Fiscal Year 2027 First Quarter
Filed Aug 26, 2026The J.M. Smucker Co. Announces Fiscal Year 2027 First Quarter Results and Updates Full-Year Fiscal 2027 Outlook
Net sales increased 5%, adjusted EPS increased 71% to $3.24, operating cash flow improved to $425.7 million, and the Company raised full-year net sales, adjusted EPS, and free-cash-flow outlook. Results included approximately $115.0 million of tariff refunds and a $0.84 adjusted-EPS benefit from those refunds.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Fiscal 2027 net sales decrease versus prior year | (4.0)% to (3.0)% | First-quarter net sales of $2,219.3 million, an increase of 5 % | n/a |
| Fiscal 2027 adjusted earnings per share | $9.75 - $10.25 | First-quarter adjusted earnings per share of $3.24 | n/a |
| Fiscal 2027 free cash flow | $1.0 billion | First-quarter free cash flow of $337.3 million | n/a |
| Fiscal 2027 capital expenditures | $325.0 million | First-quarter additions to property, plant, and equipment of $88.4 million | n/a |
| Fiscal 2027 adjusted effective income tax rate | 24.3 % | First-quarter adjusted effective income tax rate of 24.2 percent | n/a |
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $2,219.3 million | – | 5 % |
| Net sales excluding foreign currency exchangenon-GAAP | $2,220.6 million | – | 5 % |
| Gross profitGAAP | $979.6 million | – | 106 % |
| Gross marginGAAP | 44.1 % | – | – |
| Adjusted gross profitnon-GAAP | $950.2 million | – | 28 % |
| Adjusted gross profit marginnon-GAAP | 42.8 % | – | – |
| Selling, distribution, and administrative expensesGAAP | $410.5 million | – | 9 % |
| Marketing expenseGAAP | $122.7 million | – | – |
| Selling expenseGAAP | $76.1 million | – | – |
| Distribution expenseGAAP | $72.4 million | – | – |
| General and administrative expenseGAAP | $139.3 million | – | – |
| Operating incomeGAAP | $511.6 million | – | n/m |
| Operating marginGAAP | 23.1 % | – | – |
| Adjusted operating incomenon-GAAP | $540.7 million | – | 46 % |
| Adjusted operating marginnon-GAAP | 24.4 % | – | – |
| Interest expense, netGAAP | $(82.3) million | – | (18) % |
| Income before income taxesGAAP | $427.9 million | – | n/m |
| Effective income tax rateGAAP | 24.2 percent | – | – |
| Adjusted effective income tax ratenon-GAAP | 24.2 percent | – | – |
| Net incomeGAAP | $324.3 million | – | n/m |
| Adjusted incomenon-GAAP | $346.5 million | – | – |
| Net income per common shareGAAP | $3.04 | – | n/m |
| Net income per common share, assuming dilutionGAAP | $3.03 | – | n/m |
| Adjusted earnings per share, assuming dilutionnon-GAAP | $3.24 | – | 71 % |
| EBITDA (as adjusted)non-GAAP | $637.7 million | – | – |
| EBITDA (as adjusted) marginnon-GAAP | 28.7 % | – | – |
| Cash provided by operating activitiesGAAP | $425.7 million | – | – |
| Free cash flownon-GAAP | $337.3 million | – | – |
| Capital expendituresother | $88.4 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. Retail CoffeeNet price realization increased net sales by 10 percentage points, reflecting higher net pricing across the portfolio. Volume/mix increased net sales by 2 percentage points, primarily reflecting increases for the Dunkin’ ® and Café Bustelo ® brands. | $807.8 million | – | 13% |
| U.S. Retail Frozen Handheld and SpreadsNet price realization increased net sales by 2 percentage points. Volume/mix increased net sales by 1 percentage point, primarily reflecting an increase for Uncrustables ® sandwiches, partially offset by decreases for peanut butter and fruit spreads. | $499.3 million | – | 3% |
| U.S. Retail Pet FoodsVolume/mix increased net sales by 1 percentage point, primarily driven by an increase for cat food. Net price realization was neutral, as higher net pricing for cat food was mostly offset by higher trade spend for dog snacks. | $371.7 million | – | 1% |
| Sweet Baked SnacksVolume/mix decreased net sales by 8 percentage points, primarily reflecting decreases for snack cakes and breakfast. Net price realization increased net sales by 2 percentage points, primarily reflecting higher net pricing for snack cakes and donuts. | $236.5 million | – | (7)% |
| Away From HomeVolume/mix increased net sales by 2 percentage points, primarily driven by increases for Uncrustables ® sandwiches and fruit spreads, partially offset by a decrease for coffee. Net price realization was neutral. | $203.7 million | – | 3% |
| Other (International operating segment)Prior-year net sales were $91.9 million. No segment revenue driver was provided. | $100.3 million | – | – |
Fiscal year ending April 30, 2027 outlook
- RevenueNet sales decrease vs. prior year of (2.0)% to (1.0)%
- Gross marginAdjusted gross profit margin of approximately 38.75 percent
- Operating expensesSD&A expenses expected to increase approximately 8.0 percent versus the prior year
- Tax rateAdjusted effective income tax rate of 24.2 %
- NoteAdjusted earnings per share of $10.50 - $11.00
- NoteFree cash flow of $1.1 billion
- NoteCapital expenditures of $325.0 million
- NoteInterest expense of approximately $335.0 million
- Note107.1 million weighted-average common shares outstanding
- NoteNet income per common share, assuming dilution, of $8.70 - $9.20
- NoteNet cash provided by operating activities of $1,425.0 million
- NoteAdjusted earnings per share range includes a net benefit of approximately $0.60 related to tariff refunds.
Capital returns
- Dividends declared per common share were $1.12, compared to $1.10 in the prior year.
- Quarterly dividends paid were $116.8 million, compared to $114.4 million in the prior year.
- Purchase of treasury shares was $5.7 million, compared to $4.6 million in the prior year.
- Net cash outflows related to debt were $230.8 million.
What drove it
- Consolidated net sales growth reflected a 4 percentage point increase from net price realization, primarily higher net pricing for coffee, and a 1 percentage point increase from volume/mix.
- Consolidated volume/mix growth was driven primarily by Uncrustables ® sandwiches and coffee, partly offset by declines in sweet baked goods and peanut butter.
- Gross profit included approximately $115.0 million of tariff refunds received during the quarter.
- Gross-profit growth also reflected lower costs, including a net favorable impact of derivative gains and losses, higher net price realization, and favorable volume/mix.
- U.S. Retail Coffee sales increased 13%, and segment profit increased $165.8 million, primarily reflecting tariff refunds and higher net price realization.
- U.S. Retail Frozen Handheld and Spreads benefited from higher pricing, Uncrustables ® volume/mix, lower marketing spend, and favorable volume/mix.
- Net interest expense decreased $17.9 million, primarily due to reduced debt outstanding versus the prior year, and included $4.0 million of interest income associated with tariff refunds.
Concerns
- Sweet Baked Snacks net sales decreased 7%, with volume/mix down 8 percentage points due primarily to declines in snack cakes and breakfast.
- Sweet Baked Snacks segment profit decreased $4.3 million, reflecting higher costs and unfavorable volume/mix.
- U.S. Retail Pet Foods segment profit decreased $2.4 million, primarily due to higher costs and marketing spend.
- The fiscal 2027 outlook expects net sales to decrease 1.0 to 2.0 percent versus the prior year, primarily reflecting lower net price realization and neutral volume/mix.
- The Company stated that the outlook does not assume impacts from new tariffs, changes to existing tariffs, or changes to the tariff refunds received in the first quarter.
- The adjusted EPS range includes a net benefit of approximately $0.60 related to tariff refunds, including the $0.84 first-quarter benefit net of planned SD&A investments.
What to watch
- Coffee net pricing and volume/mix, including Dunkin’ ® and Café Bustelo ® performance.
- Uncrustables ® volume/mix across U.S. Retail Frozen Handheld and Spreads and Away From Home.
- Recovery in Sweet Baked Snacks volume/mix for snack cakes and breakfast.
- Pet-food costs, marketing spending, cat-food pricing, and dog-snack trade spending.
- Delivery of approximately 38.75 percent adjusted gross profit margin and approximately 8.0 percent SD&A expense growth in fiscal 2027.
- The extent to which tariff refunds and planned SD&A investments affect the full-year adjusted EPS outcome.
- Free-cash-flow delivery of $1.1 billion and capital expenditures of $325.0 million.
Balance sheet and cash flow
- Cash and cash equivalents were $43.2 million at July 31, 2026, compared to $58.6 million at April 30, 2026.
- Current portion of long-term debt was $150.0 million at July 31, 2026.
- Short-term borrowings were $193.5 million at July 31, 2026, compared to $420.9 million at April 30, 2026.
- Long-term debt, less current portion, was $6,394.3 million at July 31, 2026, compared to $6,392.8 million at April 30, 2026.
- Inventories were $1,186.5 million at July 31, 2026, compared to $1,126.5 million at April 30, 2026.
- Trade receivables, net, were $615.7 million at July 31, 2026, compared to $656.3 million at April 30, 2026.
- Net cash provided by operating activities was $425.7 million, compared to net cash used for operating activities of $10.6 million in the prior year.
- Net cash used for investing activities was $85.8 million, compared to $197.9 million in the prior year.
- Net cash used for financing activities was $354.0 million, compared to net cash provided by financing activities of $178.0 million in the prior year.
Analysis
The first quarter showed broad improvement in reported sales, profit, and cash generation. Net sales increased 5% to $2,219.3 million, with a 4 percentage point contribution from net price realization and a 1 percentage point contribution from volume/mix. Higher coffee pricing was the primary pricing driver, while Uncrustables ® sandwiches and coffee supported volume/mix. Adjusted EPS increased 71% to $3.24, while GAAP diluted EPS was $3.03 compared with a prior-year diluted loss per share of $(0.41).
Profitability improved sharply. Gross profit increased 106% to $979.6 million and gross margin was 44.1%, while adjusted gross profit increased 28% to $950.2 million and adjusted gross profit margin was 42.8%. The quarter included approximately $115.0 million of tariff refunds, and adjusted EPS included a $0.84 tariff-refund benefit. Operating income reached $511.6 million and adjusted operating income was $540.7 million, up 46%, aided by lower costs, net price realization, favorable volume/mix, and tariff refunds. SD&A expenses increased 9% to $410.5 million, with general and administrative expense increasing to $139.3 million from $119.4 million.
Segment performance was uneven but led by coffee. U.S. Retail Coffee net sales rose 13% to $807.8 million and segment profit increased to $300.0 million from $134.2 million, with tariff refunds and pricing central to the profit expansion. Frozen Handheld and Spreads grew 3%, supported by Uncrustables ®, and Away From Home grew 3% with favorable volume/mix. Pet Foods sales grew 1% but segment profit declined 2% on higher costs and marketing spend. Sweet Baked Snacks remained the principal weak point, as sales declined 7% and segment profit declined 13%, driven by lower snack-cake and breakfast volume/mix and higher costs.
Cash generation reversed materially from the prior year. Operating cash flow was $425.7 million compared with cash used for operating activities of $10.6 million, and free cash flow was $337.3 million compared with $(94.9) million. The Company reported $230.8 million of net cash outflows related to debt, while short-term borrowings declined to $193.5 million from $420.9 million at April 30, 2026. It paid $116.8 million in quarterly dividends and repurchased $5.7 million of treasury shares.
Management raised fiscal 2027 guidance. It now expects net sales to decline 1.0 to 2.0 percent versus the prior year, adjusted EPS of $10.50 to $11.00, and free cash flow of $1.1 billion, compared with previous outlook of a 3.0 to 4.0 percent sales decline, adjusted EPS of $9.75 to $10.25, and $1.0 billion of free cash flow. The revised earnings outlook assumes approximately 38.75 percent adjusted gross profit margin, approximately 8.0 percent SD&A growth, approximately $335.0 million of interest expense, and a 24.2 percent adjusted effective tax rate. The guide includes approximately $115.0 million of first-quarter tariff refunds and a net adjusted-EPS benefit of approximately $0.60 from tariff refunds after planned SD&A investments, while excluding potential effects from new tariffs, changes to existing tariffs, or changes to first-quarter tariff refunds.
Management, verbatim
Our first quarter results exceeded our expectations for both net sales and adjusted earnings per share, demonstrating continued momentum across the Company.
Mark Smucker, Chief Executive Officer, President and Chair of the Board
Based on our strong first quarter performance and expectations for the remainder of the year, we are increasing our net sales, adjusted earnings per share, and free cash flow outlook for the fiscal year.
Mark Smucker, Chief Executive Officer, President and Chair of the Board
Not in the filing
stated, not guessed- Prior-quarter financial results and sequential comparisons were not provided.
- A GAAP full-year fiscal 2027 revenue dollar outlook was not provided.
- A GAAP full-year fiscal 2027 operating-income outlook was not provided.
- A GAAP full-year fiscal 2027 operating-margin outlook was not provided.
- Full-year fiscal 2027 segment revenue and segment-profit guidance was not provided.
- A specific debt-repayment target or ending-debt outlook was not provided.
- A share-repurchase authorization, remaining authorization, or full-year repurchase outlook was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.