J.M. Smucker's Coffee Sales Rise: Is Pricing Still the Key Driver?

The J. M. Smucker Company’s SJM U.S. Retail Coffee segment posted solid sales in the second quarter of fiscal 2026, with pricing being the main driver of growth. Segment net sales increased about 21% year over year to $848.9 million, supported by higher net price realization across brands such as Folgers, Dunkin and Cafe Bustelo.

Management stated that comparable net sales growth in the quarter was mainly price-led. Pricing contributed 11 percentage points to comparable sales growth, highlighting the continued ability of the coffee portfolio to absorb higher prices despite a cautious consumer backdrop. Strong brand positioning and category relevance have allowed this Zacks Rank #3 (Hold) company to rely on pricing actions to offset cost pressures and sustain revenue momentum.

However, volume and mix trends remained a challenge. The coffee business experienced volume declines during the quarter as consumers adjusted to prior price increases and sought value-oriented options. Management acknowledged these elasticity pressures but also pointed to improvement versus earlier expectations. Based on recent trends, SJM revised its full-year elasticity view for U.S. Retail Coffee and now expects an adverse net impact of 40 cents in fiscal 2026, an improvement from its previous assumption.

Apart from this, The J.M. Smucker expects an unfavorable impact of 50 cents from the previously incurred green coffee tariff costs in fiscal 2026, which it does not plan to fully pass on to consumers. These costs are expected to roll off in the next fiscal year, assuming trade policies remain unchanged.

Overall, the second quarter reinforces that pricing continues to do much of the heavy lifting in The J.M. Smucker’s coffee business. Higher net price realization helped offset softer volumes and supported segment growth, even as elasticity remains a factor. Improving elasticity trends and clearer cost visibility suggest that some pressure on volumes could gradually ease, though pricing discipline remains a key driver of near-term performance.

Shares of SJM have dipped 6% in the past six months compared with the industry’s decline of 13.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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