The J.M. Smucker Co. (NYSE:SJM) stock rose Tuesday after the packaged food company reported fiscal fourth-quarter 2026 results that topped Wall Street estimates, driven by pricing gains and strength in its coffee business.

Earnings Beat Expectations

Adjusted earnings came in at $2.77 per share, ahead of analysts’ estimates of $2.64 per share. Net sales increased 6% year over year to $2.268 billion, slightly above the consensus estimate of $2.260 billion.

Comparable sales also rose 6%, helped by a 10-percentage-point benefit from pricing actions, primarily in coffee and sweet baked goods.

Adjusted gross profit increased 4%, while adjusted operating income climbed 14%. The company said pricing actions and a favorable product mix supported the gains.

Operating cash flow improved to $579.2 million from $393.9 million a year earlier. Free cash flow rose to $483.9 million from $298.9 million in the prior-year quarter.

The company ended the quarter with $58.6 million in cash and cash equivalents.

Coffee Business Leads Growth

U.S. Retail Coffee sales increased 12% to $830.6 million. Higher prices across the portfolio contributed 21 percentage points of growth.

Management highlighted continued strength in the Café Bustelo brand and said easing commodity pressures should support margin improvement in the coffee segment.

The U.S. Retail Frozen Handhelds and Spreads segment posted a 1% increase in sales to $454.1 million. Pricing actions added 2 percentage points of growth, supported by higher Uncrustables prices and lower promotional spending on Jif products.

The Uncrustables brand continued to gain momentum. The company expects its transition to a fridge-friendly format to be completed by mid-summer, which should help support mid-single-digit growth.

U.S. Retail Pet Foods sales rose 2% to $401.7 million, helped by higher pricing in cat food and dog snacks.

Away From Home sales climbed 15% to $228.3 million. Higher coffee prices contributed 8 percentage points of growth, while stronger demand for Uncrustables, fruit spreads, and coffee added 6 percentage points through volume and mix.

Sweet Baked Snacks remained a weak spot. Sales fell 5% to $237.2 million as volume and mix declined 12 percentage points, led by lower sales of snack cakes and breakfast products.

The company said it remains focused on improving the Hostess business through cost controls and operational improvements, with a goal of delivering roughly 30% profit growth.

Fiscal 2027 Outlook

J.M. Smucker expects fiscal 2027 adjusted earnings of $9.75 to $10.25 per share, compared with analysts’ estimates of $9.79 per share. The company forecast full-year sales of $8.689 billion to $8.779 billion, below the Wall Street consensus estimate of $9.107 billion.

Management expects net sales to decline 3% to 4% in fiscal 2027, citing lower pricing benefits and weaker volume and mix trends. The company also plans to reduce leverage to about three times EBITDA by fiscal 2027 through roughly $500 million in debt repayments. Management said future share repurchases could follow as leverage declines.

The company also cautioned that the inflation outlook could face pressure from geopolitical risks. Management said tensions in the Middle East remain a key variable for commodity and transportation costs, creating uncertainty around the company’s expense outlook for fiscal 2027, even as green coffee prices moderate.

SJM Price Action: J.M. Smucker shares were up 12.69% at $114.68 at the time of publication on Tuesday, according to Benzinga Pro data.

Photo via Shutterstock