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1. Company Snapshot

1.a. Company Description

The J.M.Smucker Company manufactures and markets branded food and beverage products worldwide.


It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods.The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, shortening and oils, and frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients.It provides its products under the Meow Mix, 9Lives, Kibbles ‘n Bits, Milk-Bone, Pup-Peroni, Rachael Ray Nutrish and Nature's Recipe, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses.


The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers.Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.

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1.b. Last Insights on SJM

The J.M. Smucker Company's recent performance has been driven by several positive factors. CLSA upgraded SJM Holdings to Hold from Reduce, citing potentially stabilizing business conditions. The company also raised its dividend for the 24th consecutive year, backed by strong cash flow and a focused debt-reduction strategy, making it an attractive pick for income-focused investors. Additionally, a steady share buyback program has been implemented, reducing the number of outstanding shares and increasing relative value for shareholders.

1.c. Company Highlights

2. J.M. Smucker's Q2 Earnings: A Mixed Bag with Promising Outlook

The J.M. Smucker Company reported a fiscal 2026 second-quarter EPS of $2.26, beating analyst estimates of $2.12. The company's financial performance was marked by organic sales growth in its Sweet Baked Snacks segment, driven by improved performance in c-store and a more focused portfolio. However, the segment's profit fell short of expectations due to transition costs in the bakery network. The company's coffee segment demonstrated an 18.2% second-quarter segment profit margin. Revenue growth was not explicitly stated, but the company's expectations for various segments were discussed.

Publication Date: Nov -26

📋 Highlights
  • Sweet Baked Snacks Organic Sales Growth:: Exceeded expectations driven by c-store performance and portfolio focus, though profit fell short due to $XXM+ transition costs in bakery network.
  • SuzyQs Relaunch Momentum:: Sequential improvement noted, with CEO projecting acceleration in coming quarters through brand elevation and execution investments.
  • Green Coffee Tariff Impact:: $0.50/tailwind primarily from 2027, with $75M+ cost absorption in Q3 US retail coffee, impacting third-quarter results.
  • Uncrustables Growth Trajectory:: 7% Q2 growth, forecasted low double-digit Q3-Q4 growth, on track to become a $1B+ brand by fiscal year-end.
  • Free Cash Flow & Debt Strategy:: $975M+ FCF expected in 2026, supporting $500M+ debt paydown, with leverage target of 3x by 2027.

Segment Performance

The company's Pet segment is expected to drive low single-digit growth in the third and fourth quarters, driven by momentum in Milk Bone and Meow Mix. In contrast, the Frozen Handheld and Spreads segment is expected to experience weakness, primarily due to peanut butter, but Uncrustables is anticipated to achieve double-digit growth and become a billion-dollar brand by the end of the fiscal year. The coffee portfolio is expected to see 16% year-over-year growth, with 22% pricing offset by 6% down volume mix.

Tariff Impact and Guidance

CFO Tucker Marshall discussed the $0.50 tariff impact, stating that it is primarily related to green coffee tariffs and will be a tailwind in fiscal 2027. The company decided not to take pricing in US retail coffee, absorbing $75 million in tariff-related costs, which will impact the third quarter. The company reduced its SG&A guidance to flat year over year, with marketing spend expected to be around 5.5% of net sales.

Valuation and Growth Prospects

With a P/E Ratio of -8.96 and a P/S Ratio of 1.22, the company's valuation metrics indicate a potentially undervalued stock. Analysts estimate next year's revenue growth at 3.5%. The company's EPS growth expectations for 2027 are not yet quantified, but a path to growth could emerge with a stabilizing commodity environment, tariff relief, and continued business momentum. The company's ability to generate $975 million of free cash flow this fiscal year and reduce leverage to three times by 2027 is a positive indicator.

Future Outlook

The company's portfolio offers a broad range of value options for consumers, and they will continue to deliver varying degrees of value across categories. The company does not see a need to reduce prices to offer value, but will pass along cost savings to consumers if commodity costs moderate. With a dividend yield of 4.34% and a free cash flow yield of 5.93%, the stock presents an attractive income opportunity.

3. NewsRoom

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Groupe la Francaise Increases Stake in The J. M. Smucker Company $SJM

Dec -04

Source: defenseworld.net

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The J. M. Smucker Company $SJM Shares Sold by Ameritas Investment Partners Inc.

Dec -03

Source: defenseworld.net

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2 Steadier Dividend Stocks If You're Looking to Side-Step a Stock Market Correction

Dec -01

Source: 247wallst.com

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The J. M. Smucker Company $SJM Shares Purchased by Cetera Investment Advisers

Nov -28

Source: defenseworld.net

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The J. M. Smucker Company $SJM Shares Sold by Boston Partners

Nov -28

Source: defenseworld.net

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JM Smucker Co (SJM) Q2 2026 Earnings Call Highlights: Sweet Baked Snacks Shine Amidst Tariff Challenges

Nov -25

Source: gurufocus.com

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J. M. Smucker: Coffee Relief Is Coming (Rating Upgrade)

Nov -25

Source: seekingalpha.com

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J.M. Smucker forecasts annual profit below estimates as coffee inflation bites

Nov -25

Source: reuters.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.09%)

6. Segments

United States Retail Pet Foods

Expected Growth: 2.5%

The 2.5% growth of United States Retail Pet Foods from The J. M. Smucker Company is driven by increasing pet humanization, premiumization, and e-commerce adoption. Additionally, the company's strong brand portfolio, including Meow Mix and 9Lives, and its focus on natural and organic products, contribute to its growth in the market.

United States Retail Coffee

Expected Growth: 1.8%

The 1.8% growth of United States Retail Coffee from The J. M. Smucker Company is driven by increasing demand for specialty coffee, premiumization, and convenience. Additionally, the company's strong brand portfolio, including Folgers and Dunkin', and its ability to adapt to changing consumer preferences, such as the rise of single-serve coffee, contribute to its growth.

United States Retail Consumer Foods

Expected Growth: 2.2%

The 2.2% growth in United States Retail Consumer Foods from The J. M. Smucker Company is driven by increasing demand for pet food and snacks, particularly in the e-commerce channel. Additionally, the company's focus on innovation, marketing, and pricing strategies has contributed to the growth. Furthermore, the acquisition of Ainsworth Pet Nutrition has expanded the company's pet food portfolio, supporting the segment's growth.

International and Away From Home

Expected Growth: 1.5%

The 1.5% growth in International and Away From Home segment of The J. M. Smucker Company is driven by increasing demand for pet food and snacks in emerging markets, strategic partnerships, and expansion of e-commerce channels. Additionally, the company's focus on premium and convenience products, as well as its efforts to improve operational efficiency, contribute to the growth.

7. Detailed Products

Folgers Coffee

A leading coffee brand offering a range of coffee products, including whole beans, ground coffee, and single-serve cups.

Pillsbury Baking Products

A wide range of baking products, including flour, sugar, and baking mixes, designed to make baking easy and convenient.

Jif Peanut Butter

A popular peanut butter brand offering creamy and crunchy spreads, perfect for sandwiches, snacks, and recipes.

Meow Mix Cat Food

A variety of cat food products, including dry food, wet food, and treats, designed to meet the nutritional needs of felines.

Milk-Bone Dog Treats

A range of dog treats, including biscuits, chews, and snacks, designed to reward and nourish your furry friend.

9Lives Cat Food

A line of cat food products, including dry food, wet food, and treats, designed to meet the nutritional needs of felines.

Kibbles 'n Bits Dog Food

A range of dog food products, including dry food and wet food, designed to meet the nutritional needs of canines.

Natural Balance Pet Food

A premium pet food brand offering a range of natural and holistic products for dogs and cats.

8. The J. M. Smucker Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The J. M. Smucker Company is moderate due to the presence of alternative products in the market, such as private label brands and other food and beverage companies.

Bargaining Power Of Customers

The bargaining power of customers for The J. M. Smucker Company is low due to the company's strong brand portfolio and wide distribution network, which makes it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The J. M. Smucker Company is moderate due to the company's dependence on a few large suppliers for raw materials, but the company's scale and diversification efforts mitigate this risk.

Threat Of New Entrants

The threat of new entrants for The J. M. Smucker Company is low due to the high barriers to entry in the food and beverage industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for The J. M. Smucker Company is high due to the competitive nature of the food and beverage industry, with many established players and frequent product innovations.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 37.35%
Debt Cost 3.95%
Equity Weight 62.65%
Equity Cost 5.09%
WACC 4.66%
Leverage 59.63%

11. Quality Control: The J. M. Smucker Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 4.2/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

100.11$

Current Price

100.11$

Potential

-0.00%

Expected Cash-Flows