J.M. Smucker reports strong Q3 earnings as U.S. retail coffee sales surge 23% 

USA – The J.M. Smucker Co. reported stronger-than-expected third-quarter earnings, supported by pricing actions in its coffee business and disciplined cost management amid a challenging operating environment. 

The packaged food and beverage company posted a 7% increase in net sales to US$153.4 million during the quarter. Excluding US$26.3 million of noncomparable net sales in the prior year related to divestitures and US$2.0 million of favorable foreign currency exchange, net sales increased by US$177.7 million, or 8%. 

Gross profit declined 7% to US$50.3 million, primarily reflecting higher costs, including commodity expenses and tariffs, as well as unfavorable volume and mix. These pressures were partially offset by higher net price realization. 

Operating loss decreased by US$45.6 million, or 8%, largely due to lapping a US$50.2 million net pre-tax loss on divestitures recorded in the prior year and a US$40.8 million reduction in impairment charges related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess® brand trademark.  

Performance was led by the U.S. Retail Coffee division, where net sales surged 23% to US$908.2 million, driven entirely by pricing actions. However, segment profit declined 5% due to higher commodity costs and tariff pressures. 

The Sweet Baked Snacks segment remained under pressure, with net sales falling 19% and segment profit dropping 78% compared with the prior-year period. 

Cash generation strengthened significantly during the quarter, with free cash flow rising to US$487.0 million from US$151.3 million in the prior-year period. 

Mark Smucker, Chief Executive Officer, President and Chair of the Board, said the company’s performance reflected portfolio strength and cost discipline. 

“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,” Smucker said. 

Following the results, the company updated its full-year fiscal 2026 outlook. Net sales are expected to increase between 3.5% and 4.0% versus the prior year, including a US$134.7 million impact related to the divestitures of the Voortman business and certain Sweet Baked Snacks value brands. Adjusted earnings per share are projected to range from US$8.75 to US$9.25. 

“We continue to advance our focused strategy centered around engaging and delighting consumers by participating in attractive categories, building brands consumers love, and being everywhere the consumer shops.”  

Looking ahead, we remain confident in our fiscal 2026 outlook and are focused on driving top-line growth, while enhancing profitability and earnings for the Company,” Smucker added. 

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