The J. M. Smucker Company Q1 FY2026 earnings call

• Coffee segment: Current pricing outlook is mid-20s, including early winter tariffs, with volume impact in low to mid-teens. - EPS: Full-year guidance midpoint remains $9, first quarter is softest, second quarter has additional coffee costs but profit expectations for coffee are in line after absorbing tariffs. - Milk Bone: Expected to return to growth in the second half, supported by advertising, innovation, seasonals, and tactical price points/promo. - Sweet Baked Snacks: SKU rationalization ongoing with a $30M savings benefit, $10M in Q4 FY26 and $20M in FY27, profitability to improve sequentially. - Hostess portfolio: Stabilization efforts ongoing, with brands like Donette showing growth. - Free cash flow: Increased to $975M for FY26 due to one big beautiful bill act, to be used for debt pay down. - GLP-one drugs: No meaningful impact on categories yet, portfolio positioned to address potential issues.

No detailed absolute financial performance or revenue contribution % for product segments was explicitly stated in a structured manner during the call.

• Coffee: Pricing now mid-20s, volume impact low to mid-teens, net sales low to mid-teens. - Full-year: EPS guidance midpoint $9, profit shifted to later quarters due to coffee costs and tariffs. - Free cash flow: Increased to $975M, aiming for three times leverage by FY27. - Sweet Baked Snacks: SKU rationalization to have $30M savings, $10M in Q4 FY26, $20M in FY27.

• Tariffs on green coffee impacting pricing and profitability. - Consumer caution affecting pet product consumption. - Potential impact of GLP-one drugs on food categories, though not seen yet.

Q: Updated expectation on pricing benefit in coffee segment and if included in August price increase?

A: Pricing now mid-20s, includes early winter tariffs, volume low to mid-teens, segment growth low to mid-teens.

Q: Shift in EPS phasing?

A: Full-year guidance midpoint unchanged, offset by increased tariffs, first quarter coffee costs higher than anticipated, second quarter has additional costs.

Q: Coffee elasticity and top line impact?

A: Pricing actions, May pricing better, August at historical, winter higher elasticity, net $0.05 worse.

Q: Milk Bone growth in second half?

A: Strong comps, brand support with advertising, innovation, seasonals, promo.

Q: SKU rationalization impact on Sweet Baked Snacks volume?

A: No impact in Q1, benefit $30M, $10M in Q4 FY26, $20M in FY27.

Q: Guidance cadence and back half improvement?

A: Profit shifted to later quarters, midpoint guidance intact.

Q: SKU rationalization earnings impact?

A: $30M savings, Q4 FY26 $10M, FY27 $20M, profitability improves sequentially.

Q: Confidence in fiscal 2027 outlook?

A: Coffee margins in Q4, Hostess stabilization, growth brands, tariff navigation.

Q: Price vs volume mix and coffee pricing ramp?

A: Coffee mid-20s, Q1 18%, later quarters higher, sales ramp sequentially better.

Q: Free cash flow and deleveraging?

A: Increased to $975M, ongoing benefit, used for debt pay down.

Q: 2Q net sales outlook and segment improvement?

A: Coffee momentum, Uncrustables, pet growth, Sweet Baked Snacks stabilization.

Q: Tariff exemptions and impact?

A: Monitor, no current relief, timing impact on P&L.

Q: GLP-one drugs impact?

A: No meaningful impact, categories not affected, portfolio positioned.

Q: Hostess SKU reduction sales impact?

A: Focus on growth brands, Donette growth offsets.

Q: Tariff exemption relief and P&L impact?

A: Relief would revise 50¢ impact, timing factors.