The J.M. Smucker Co. (NYSE:SJM) reported third-quarter fiscal 2026 results on Thursday, with shares trading higher following the release, as the company delivered solid operational performance despite ongoing cost pressures.
Adjusted earnings and revenue exceeded analyst expectations. Adjusted earnings per share $2.38, beating the $2.27 estimate. Net sales increased 7% to $2.339 billion from $2.186 billion a year earlier, topping the $2.322 billion estimate.
Net sales excluding divestitures and foreign currency exchange rose 8%.
Operating loss improved 8% to $548.4 million from $594.0 million a year ago. Adjusted operating income decreased 7% to $431.6 million, and adjusted operating margin fell to 18.4% from 21.2%.
Gross margin declined to 35.4% from 40.2%, reflecting higher costs, inclusive of commodity costs and tariffs, and unfavorable volume/mix.
“Our business continues to deliver strong results in a dynamic external environment. In the third quarter, net sales and adjusted earnings per share exceeded our expectations, reflecting the strength of our portfolio of leading brands, along with our disciplined cost management,” said Mark Smucker, Chief Executive Officer, President, and Chair of the Board.
Cash provided by operating activities rose to $558.5 million from $239.4 million in the prior year. Free cash flow increased to $487.0 million from $151.3 million.
The company ended the quarter with $52.8 million in cash and cash equivalents, $486.9 million in short-term borrowings, and $6.84 billion in long-term debt. During the quarter, it repaid $200 million of long-term debt and paid $116.7 million in dividends.
Segment Performance
U.S. Retail Coffee net sales rose 23% to $908.2 million, driven by higher net pricing. Segment profit margin declined to 21.9% from 28.2%, reflecting higher commodity costs and tariffs.
U.S. Retail Frozen Handheld and Spreads net sales increased 2% to $454.0 million, with segment profit margin improving to 22.8%.
U.S. Retail Pet Foods’ net sales declined 1% to $417.1 million, reflecting lapping contract manufacturing sales related to divested pet food brands. Margin expanded to 29.2%.
Sweet Baked Snacks’ net sales fell 19% to $224.8 million, and segment profit margin declined to 5.4%.
International and Away-From-Home net sales increased 12% to $335.3 million, with margin rising to 21.5%.
Outlook
For fiscal 2026, the company affirmed adjusted earnings per share guidance of $8.75 to $9.25, compared with the $8.99 estimate.
It narrowed its fiscal 2026 sales outlook to $9.031 billion to $9.075 billion from the prior range of $9.031 billion to $9.119 billion, compared with the $9.070 billion estimate.
The midpoint change in net sales guidance reflects the estimated impact of a recent fire at the company’s Emporia, Kansas, manufacturing facility in February.
The company continues to expect free cash flow of approximately $975.0 million, capital expenditures of $325.0 million, and an adjusted effective income tax rate of 24.0%.
Additionally, The J.M. Smucker announced that it appointed NRG CFO Bruce Chung and former Snyder’s-Lance CEO David Singer to its board following engagement with Elliott Investment Management.
SJM Price Action: JM Smucker shares were up 6.17% at $113.18 at the time of publication on Thursday, according to Benzinga Pro data.
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