J.M. Smucker Co. shares cracked under pressure after the company revealed a disappointing first-quarter performance, showing consumers pulling back from coffee, pet snacks, sweet baked goods, and fruit spreads.
Butter-up investors were left with a less appetizing taste as net sales cooled off.
The company posted adjusted earnings per share of $1.90, trailing analyst projections of $1.93, which is a 22 percent drop compared to the prior year. Net sales slipped approximately 1 percent to $2.11 billion, slightly under the forecast.
Shares of Smucker tumbled more than 5 percent, reflecting investor unease with the earnings miss and weak consumer demand in key product areas.
The packaged-food giant saw a mixed picture across its segments. Coffee net sales rose 15 percent, buoyed by substantial price increases due to President Donald Trump’s tariffs, particularly for its Café Bustelo brand, as consumers remained relatively resilient, with volume down only 2 percent. Still, profit margins were squeezed by rising commodity costs and higher marketing spend.
Meanwhile, other core domestic segments, spreads and handhelds like Uncrustables, pet foods, and sweet baked snacks, reported declining net sales.
Sweet baked snacks were especially hard-hit, plummeting 24 percent, or 10 percent on a comparable basis excluding divested brands, as consumers trimmed discretionary purchases despite temporary price cuts. The underperformance in snacks raises further questions about Smucker’s $5.6 billion acquisition of Hostess Brands in 2023, as the anticipated scales in that category appear elusive.
Still, management offered a measure of optimism, raising its full-year net sales growth guidance to a range of three percent to five percent, compared to a previous forecast of two percent to four percent. The company reaffirmed its fiscal 2026 adjusted EPS outlook of $8.50 to $9.50.
Broad economic headwinds, including inflation, tariff-related input costs (particularly for green coffee imports), and changing consumer behavior, continue to pressure the business. Smucker has implemented multiple coffee price increases throughout the year to partially offset these challenges.
