SJM Filings — The J. M. Smucker Company - FilingSpy
SJM
The J. M. Smucker Company
A maker of packaged foods sold mainly in U.S. grocery aisles, with brands like Folgers coffee, Jif peanut butter, Uncrustables frozen sandwiches, Meow Mix cat food, Milk-Bone dog treats, and Hostess snack cakes. It began in 1897 when Jerome Monroe Smucker sold apple butter door-to-door from a horse-drawn wagon in Orrville, Ohio, hand-signing each crock to vouch for its quality. That promise later became its famous slogan, "With a name like Smucker's, it has to be good!"
Tariff refunds and derivative gains lift Smucker's Q1 gross margin to 44.1%, its highest in the series.
The profit story flipped this quarter. rose 5% to $2,219.3 million and reached 44.1%, up 21.7 points , as about $115 million in and favorable derivative gains landed in cost of goods sold. The question now is what the underlying business earns without those one-time benefits.
Key takeaways
more than doubled to $979.6 million, boosted by about $115 million in and favorable derivative gains, lifting to 44.1% from 22.5% a year ago.
rose 46% to $540.7 million, with expanding to 42.8% from 35.2%, as 4 points of net price realization and 1 point of volume/mix drove the 5% increase.
U.S. Retail Coffee led growth with a 13% sales increase and segment profit up 124%, while Sweet Baked Snacks sales fell 7%.
Section summaries
Management's Discussion and Analysis
Q1 FY2027 net sales rose 5% to $2.22B, with adjusted operating income up 46% on tariff refunds and pricing.
⌄
increased 5% to $2,219.3 million, driven by 4 points of and 1 point of .
more than doubled to $979.6 million, boosted by about $115 million in tariff refunds and favorable derivative gains.
swung to $425.7 million from a $10.6 million use a year ago, and reached $337.3 million.
Total debt declined to $6,737.8 million from $6,963.7 million, with short-term borrowings down $227.4 million.
What changed
The gap between and that opened in Q1 FY2026, when derivative losses compressed reported to 22.5%, reversed this quarter: GAAP gross margin of 44.1% now exceeds the adjusted figure of 42.8%.
U.S. Retail Coffee profit, which fell in every quarter of FY2026 despite double-digit sales growth, turned sharply positive this quarter with a 124% increase on a 13% sales gain.
Sweet Baked Snacks, which took $1.98 billion in impairments across FY2025 and FY2026 and saw profit fall 56% last year, continued to shrink with sales down 7% this quarter.
returned to positive territory at $337.3 million after the $94.9 million deficit in Q1 FY2026, supported by the swing in .
What to watch
Whether of 42.8% is sustainable once the $115 million in annualizes, or whether commodity costs and tariffs reassert pressure on the underlying business.
Whether U.S. Retail Coffee profit growth of 124% continues, given that pricing actions and green coffee cost trends have driven volatility in this segment for the past year.
Whether Sweet Baked Snacks sales, down 7% this quarter, stabilize or decline further after two consecutive years of impairments and divestitures.
Whether the $227.4 million reduction in short-term borrowings signals continued deleveraging, and whether of $6,394.3 million trends lower in subsequent quarters.
Adjusted rose 46% to $540.7 million, with adjusted expanding to 42.8% from 35.2%.
U.S. Retail Coffee led growth with a 13% sales increase and segment profit up 124%, while Sweet Baked Snacks sales fell 7%.
swung to $425.7 million from a $10.6 million use, and reached $337.3 million.
Total debt declined to $6,737.8 million from $6,963.7 million, with short-term borrowings down $227.4 million.
Quantitative and Qualitative Disclosures About Market Risk
Company faces interest rate, commodity, and foreign currency risks, with commodity derivatives the largest quantified exposure.
⌄
A hypothetical 100 basis-point decrease in interest rates at July 31, 2026 would increase the fair value of by $485.8 million.
Interest rate derivatives may be designated as cash flow or fair value hedges, with changes recognized in and generally offsetting the underlying debt.
Commodity derivatives, with maturities generally under one year, are not hedge-accounted, so gains and losses are immediately recognized in cost of products sold.
A hypothetical 10% commodity price change at July 31, 2026 could produce a fair value impact ranging from a $28.1 million gain to a $35.8 million loss, averaging $2.2 million.
Foreign currency exposure is primarily Canadian dollar-denominated, with hedged positions under one year and not hedge-accounted; a 10% exchange rate move would not materially impact fair value.
Revenues from customers outside the U.S. represented 3% of for the three months ended July 31, 2026.
Information required for Part II, Item 1 is incorporated by reference to the discussion in Note 12: Contingencies in Part I, Item 1 in this Quarterly Report on Form 10-Q.
⌄
Information required for Part II, Item 1 is incorporated by reference to the discussion in Note 12: Contingencies in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended April 30, 2026, should be carefully considered, together with the…
⌄
Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended April 30, 2026, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with the SEC, in connection with evaluating the Company, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may affect us. The occurrence of any of these known or unknown risks could have a material adverse impact on our business, financial condition, and results of operations.