The J.M. Smucker Co. (NYSE:SJM) reported stronger-than-expected third-quarter earnings, helping lift its shares despite a slight reduction to full-year sales guidance following a recent manufacturing facility fire.
The packaged food and beverage company posted adjusted earnings per share of $2.38 for the quarter ended January 31, surpassing analyst forecasts of $2.26. Revenue totaled $2.3 billion, modestly below expectations of $2.33 billion but up 7% from $2.19 billion a year earlier.
Excluding the effects of divestitures and currency movements, net sales rose 8%, supported by a 10-percentage-point contribution from higher pricing — largely in coffee — which more than offset a 2-percentage-point decline related to volume and product mix.
Shares advanced 7.9% following the earnings release as investors focused on profitability and cash-flow improvement.
“Our business continues to deliver strong results in a dynamic external environment. In the third quarter, net sales and adjusted earnings per share exceeded our expectations, reflecting the strength of our portfolio of leading brands, along with our disciplined cost management,” said Mark Smucker, Chief Executive Officer, President and Chair of the Board.
The company slightly tightened its full-year net sales growth forecast to a range of 3.5% to 4.0%, compared with its previous outlook of 3.5% to 4.5%. The revised midpoint of 3.75% reflects operational disruption caused by a February fire at its Emporia, Kansas manufacturing facility.
Despite the adjustment, Smucker maintained its adjusted earnings per share guidance of $8.75 to $9.25, implying a midpoint of $9.00.
Performance was led by the U.S. Retail Coffee division, where net sales surged 23% to $908.2 million, driven entirely by pricing actions. However, segment profit declined 5% due to higher commodity costs and tariff pressures.
The Sweet Baked Snacks segment remained a weak spot, with net sales falling 19% and segment profit dropping 78%.
Cash generation improved markedly during the quarter, with free cash flow rising to $487.0 million compared with $151.3 million in the prior-year period.