Key facts
- J.M. Smucker forecasts fiscal 2027 adjusted earnings between $9.75 and $10.25 per share, exceeding analyst estimates.
- The company expects its adjusted gross margin to expand approximately 300 basis points to about 38% for the full year.
- Fourth-quarter net sales increased 6% to $2.27 billion, with adjusted profit of $2.77 per share beating estimates.
- J.M. Smucker anticipates a 3% to 4% decline in fiscal 2027 net sales, contrary to analyst expectations of nearly 1% growth.
- The company is shifting its strategy to prioritize volume growth and profitability over price increases.
Packaged food maker J.M. Smucker forecast annual profit above Wall Street expectations, banking on easing coffee costs and resilient demand for its Uncrustables sandwiches and Hostess donuts, sending shares up 12% in morning trading. The company has benefited from budget-conscious consumers choosing to eat out less and opting for more ready-to-eat staples and coffee at home, as well as strong demand in its pet category. It forecast fiscal 2027 adjusted earnings between $9.75 and $10.25 per share, the midpoint of which is higher than analysts' average estimate of $9.79 per share. Coffee prices are starting to ease after surging in recent years due to higher green coffee costs and tariffs, prompting the Folgers maker to cut prices and sacrifice revenue growth to rebuild margins. Green coffee deflation is expected to be a headwind to net sales, but a tailwind to margins, CEO Mark Smucker said. The company expects adjusted gross margin to expand roughly 300 basis points to about 38% for the full year, supported by lower commodity costs, reduced tariff pressure and cost-saving initiatives. The upbeat outlook came after better-than-expected fourth-quarter results, with adjusted profit of $2.77 per share beating estimates of $2.64, while net sales rose about 6% to $2.27 billion, slightly above expectations. Smucker flagged price-sensitivity among shoppers and a "dynamic and evolving" external environment, including geopolitical tensions, that would keep volumes in check. It expects fiscal 2027 net sales to fall 3% to 4%, compared with analysts' expectations for a nearly 1% growth. The company noted that roughly two-thirds of its portfolio is either gaining or maintaining dollar share, even as consumers shift toward private-label offerings and healthier products, trends partly driven by the rising use of GLP-1 weight-loss drugs.