Smucker Raises Fiscal 2027 Outlook After Tariff Refunds
Adjusted earnings were $3.24 a share, including an $0.84 tariff-refund benefit, and the company lifted its full-year adjusted earnings range to $10.50–$11.00.
The J.M. Smucker Co. (SJM) raised its fiscal 2027 outlook after a first quarter in which tariff refunds and coffee pricing lifted profit, and volume/mix turned positive after two quarters of decline.
Net sales for the three months ended July 31, 2026, were $2.22 billion, up 5% from a year earlier, with a 4-point lift from net price realization, primarily coffee, and a 1-point lift from volume/mix, led by Uncrustables and coffee and offset by sweet baked goods and peanut butter. Sequential sales were $2.22 billion after $2.27 billion in the fiscal 2026 fourth quarter.
Adjusted earnings were $3.24 a share, up 71% from $1.90, including an $0.84 benefit from tariff refunds received in the quarter. GAAP operating income was $511.6 million, versus $45.6 million a year earlier. Adjusted operating income was $540.7 million, up 46%. Gross profit was $979.6 million, including about $115.0 million of tariff refunds; adjusted gross profit was $950.2 million. Gross margin expanded to 44.1% from 22.5%; operating margin expanded to 23.1% from 2.2%.
The sales increase reflected a 4-point lift from net price realization, primarily coffee, and a 1-point lift from volume/mix. That volume/mix contribution flipped positive after a 4-point decline in the April quarter and a 2-point decline in the January quarter. Net price realization had contributed 10 points in both the April and January quarters.
Chief Executive Officer Mark Smucker said first-quarter results exceeded the company’s expectations for both net sales and adjusted earnings per share, and that the company is increasing its net sales, adjusted earnings per share, and free cash flow outlook for the fiscal year.
U.S. Retail Coffee net sales were $807.8 million, up 13%, with a 10-point price lift and a 2-point volume/mix lift, primarily Dunkin’ and Café Bustelo. Segment profit was $300.0 million, and margin rose to 37.1% from 18.7%.
U.S. Retail Frozen Handheld and Spreads net sales were $499.3 million, up 3%, with a 2-point price lift and a 1-point volume/mix lift, primarily Uncrustables, offset by peanut butter and fruit spreads. Segment profit was $129.7 million, and margin rose to 26.0% from 23.6%.
U.S. Retail Pet Foods net sales were $371.7 million, up 1%, with volume/mix up 1 point, primarily cat food, and net price realization neutral. Segment profit was $98.9 million, and margin declined to 26.6% from 27.5%.
Sweet Baked Snacks net sales were $236.5 million, down 7%, with an 8-point volume/mix decline, primarily snack cakes and breakfast, and a 2-point price lift. Segment profit was $29.9 million, and margin declined to 12.6% from 13.5%.
Away From Home net sales were $203.7 million, up 3%, with a 2-point volume/mix lift, primarily Uncrustables and fruit spreads, and net price realization neutral. Segment profit was $61.2 million, and margin rose to 30.0% from 25.9%.
Cash provided by operating activities was $425.7 million, versus cash used of $10.6 million a year earlier. Free cash flow was $337.3 million, versus ($94.9) million. Net cash outflows related to debt were $230.8 million.
The company now expects fiscal 2027 net sales to decrease 1.0 to 2.0%, versus a prior guide of a 3.0 to 4.0% decrease. Adjusted earnings per share are now expected to range from $10.50 to $11.00, versus $9.75 to $10.25. Free cash flow is now expected to be about $1.1 billion, versus about $1.0 billion. Capital expenditures remain $325.0 million.
The updated guidance reflects an adjusted gross profit margin of about 38.75%, which now includes about $115.0 million of first-quarter tariff refunds, an increase in SD&A expenses of about 8.0% versus the prior year, interest expense of about $335.0 million, an adjusted effective income tax rate of 24.2%, and 107.1 million weighted-average common shares outstanding. The adjusted earnings range now includes a net benefit of about $0.60 related to tariff refunds, reflecting the $0.84 first-quarter benefit net of planned SD&A investments. The guidance does not assume impacts from new tariffs, changes to existing tariffs, or changes to the tariff refunds received in the first quarter.