J.M. Smucker Q1 net sales fall 1% as tariffs, rising commodity costs pressure earnings 

USA – J.M. Smucker, the maker of Folgers coffee and Jif peanut butter, reported a 1% decline in net sales to US$2.11 billion for the first quarter ended July 2025, as tariffs and rising input costs weighed on performance. 

The Orrville, Ohio-based company cited higher commodity expenses and inflation-driven challenges as key factors behind the dip, which came despite price increases across its portfolio.  

Packaged food companies such as J.M. Smucker and Conagra Brands have implemented price hikes in recent months to offset rising input costs, a trend exacerbated by tariff-led expenses that took effect earlier this year. 

Gross profit fell sharply by 40% to US$474.7 million during the quarter, impacted by high commodity costs, “unfavourable volume/mix,” and business disposals.  

Adjusted EBITDA was US$178.9 million, significantly lower than US$475.4 million a year earlier, while adjusted EBITDA margin contracted to 8.5% from 22.4%. The company closed the quarter with cash and equivalents of US$39.3 million, down from US$69.9 million as of April 30, 2025. 

“Our first-quarter results exceeded our expectations and reflect the continued momentum of the business. Our teams demonstrated agility throughout the organisation, and though the external environment continues to be dynamic we are successfully managing what we can control,” CEO and chair Mark Smucker said in a statement. 

The company’s U.S. retail coffee division, which includes Folgers, Dunkin’, and Café Bustelo, recorded a 22% drop in profit as higher commodity costs, unfavourable volume/mix, and increased marketing spend outweighed benefits from higher pricing. 

Smucker, which imports most of its green coffee from Brazil and Vietnam, had previously warned that heavy exposure to tariffs would pressure profitability.  

The company purchases around 500 million pounds of green coffee annually and now faces a 50% tariff on Brazilian imports, up from 10% in July. 

The sweet baked snacks division also continued to struggle. Net sales from the segment fell 24% to US$253.2 million, or 10% when excluding asset disposals to JTM Foods and Second Nature Brands. Volume/mix declined 8%.  

The business has faced mounting impairment charges, with US$980 million recorded this quarter, including US$867.3 million tied to goodwill in its sweet baked snacks unit and US$112.7 million linked to the Hostess brand.  

Smucker had already booked over US$1 billion in impairment charges in March for the same units, following its US$5.6 billion acquisition of Hostess Brands two years ago. 

Despite these challenges, J.M. Smucker raised its annual net sales growth forecast to between 3% and 5%, up from its earlier range of 2% to 4%.  

“Due to the better-than-expected first quarter results and sustained momentum for our portfolio of leading brands, we are raising our net sales expectations for the fiscal year,” Smucker added. 

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