Q1 2027 The J. M. Smucker Company Earnings Call (Pre-recorded) Transcript
Key Points
- JM Smucker Co (SJM) delivered a strong first quarter with net sales up 5%, including a 1% volume/mix contribution, and raised its full-year outlook for net sales, adjusted EPS, and free cash flow.
- Key growth platforms showed robust performance: Uncrustables achieved 12% net sales growth with record volume and household penetration, while Café Bustelo grew 23% and is now the sixth-largest at-home coffee brand.
- Adjusted gross margin expanded 760 basis points (240 basis points excluding tariff refunds), and adjusted EPS surged 71% year-over-year, reflecting strong underlying business momentum.
- The company achieved its leverage target of at or below 3.0x net debt to EBITDA ahead of schedule, paying down $230 million of debt in the quarter and maintaining investment-grade ratings.
- JM Smucker Co (SJM) increased its dividend for the 25th consecutive fiscal year and raised free cash flow guidance to approximately $1.1 billion, demonstrating disciplined capital deployment.
- Net sales are still expected to decline 1-2% for fiscal 2027, primarily due to anticipated green coffee deflation being passed through to consumers via lower prices.
- Sweet Baked Snacks segment net sales decreased 7%, impacted by prior-year SKU rationalization and continued challenges in the convenience channel, with segment profit down 13%.
- The company faces mid-single-digit inflation across its cost basket (excluding green coffee and tariffs), which is roughly 100 basis points higher than previously anticipated.
- SD&A expenses are projected to increase by approximately 8% due to higher administrative costs, increased marketing investments, and pre-production expenses for the McCalla facility expansion.
- Dog snacks net sales declined 2%, driven by a decrease in the Jerky Treats brand, and the company noted ongoing volatility in green coffee prices and a dynamic external environment.
Good morning. This is Crystal Beiting, Vice President, Investor Relations and Financial Planning and Analysis for The J. M. Smucker Company. Thank you for listening to our prepared remarks on our fiscal 2027 first quarter earnings call. After this brief introduction, Mark Smucker, Chief Executive Officer, President and Chair of the Board, will provide a business and strategy update. Tucker Marshall, Chief Financial Officer and Executive Vice President, Frozen Handheld and Spreads and Sweet Baked Snacks, will then provide a detailed analysis of the financial results and our updated fiscal 2027 outlook.
Later this morning, we will hold a separate, live question-and-answer webcast. During todayâs discussion, we will make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. Additionally, please note we will refer to nonGAAP
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