Snapshot
J M SMUCKER Co reported $2.34B of revenue in Q3 2026, up 7.0% year over year, with diluted EPS of $-6.79 and an operating margin of -23.4%.
- Revenue
- $2.34B
- YoY growth
- +7.0%
- Diluted EPS
- $-6.79
- Operating margin
- -23.4%
$2.34B
Revenue
+7.0%
YoY growth
$-6.79
Diluted EPS
-23.4%
Operating margin
01 Key takeaways
What management said
- •Tucker Marshall, Chief Financial Officer, Executive Vice President, Frozen Handheld and Spreads, and Sweet Baked Snacks, will then provide a detailed analysis of the financial results and our updated fiscal 2026 outlook.
- •Eastern Time today for a live question-and-answer session with management to further discuss our third quarter results and outlook for the full 2026 fiscal year.
- •We delivered another quarter of strong top-line growth, driven by the ongoing demand for our leading and iconic brands and higher growth brands as we continue to realize the benefits of our transformed portfolio.
- •First, we will continue to advance our long-term growth strategy and further the momentum of our portfolio of leading brands.
- •Second, we are highly focused on improving profitability and driving earnings growth across the company.
- •We are focused on continuing this momentum by prioritizing resources towards our largest growth opportunities, the Uncrustables, Café Bustelo, Milk-Bone, and Meow Mix brands.
- •Starting with the Uncrustables brand, which grew net sales 10% at the total company level.
- •With household penetration at just 26%, we continue to see a long runway for growth.
- •Our next key growth platform, the Café Bustelo brand, continues to deliver strong results and remains one of the fastest growing brands in the at-home coffee category.
- •The brand gained both dollar and volume share in every segment in which it competes, including the mainstream, pre-pack, one cup, and instant categories in the latest 13-week period.
- •Through our brand-building efforts, we continue to see strong growth in brand awareness and household penetration, both of which have significant runway for continued growth.
- •This fiscal year, we expect the brand to surpass $500 million in net sales, an increase of more than $100 million versus the prior year, driven by both volume and pricing.
What went well
- •Total company comparable net sales increased 8%, and 9% excluding contract manufacturing sales tied to the divested pet food brands, with third quarter results exceeding management's expectations.
- •The Uncrustables brand grew net sales 10% at the total company level, added approximately 3.5 million new households over the past year, and is on track to reach the $1 billion annual net sales aspiration this fiscal year with household penetration at just 26%.
- •Cafe Bustelo net sales increased 46% within U.S. Retail Coffee (including a 20% increase in volume mix), gaining dollar and volume share in every segment, and is expected to surpass $500 million in net sales this fiscal year, up more than $100 million versus the prior year.
- •U.S. Retail Coffee segment net sales increased 23%, driven by higher net pricing across the portfolio.
- •International and Away From Home net sales increased 12% and segment profit increased 17%, with Away From Home up 15% on coffee and Uncrustables sandwiches.
- •Third quarter free cash flow was $487 million, up from $151 million in the prior year, reflecting higher operating cash flow and lower capital expenditures.
What went wrong
- •The company recognized a $508 million goodwill impairment on the Sweet Baked Snacks reporting unit and a $454 million impairment on the Hostess brand trademark, reflecting near-term underperformance and reduced long-term expectations; the reporting unit's projected long-term growth rate was cut to 2% and the Hostess trademark will begin amortizing in the fourth quarter.
- •Sweet Baked Snacks segment net sales decreased 19% (down 11% excluding non-comparable prior-year items) and segment profit decreased 78% on higher costs, unfavorable volume mix, and higher marketing spend.
- •Adjusted earnings per share was $2.38, a 9% decrease versus the prior year, and adjusted operating income decreased $32 million or 7%.
- •Tariffs drove approximately $79 million in expense in the quarter, primarily impacting the coffee portfolio, and adjusted gross profit decreased $28 million or 3% on higher commodity costs and tariffs.
- •Comparable net sales volume mix declined 2 percentage points, driven by decreases for sweet baked goods and fruit spreads.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Uncrustables brand net sales | FY2026 | — | Expected to achieve $1 billion annual net sales aspiration | On track to reach aspiration this fiscal year |
| Cafe Bustelo net sales | FY2026 | — | Expected to surpass $500 million, up more than $100 million versus prior year | Increase of more than $100 million |
| Sweet Baked Snacks reporting unit long-term growth rate | Long-term | — | Reduced to 2% | Reduced |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total company comparable net sales | +8% (+9% ex-divested pet contract manufacturing) | Demand for leading and higher-growth brands; 10 ppt net price realization driven by coffee pricing, partially offset by 2 ppt volume mix decline |
| U.S. Retail Coffee net sales | +23% | Higher net pricing across the portfolio to recover increased costs; volume mix down 1 ppt on Dunkin' and Folgers declines, partially offset by Cafe Bustelo |
| U.S. Retail Coffee segment profit | -5% | Higher commodity costs and tariffs, unfavorable volume mix, and lapping favorable prior-year property taxes, partially offset by higher net price realization |
| U.S. Retail Frozen Handheld and Spreads net sales | +2% | Higher net pricing for Uncrustables sandwiches, partially offset by higher trade spend for peanut butter; volume mix neutral |
| U.S. Retail Frozen Handheld and Spreads segment profit | +4% | Higher net price realization and lower pre-production expenses for the new Uncrustables facility, partially offset by higher costs and unfavorable volume mix |
| U.S. Retail Pet Foods net sales | -1% | Lapping divested pet food contract manufacturing and a dog snacks decline, partially offset by cat food growth |
| U.S. Retail Pet Foods segment profit | +4% | Lower marketing spend |
| Sweet Baked Snacks net sales | -19% (-11% ex non-comparable items) | Volume mix down 10 ppt on declines in snack cakes, donuts, and breakfast |
| Sweet Baked Snacks segment profit | -78% | Higher costs, unfavorable volume mix, and higher marketing spend |
| International and Away From Home net sales | +12% | 11 ppt net price realization driven by coffee pricing; Away From Home up 15% on coffee and Uncrustables, international up 6% on coffee |
| International and Away From Home segment profit | +17% | Higher net price realization, partially offset by higher costs, tariffs, and unfavorable volume mix |
| Adjusted earnings per share | -9% to $2.38 | Lower adjusted gross profit and operating income from higher costs and tariffs, partially offset by lower SD&A expenses |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Coffee pricing to recover costs and tariffs | — | Net pricing drove 23 ppt of U.S. Retail Coffee growth and 10 ppt of total comparable net sales growth, with ~$79 million tariff expense mostly hitting coffee | rising |
| Uncrustables as a growth platform | — | 10% net sales growth, fridge-friendly and protein innovation, convenience-channel expansion, targeting top-three brand in the freezer aisle | rising |
| Cafe Bustelo expansion | — | 46% segment net sales growth, share gains across all segments, targeting top-four at-home coffee brand | rising |
| Sweet Baked Snacks / Hostess underperformance | — | Impairments of $508 million and $454 million, long-term growth rate cut to 2%, segment profit down 78% | declining |
| Disciplined capital deployment and debt paydown | — | Prioritizing organic growth, debt paydown, dividends and buybacks while maintaining investment-grade ratings | steady |
| Portfolio transformation post-pet divestiture | — | Lapping divested pet food contract manufacturing creating modest headwinds while two-thirds of portfolio grows or maintains dollar share | steady |