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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 was positively driven by its Q3 earnings beat, with quarterly earnings of $2.38 per share, surpassing the Zacks Consensus Estimate of $2.27 per share. The company's sales growth was supported by pricing actions and strong coffee performance, particularly with its Café Bustelo and Uncrustables brands. However, Hostess weakness clouds the outlook. Institutional investors, such as Aquatic Capital Management LLC, have shown confidence in the company, purchasing a new stake. A "Buy" rating is supported by the company's value and income play, trading at a forward P/E of 11.6 and yielding 4.2%.

1.c. Company Highlights

2. J.M. Smucker's Q3 Earnings: A Mixed Bag

The J.M. Smucker Company reported its fiscal 2026 third-quarter earnings, with actual EPS coming in at $2.38, beating estimates of $2.27. Revenue growth was mixed across segments, with the Pet segment reporting 5% top-line growth driven by Meow Mix and Milk-Bone, while the Sweet Baked Snacks segment is expected to face a low double-digit decline in the fourth quarter due to category trends and a temporary disruption from a plant fire. The company's EPS guidance range remains, with a midpoint of $9. The Uncrustables business reported 10% revenue growth, with retail growth at 6%, driven by distribution gains in Away From Home and C-store.

Publication Date: Mar -02

📋 Highlights
  • Constructive Engagement with Elliott: Focused on profit restoration, portfolio optimization, and governance alignment, with no immediate guidance for fiscal 2027.
  • Coffee Segment Profit Margin: Expected to reach mid-20s in Q4FY26, benefiting from deflation and lapped tariffs.
  • Sweet Baked Snacks Margin Recovery: Anticipated return to 20% segment profit margin, though timeline unspecified, amid stabilization efforts.
  • Pet Segment Growth: Achieved 5% top-line growth, driven by Meow Mix and Milk-Bone innovation, leveraging humanization trends.
  • Uncrustables Expansion: Revenue up 10% with 6% retail growth, tripling C-store sales and adding 3.5M new households.

Segment Performance

The coffee segment is expected to see profit and margin improvement due to deflation benefits and lapping the impact of tariffs, with a mid-20s segment profit margin expected in the fourth quarter, as mentioned by Tucker Marshall. The Sweet Baked Snacks segment is expected to stabilize efforts to improve share of market performance and advance growth over time, with an improvement in profit expected in the fourth quarter. The company envisions a clear path to returning to a 20% segment profit margin, although no timeline is given.

Valuation and Outlook

With a P/E Ratio of -9.85, the company's valuation is a concern, although the Dividend Yield is attractive at 3.78%. The EV/EBITDA ratio is high at 103.79, indicating a potentially overvalued enterprise value. The company's ROE is negative at -21.55%, and ROIC is low at 2.11%, indicating potential areas for improvement. Analysts estimate next year's revenue growth at 1.5%. The company's guidance and performance will be crucial in determining its future valuation.

Operational Highlights

Innovation is performing well, with growth driven by closer-in innovation, and new products as a percent of sales are in line with expectations. The Uncrustables business has a strong distribution, and growth will be driven largely by innovation and household penetration, with 3.5 million new households recently added. SG&A is expected to be flat to slightly down, driven by efficiencies and prudent management of spend.

Future Prospects

The company expects to consider share repurchases again as it approaches a 3x leverage ratio or below by the end of next fiscal year. Historically, it has used proceeds from divestiture activity to either pay down debt or repurchase shares. The company's long-term sales growth target was lowered, and discrete items impacted this year's profitability. The normalized segment profit margin target for Sweet Baked Snacks will be reassessed, and a revised target may be provided in the future.

3. NewsRoom

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J. M. Smucker: This Dividend Aristocrat's Turnaround Is Brewing With Elliott's Backing (Upgrade)

Mar -19

Source: seekingalpha.com

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Brevan Howard Capital Management LP Has $3.38 Million Stock Position in The J. M. Smucker Company $SJM

Mar -17

Source: defenseworld.net

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86,964 Shares in The J. M. Smucker Company $SJM Acquired by Aquatic Capital Management LLC

Mar -16

Source: defenseworld.net

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Blair William & Co. IL Trims Holdings in The J. M. Smucker Company $SJM

Mar -12

Source: defenseworld.net

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Here Are Wednesday’s Top Wall Street Analyst Research Calls: CrowdStrike, Harley-Davidson, Intuitive Surgical, Medline, Nike, Oracle, Planet Fitness, Vici Properties, and More

Mar -11

Source: 247wallst.com

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Australian Oilseeds (NASDAQ:COOT) versus J. M. Smucker (NYSE:SJM) Head to Head Analysis

Mar -10

Source: defenseworld.net

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Contrasting Chefs’ Warehouse (NASDAQ:CHEF) & J. M. Smucker (NYSE:SJM)

Mar -05

Source: defenseworld.net

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SJM Surges 9%, But Hostess Weakness Clouds Outlook

Mar -03

Source: marketbeat.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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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

99.37$

Current Price

99.37$

Potential

-0.00%

Expected Cash-Flows