SJM
DefensiveJ.M. Smucker Company (The)
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Market Data
Financials
XBRL · SEC EDGAR2009–2025(17yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $3.8B | $4.6B | $4.8B | $5.5B | $5.9B | $5.6B | $5.7B | $7.8B | $7.4B | $7.4B | $7.8B | $7.8B | $8.0B | $8.0B | $8.5B | $8.2B | $8.7B | +6.7% |
| Gross Profit | $1.3B | $1.8B | $1.8B | $1.8B | $2.0B | $2.0B | $2.0B | $3.0B | $2.8B | $2.8B | $2.9B | $3.0B | $3.1B | $2.7B | $2.8B | $3.1B | $3.4B | +8.6% |
| Gross Margin | 33.3% | 38.8% | 37.3% | 33.4% | 34.4% | 36.2% | 34.6% | 38.0% | 38.4% | 38.5% | 37.2% | 38.5% | 39.2% | 33.8% | 32.8% | 38.1% | 38.8% | +0.7pp |
| Operating Income | $452.3M | $790.9M | $784.3M | $778.3M | $910.4M | $919.0M | $772.0M | $1.1B | $1.0B | $1.0B | $928.6M | $1.2B | $1.4B | $1.0B | $157.5M | $1.3B | -$673.9M | -151.6% |
| Operating Margin | 12.0% | 17.2% | 16.3% | 14.1% | 15.4% | 16.4% | 13.6% | 14.7% | 14.0% | 14.1% | 11.8% | 15.7% | 17.3% | 12.8% | 1.8% | 16.0% | -7.7% | -23.7pp |
| Net Income | $266.0M | $494.1M | $479.5M | $459.7M | $544.2M | $565.2M | $344.9M | $688.7M | $592.3M | $1.3B | $514.4M | $779.5M | $876.3M | $631.7M | -$91.3M | $744.0M | -$1.2B | -265.4% |
| Net Margin | 7.1% | 10.7% | 9.9% | 8.3% | 9.2% | 10.1% | 6.1% | 8.8% | 8.0% | 18.2% | 6.6% | 10.0% | 11.0% | 7.9% | -1.1% | 9.1% | -14.1% | -23.2pp |
| Free Cash Flow | $338.1M | $576.5M | $211.5M | $456.7M | — | — | — | — | — | $896.1M | $781.4M | $985.5M | $1.3B | $718.8M | $717.0M | $642.9M | $816.6M | +27.0% |
| FCF Margin | 9.0% | 12.5% | 4.4% | 8.3% | — | — | — | — | — | 12.2% | 10.0% | 12.6% | 15.7% | 9.0% | 8.4% | 7.9% | 9.4% | +1.5pp |
| EPS (Diluted) | $3.11 | $4.15 | $4.05 | $4.06 | $5.00 | $5.42 | $3.33 | $5.76 | $5.10 | $11.78 | $4.52 | $6.84 | $7.79 | $5.83 | $-0.86 | $7.13 | $-11.57 | -262.3% |
1. THE BIG PICTURE
J.M. Smucker Company (The) is a business in the midst of a painful structural transformation, trading short-term profitability for a bet on the "Sweet Baked Snacks" category. While J.M. Smucker Company (The) maintains dominant positions in coffee and spreads, its recent $1.98 billion impairment charge signals that the acquisition-led strategy to find growth outside the "center of the store" is currently struggling against market share losses and high integration costs.
2. WHERE THE RISKS HIT HARDEST
J.M. Smucker Company (The)'s Brand Equity is directly threatened by Goodwill and Intangible Asset Impairment because "trusted, iconic" status has not prevented the Sweet Baked Snacks unit from requiring a $1.98 billion pre-tax charge due to lost market share and lower forecasted sales (10-K Item 1A, 10-Q). Furthermore, Smucker’s Operational Resilience and its "integrated distribution network" are highly vulnerable to Customer Concentration risks; with Walmart accounting for 33 percent of net sales and 28 percent of trade receivables, any shift by that single retailer toward private label products would immediately destabilize Smucker’s revenue base (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
While Smucker’s reported a 7% increase in net sales to $2.34 billion in the most recent quarter, this growth is precarious. The 23% surge in U.S. Retail Coffee sales was entirely "driven by higher net pricing," while actual volume declined by 1% (8-K). This suggests J.M. Smucker Company (The) is leaning heavily on its ability to pass through commodity costs—specifically green coffee—to consumers who may eventually reach a breaking point.
The divergence between Smucker’s +6.7% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth and its -13.3% net margin reveals the high cost of its recent portfolio reshuffling (XBRL). While Smucker’s is outgrowing peers like Kraft Heinz (-3.5% growth), it is doing so while carrying $7.3 billion in net debt, resulting in a leverage ratio of 8.8x net debt to annual free cash flow (XBRL, CAPM analysis). Sentiment remains cautious, evidenced by a short interest of 6.5% of the float, as investors wait to see if J.M. Smucker Company (The) can convert its 9.2% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin into meaningful debt reduction (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At 10.8x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, the market is pricing in a long-term growth rate of approximately 0.5% (CAPM analysis). This represents a modest discount to the peer median of 14.8x, a valuation gap that is justified by Smucker's negative net margin and significant debt load.
For the current price to be considered attractively valued, Smucker’s would need to prove it can achieve GDP-pace growth of 2.5%, which would justify a multiple of 33.7x (CAPM analysis). However, current fundamentals challenge this: the Sweet Baked Snacks segment saw volume drop 10% in the most recent quarter (8-K). Investors are essentially paying a discounted multiple for a company that is currently a "show-me" story on debt management and snack integration.
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if volume/mix in the Sweet Baked Snacks segment stabilizes or turns positive, proving that the Hostess acquisition can grow organically rather than just through pricing.
- Cautious if Walmart’s share of net sales continues to climb above 33%, further reducing Smucker’s bargaining power during price negotiations.
- Cautious if free cash flow falls below the $975 million full-year guidance, which would jeopardize J.M. Smucker Company (The)'s ability to service its $7.7 billion total debt obligation (8-K, 10-K Item 1A).
6. BOTTOM LINE
Structural Advantage: A dominant market share in the U.S. Retail Coffee and Spreads categories, supported by an integrated distribution network that services 33% of sales through the world's largest retailer.
Bottom Line: Smucker’s is a high-leverage bet on brand turnaround that remains too risky until J.M. Smucker Company (The) proves it can grow snack volumes without further multi-billion dollar write-downs.
1. Top 5 Material Risks
- Goodwill and Intangible Asset Impairment: With $12.1 billion in goodwill and intangible assets on the balance sheet, J.M. Smucker Company (The) is highly sensitive to performance declines. The Sweet Baked Snacks reporting unit and Hostess brand trademark required $1.98 billion in pre-tax impairment charges in 2025 due to lost market share and lower forecasted sales.
- Customer Concentration: Walmart Inc. and its subsidiaries represent 33 percent of net sales and 28 percent of total trade receivables. The lack of long-term supply contracts means these customers can shift shelf space to private label products or competitors at any time.
- Debt Obligations: J.M. Smucker Company (The) carries $7.7 billion in short-term and long-term debt. This leverage limits the ability to fund capital expenditures or expansion and increases vulnerability to interest rate fluctuations and credit rating downgrades.
- Commodity Price Volatility: J.M. Smucker Company (The) is exposed to price fluctuations in green coffee, peanuts, oils, and packaging materials. In 2025, drought conditions in Brazil significantly reduced green coffee production, impacting profitability.
- Integration and Divestiture Execution: The acquisition of Hostess Brands and the divestiture of businesses like Voortman require significant management attention. Failure to realize anticipated synergies or effectively manage stranded overhead costs directly impacts operating results.
2. Company-Specific Risks
- Single-Source Supply Dependencies: J.M. Smucker Company (The) relies on Keurig for K-Cup® pods, JDE Peet’s for liquid coffee, and Graham Packaging for Folgers packaging. An interruption from any of these suppliers could disrupt core product lines.
- Manufacturing Concentration: Production for substantially all coffee, Milk-Bone dog snacks, and fruit spreads is consolidated into single manufacturing sites. A disruption at these specific locations, such as the New Orleans coffee facility, could eliminate the availability of these products.
- Proprietary Trade Secrets: Many coffee roasting and Uncrustables manufacturing methods are protected as trade secrets rather than patents. If these methods are independently discovered by competitors, J.M. Smucker Company (The) could lose its competitive advantage in product quality.
- EPM System Implementation: The multi-year transition to a new Oracle Cloud-based enterprise performance management system, expected to be fully integrated in early 2026, carries risks of design defects, cost overruns, and potential disruption to financial reporting.
3. Regulatory/Legal Risks
- Product Liability and Recalls: J.M. Smucker Company (The) is currently a defendant in consumer litigation related to a May 2022 voluntary recall of Jif peanut butter.
- Privacy Law Compliance: J.M. Smucker Company (The) must comply with comprehensive privacy laws in numerous U.S. states (e.g., California, Texas, Virginia), which impose civil penalties and potential private rights of action for data breaches.
- Tariff Exposure: New or increased U.S. tariffs on imports and exports, along with retaliatory measures, threaten to increase costs and disrupt international trade relations.
- Environmental Regulation: J.M. Smucker Company (The) faces increasing regulatory pressure regarding greenhouse gas emissions, energy policies, and sustainability, including extended producer responsibility regulations for packaging disposal.
4. Financial Impact Map
Goodwill and Intangible Asset Impairment → Goodwill and Other Intangible Assets (Balance Sheet) → $12.1 billion carrying value at April 30, 2025. Customer Concentration → Net Sales (Income Statement) → 33 percent of net sales derived from Walmart Inc. and subsidiaries in 2025. Debt Obligations → Interest Expense (Income Statement) → $7.7 billion in total debt requires ongoing cash flow for principal and interest payments. Commodity Price Volatility → Cost of Products Sold (Income Statement) → Volatility in green coffee and other input costs directly impacts gross profit. Integration and Divestiture Execution → Operating Results (Income Statement) → Costs associated with Hostess integration and divestiture of Sweet Baked Snacks value brands and Voortman business.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 8-K | Feb 2026 | — |
| 10-Q | Feb 2026 | Jan 2026 |
| 14A | Jun 2025 | — |
| 10-K | Jun 2025 | Apr 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
J. M. Smucker Q4 revenue $2.34B +7% YoY, beats estimates by 0.5%
- ▸SJM Q4 revenue $2.34B, +7% YoY, beat estimates by 0.5%
- ▸SJM beat analyst EBITDA and gross margin estimates
- ▸HSY Q4 revenue $3.09B, +7% YoY, beat estimates by 3.8%
- ▸CPB Q4 revenue $2.56B, -4.5% YoY, missed estimates by 1.6%
- ▸Shelf-stable food sector Q4 revenues beat consensus estimates by 0.7%
TD Cowen cuts J.M. Smucker price target to $103 from $113 on margin pressure
- ▸TD Cowen lowered SJM price target to $103 from $113
- ▸Analyst reiterated Hold rating citing margin pressure and limited pricing power
- ▸Input costs cited as rising due to Iran War geopolitical tensions
- ▸Bernstein previously upgraded SJM to Outperform with $145 target on March 11
- ▸Activist investor Elliott Management involvement noted as potential catalyst for portfolio changes
TD Cowen cuts Smucker price target to $113 from $124, maintains Hold rating
- ▸TD Cowen lowered SJM price target to $113 from $124
- ▸FY26 and FY27 EPS estimates reduced in line with consensus
- ▸Sweet Baked Snacks segment growth rate projected at 2%
- ▸Manufacturing plant fire causing temporary operational disruption
- ▸Coffee business remains primary offset to Sweet Baked Snacks weakness
SJM Q3 Net Sales +7% to $2.3B, Adjusted EPS -9% to $2.38
- ▸Net sales +7% to $2.3B; comparable sales +8% excluding divestitures
- ▸Adjusted EPS -9% to $2.38; net loss per share $6.79 due to impairment
- ▸Free cash flow rose to $487.0M from $151.3M in previous quarter
- ▸FY26 adjusted EPS guidance set at $8.75–$9.25
- ▸FY26 net sales growth forecast revised to 3.5%–4.0%
J. M. Smucker Q3 2026 beats estimates, Barclays raises price target to $125
- ▸Q3 2026 earnings and revenue beat analyst estimates
- ▸Operating cash flow $558.5M vs $239.4M prior year
- ▸Free cash flow +222% YoY to $487M
- ▸FY26 net sales growth guidance narrowed to 3.5%–4.0%
- ▸FY26 adjusted EPS guidance maintained at $8.75–$9.25