolio [67] - The coffee segment is expected to see profit and margin improvement due to deflation benefits and the lapping of tariff impacts, with a projected mid-20s segment profit margin for the fourth quarter [21][48] Business Line Data and Key Metrics Changes - The sweet baked snacks segment experienced a low double-digit decline of 4.2%, with expectations for a softer fourth quarter due to category trends and operational challenges [27][45] - The pet segment showed strong performance, particularly with Meow Mix achieving 5% top-line growth, while Milk-Bone also started to grow again [54] Market Data and Key Metrics Changes - The coffee business continues to perform well, with no abnormalities in inventory levels reported, and strong growth in brands like Bustelo [31] - The sweet baked snacks category is navigating challenges, including a plant fire and higher bakery network costs, impacting profitability [45] Company Strategy and Development Direction - The company is focusing on operational improvements, disciplined capital allocation, and portfolio management to drive organic growth and profit restoration [8][9] - There is an ongoing emphasis on innovation, particularly in the Uncrustables brand, which is expected to continue as a key growth driver [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing engagement with Elliott, highlighting alignment on operational improvements and governance [8][9] - The outlook for the coffee portfolio is positive, with expectations for continued growth and profitability despite current challenges in other segments [21][31] Other Important Information - The company is beginning to amortize the Hostess trademark over a longer period due to a revised long-term growth rate of 2% [92][95] - SG&A expenses are expected to be flat to slightly down, driven by efficiencies and prudent management of spending [68][73] Q&A Session Summary Question: Insights on engagement with Elliott - Management noted constructive discussions with Elliott, focusing on operational improvements and capital allocation [8] Question: Changes in promotional strategy for sweet baked snacks - The company aims to stabilize the brand and return to growth, with a focus on key products [11] Question: Portfolio reshaping and use of proceeds - Management confirmed ongoing portfolio reviews and potential for share repurchases as leverage decreases [19] Question: Coffee pricing strategy and deflation impact - The company is navigating deflation and its implications on pricing, with a focus on maintaining profitability [36] Question: Performance expectations for sweet baked snacks in FY 2027 - Management indicated it is early to predict growth trajectory, acknowledging a softer fourth quarter [28] Question: Inventory dynamics in coffee - No abnormalities in coffee inventory were reported, with continued strong performance expected [31] Question: Talent investment for Hostess stabilization - Management expressed confidence in the current team and emphasized operational improvements [40] Question: Incremental items affecting sweet baked snacks performance - Higher bakery network costs and category trends were cited as challenges impacting performance [45] Question: SG&A guidance and spending management - The company is maintaining a prudent approach to spending, with efficiencies contributing to guidance [68] Question: Innovation pace and product sales - Innovation is performing well, with a focus on meeting consumer needs and driving growth [76]

Financial Data and Key Metrics Changes - The company is maintaining a cautious outlook for fiscal 2027, particularly in the sweet baked snacks segment, which is expected to experience a low double-digit decline [25][26] - The coffee portfolio is projected to see profit and margin improvements due to deflation benefits and the lapping of tariffs, with expectations of a mid-20s segment profit margin in the fourth quarter [20][46] Business Line Data and Key Metrics Changes - The sweet baked snacks segment is undergoing stabilization efforts, with a focus on core brands and SKU rationalization, aiming for a 2% growth trajectory [10][26] - The pet segment showed strong performance, particularly with Meow Mix and Milk-Bone, while Pup-Peroni and Canine Carry Outs faced challenges due to competition and private label products [52][53] Market Data and Key Metrics Changes - The coffee business continues to perform well, with no abnormalities in inventory levels reported, and Bustelo showing significant growth [30][52] - The sweet baked snacks segment is facing headwinds from category trends and operational challenges, including a recent plant fire impacting profitability [44][46] Company Strategy and Development Direction - The company is focused on operating improvements, disciplined capital allocation, and governance enhancements, particularly in light of recent engagements with Elliott [7][8] - There is an ongoing review of the portfolio to ensure diversity and optionality, with a commitment to maintaining a strong brand presence across multiple categories [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the sweet baked snacks segment but remains optimistic about stabilization and future growth [26][39] - The coffee segment is expected to benefit from deflation and improved profit margins, contributing positively to overall performance [20][66] Other Important Information - The company has begun amortizing the Hostess trademark, reflecting a more prudent approach to brand investment and resource allocation [90][91] - The overall pace of innovation is performing well, with a focus on meeting consumer needs and driving growth through new product introductions [75][76] Q&A Session Summary Question: Insights on engagement with Elliott - Management noted constructive discussions with Elliott, focusing on operating improvements, portfolio management, and governance [7][8] Question: Future growth in sweet baked snacks - Management indicated that it is early to predict fiscal 2027 growth, acknowledging a softer fourth quarter due to category trends and operational disruptions [26][39] Question: Coffee pricing strategy and inventory dynamics - Management confirmed no abnormalities in coffee inventory and expressed confidence in the coffee business's performance [30][52] Question: Profitability expectations for sweet baked snacks - Management acknowledged current profitability is below expectations but anticipates improvement in the fourth quarter [58] Question: Amortization of Hostess trademark - Management explained the decision to amortize the Hostess trademark over a longer period due to revised growth expectations [90][91]

Financial Data and Key Metrics Changes - The company reported a 7% increase in net sales for the third quarter, with comparable net sales rising 8% when excluding prior year sales related to divested businesses [24] - Adjusted earnings per share decreased by 9% year-over-year to $2.38, reflecting higher costs and unfavorable volume mix [26] - Adjusted gross profit decreased by $28 million or 3% compared to the prior year, impacted by higher commodity costs and tariffs [25] Business Line Data and Key Metrics Changes - U.S. Retail Coffee segment net sales increased by 23%, driven by higher net pricing across the portfolio [26] - U.S. Retail Frozen Handheld and Spreads segment net sales increased by 2%, with Uncrustables sandwiches contributing to growth [27] - Sweet Baked Snacks segment net sales decreased by 19%, primarily due to executional challenges and higher costs [29] Market Data and Key Metrics Changes - Comparable net sales in the International and Away From Home segment grew by 12%, with the Away From Home business seeing double-digit growth [20] - The company anticipates strong double-digit growth in the Away From Home business, which is expected to account for approximately 10% of total company net sales this fiscal year [21] Company Strategy and Development Direction - The company is focused on three objectives: advancing long-term growth strategy, improving profitability, and maintaining disciplined capital deployment [4] - The strategy includes prioritizing organic growth opportunities, debt paydown, and shareholder returns through dividends and share repurchases [4] - The company is committed to consumer-led innovation and expanding its portfolio in attractive categories [12] Management's Comments on Operating Environment and Future Outlook - Management noted that the third quarter results exceeded expectations, driven by strong demand for leading brands and disciplined cost management [3] - The company is optimistic about sustaining momentum and building iconic brands that resonate with consumers [14] - Recent operational challenges in the Sweet Baked Snacks segment are expected to create near-term volatility but are aimed at long-term stabilization and growth [19] Other Important Information - The company recognized a $508 million impairment charge related to the Sweet Baked Snacks reporting unit and a $454 million impairment charge related to the Hostess brand trademark [23] - A fire at the Emporia, Kansas manufacturing facility is expected to reduce fourth-quarter net sales by approximately $25 million [32] - The company plans to prioritize debt reduction, aiming for a leverage ratio at or below 3 times net debt to EBITDA by the end of fiscal year 2027 [31] Q&A Session Summary Question: What are the growth expectations for the Uncrustables brand? - The Uncrustables brand is expected to achieve $1 billion in annual net sales this fiscal year, with a 10% increase in net sales [5][6] Question: How is the company addressing challenges in the Sweet Baked Snacks segment? - The company is reducing SKU count by 25% to simplify offerings and anticipates benefits from operational efficiency in the next fiscal year [18][19] Question: What is the outlook for the U.S. Retail Coffee segment? - The U.S. Retail Coffee segment is expected to see continued growth, with net sales anticipated to increase significantly due to higher net pricing [34]

Financial Data and Key Metrics Changes - The company reported a 7% increase in net sales for the third quarter, with comparable net sales rising by 8% when excluding prior year sales related to divested businesses [24] - Adjusted earnings per share decreased by 9% to $2.38 compared to the prior year [26] - Adjusted gross profit decreased by $28 million or 3% due to higher costs and unfavorable volume mix [25] Business Line Data and Key Metrics Changes - U.S. Retail Coffee segment net sales increased by 23%, driven by higher net pricing [27] - U.S. Retail Frozen Handheld and Spreads segment net sales increased by 2%, with Uncrustables sandwiches contributing to growth [27] - Sweet Baked Snacks segment net sales decreased by 19%, reflecting operational challenges and higher costs [29] Market Data and Key Metrics Changes - Comparable net sales in International and Away From Home grew by 12%, with the Away From Home business seeing double-digit growth [20] - The U.S. Retail Coffee segment's profit decreased by 5% due to higher commodity costs and tariffs [27] - The pet food segment saw a 1% decrease in net sales, primarily due to lapping contract manufacturing sales related to divested brands [28] Company Strategy and Development Direction - The company is focused on three objectives: advancing long-term growth strategy, improving profitability, and maintaining disciplined capital deployment [4] - The strategy includes prioritizing organic growth opportunities, debt paydown, and shareholder returns [4] - The company aims to build a cohesive portfolio supported by strong marketing capabilities and a connected supply chain [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum and building iconic brands that resonate with consumers [14] - The company anticipates a reduction in net sales due to a fire at the Emporia manufacturing facility, estimating a $25 million impact in the fourth quarter [32] - The outlook for fiscal year 2026 includes a projected net sales increase of 3.5%-4% compared to the prior year [32] Other Important Information - The company recognized significant impairment charges of $508 million related to Sweet Baked Snacks and $454 million for the Hostess brand [23] - Free cash flow for the third quarter was reported at $487 million, a significant increase from $151 million in the prior year [30] - The company plans to prioritize debt reduction, aiming for a leverage ratio at or below three times net debt to EBITDA by the end of fiscal year 2027 [31] Q&A Session Summary Question: What are the growth expectations for the Uncrustables brand? - The Uncrustables brand is expected to achieve $1 billion in annual net sales this fiscal year, with a 10% growth in net sales [5][6] Question: How is the company addressing challenges in the Sweet Baked Snacks segment? - The company is reducing SKU count by 25% and closing the Indianapolis manufacturing facility to improve operational efficiency and reduce costs [18][19] Question: What is the impact of recent changes in trade policy on the coffee segment? - The exclusion of tariffs on green coffee is expected to benefit profit margins in the upcoming fiscal year [15]

Financial Data and Key Metrics Changes - The company reported a 7% increase in net sales for the third quarter, with comparable net sales rising 8% when excluding prior year sales related to divested businesses [24] - Adjusted earnings per share decreased by 9% to $2.38 compared to the prior year [26] - Adjusted gross profit decreased by $28 million or 3% due to higher costs and unfavorable volume mix [25] Business Line Data and Key Metrics Changes - U.S. Retail Coffee segment net sales increased by 23%, driven by higher net pricing [26] - U.S. Retail Frozen Handheld and Spreads segment net sales increased by 2%, with Uncrustables sandwiches contributing to growth [27] - Sweet Baked Snacks segment net sales decreased by 19%, reflecting executional challenges and higher costs [30] Market Data and Key Metrics Changes - Comparable net sales in the International and Away From Home segment grew by 12%, driven by strong performance in away-from-home channels [19] - The Away From Home business is expected to grow to approximately 10% of total company net sales this fiscal year [20] - The company anticipates a long-term growth in pet populations, benefiting the pet food segment [17] Company Strategy and Development Direction - The company is focused on three objectives: advancing long-term growth strategy, improving profitability, and maintaining disciplined capital deployment [4] - The strategy includes prioritizing resources towards high-growth brands like Uncrustables, Café Bustelo, Milk-Bone, and Meow Mix [5] - The company is committed to reducing SKU count by 25% in the Sweet Baked Snacks segment to simplify offerings and improve operational efficiency [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the Sweet Baked Snacks segment but remains focused on stabilizing performance and improving profitability over time [23] - The company expects to maintain adjusted earnings per share guidance of $8.75-$9.25 for the fiscal year [37] - A recent fire at the Emporia, Kansas manufacturing facility is expected to reduce fourth-quarter net sales by approximately $25 million [33] Other Important Information - The company recognized significant impairment charges of $508 million related to Sweet Baked Snacks and $454 million for the Hostess brand [23] - Free cash flow for the third quarter was reported at $487 million, a significant increase from $151 million in the prior year [31] - The company plans to prioritize debt reduction, aiming to pay down $500 million of debt annually [32] Q&A Session Summary Question: What are the growth expectations for the Uncrustables brand? - The Uncrustables brand is expected to achieve $1 billion in annual net sales this fiscal year, with a 10% growth in net sales [5] Question: How is the company addressing challenges in the Sweet Baked Snacks segment? - The company is reducing SKU count and closing a manufacturing facility to improve operational efficiency and reduce costs [18] Question: What is the outlook for the Away From Home business? - The Away From Home business is anticipated to grow significantly, contributing approximately 10% to total company net sales this fiscal year [20]

Summary of J. M. Smucker Company Conference Call Company Overview - **Company**: The J. M. Smucker Company (NYSE:SJM) - **Event**: 2026 Conference on February 18, 2026 - **Key Leadership**: Mark Smucker (CEO), Tucker Marshall (CFO), Crystal Beiting (VP, Investor Relations) Core Industry Insights - **Industry**: Consumer Goods, specifically focusing on coffee, snacking, and pet food - **Market Position**: Over 95% of U.S. retail channel sales come from categories where the company holds either the number 1 or number 2 branded position [6][5][4] Key Points and Arguments 1. **Growth Strategy**: The company has a clear strategy to drive growth and achieve long-term financial goals, having transformed its portfolio over the years [4][3] 2. **Financial Performance**: Anticipated net sales for the fiscal year are over $9 billion, marking the 7th consecutive year of top-line growth when excluding divested pet food brands [5][6] 3. **Profitability Focus**: The company is focused on improving profitability and earnings growth, with significant margin expansion expected in the near term [5][7] 4. **Leadership Changes**: Recent leadership updates aim to enhance execution of the long-term growth strategy and improve profitability [4][3] 5. **Innovation and New Products**: Approximately $300 million in net sales is expected from new products launched in the last two years, reflecting a 35% increase compared to the previous period [7][6] 6. **Coffee Segment**: The coffee category remains strong, with the company holding leading brands like Folgers and Dunkin'. Café Bustelo is expected to surpass $500 million in net sales this fiscal year, driven by innovative marketing and product expansion [11][10] 7. **Frozen Handheld and Spreads**: The Uncrustables brand is projected to achieve $1 billion in annual net sales, growing at a 20% CAGR over the past decade [17][18] 8. **Peanut Butter and Fruit Spreads**: The Jif brand is modernizing its offerings with a new line, Jif Simply, to meet evolving health preferences [32][33] 9. **Pet Segment**: The company has leading brands in the pet food category, with significant growth potential in both dog and cat food markets [34][37] 10. **Sweet Baked Snacks**: The company is working on stabilizing the Hostess brand through SKU reduction and operational efficiency, while also launching new products to drive growth [41][42] Additional Important Insights - **Capital Deployment**: The company is committed to a disciplined capital deployment model, focusing on organic growth, debt reduction, and shareholder returns through dividends and share repurchases [49][50] - **Free Cash Flow**: The goal is to generate over $1 billion in free cash flow annually, supporting long-term growth and margin expansion [50][52] - **Market Trends**: The company is adapting to consumer preferences, particularly in the pet food segment, where premiumization and e-commerce trends are driving growth [34][39] Conclusion - The J. M. Smucker Company is positioned for continued growth with a strong portfolio, clear strategic focus, and commitment to profitability and shareholder value. The leadership changes and innovative product strategies are expected to enhance performance across its various segments [52][45]

CAGNY CONFERENCE 2026 BUSINESS UPDATE FEBRUARY 18, 2026 MARK SMUCKER CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIR OF THE BOARD FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows, that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by those forward-looking statements. Us ...

Company Overview - The J. M. Smucker Company (SJM) is based in Orrville, Ohio, and specializes in manufacturing and marketing branded food and beverage products, with a market cap of $10.8 billion [1] - SJM's principal products include peanut butter, shortening and oils, fruit spreads, canned milk, baking mixes, ready-to-spread frostings, flour, baking ingredients, juices, and beverages [1] Market Position - SJM is classified as a "large-cap stock" due to its market cap exceeding $10 billion, highlighting its size and influence in the packaged foods industry [2] - The company boasts a strong portfolio of iconic brands such as Folgers, Dunkin', Milk-Bone, and Meow Mix, which contribute to its market leadership in coffee and pet foods [2] - The recent acquisition of Hostess Brands enhances SJM's presence in the sweet baked snacks segment, supporting future growth [2] Stock Performance - SJM's stock has experienced a decline of 16.3% from its 52-week high of $121.48, reached on March 10 [3] - Over the past three months, SJM stock has marginally declined, underperforming the Dow Jones Industrials Average, which gained 5.5% during the same period [3] - In the longer term, SJM shares rose 6.2% over six months but fell 10.4% over the past 52 weeks, underperforming the Dow Jones Industrials Average's gains of 14.7% and 10.5% respectively [4] - The stock has been trading below its 200-day moving average for the past year and below its 50-day moving average since mid-September [4] Financial Results - On November 25, SJM reported its Q2 results, with an adjusted EPS of $2.10, which fell short of Wall Street expectations of $2.12 [5] - The company's revenue for the quarter was $2.33 billion, surpassing Wall Street forecasts of $2.32 billion [5] - SJM expects its full-year adjusted EPS to be in the range of $8.75 to $9.25 [5] Analyst Sentiment - Wall Street analysts maintain a reasonably bullish outlook on SJM, with a consensus "Moderate Buy" rating from 18 analysts [6] - The mean price target for SJM is $118.19, indicating a potential upside of 16.2% from current price levels [6]