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Packaged food company J.M. Smucker (SJM) reported mixed 4Q25 results, delivering upside EPS of $2.31 that demonstrated SJM's disciplined cost management and pricing strength. However, net sales of $2.14 bln fell just short of expectations, reflecting a 3% yr/yr decline, or a 1% drop when excluding the impact of divestitures and FX. Furthermore, a substantial non-cash impairment charge of $1.005 bln, tied to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, severely impacted GAAP profitability. The charge underscores integration challenges following the Hostess Brands acquisition and broader pressures in the sweet snacks category.

• For FY26, SJM issued guidance that disappointed investors, particularly on the earnings front. The company projects adjusted EPS of $8.50–$9.50, well below the consensus estimate, while revenue growth of 2–4% aligns with expectations. The lower EPS guidance is primarily driven by external headwinds, including the impact of tariffs, ongoing input cost inflation (notably in green coffee), and shifts in consumer behavior toward value-driven purchasing amid economic uncertainty. Additionally, SJM lowered its long-term revenue growth target to 3%, signaling a more cautious outlook.
• This guidance is particularly striking given the reemergence of the eat-at-home trend, which has bolstered demand for packaged foods. For instance, Campell Soup (CPB) has emerged as a clear beneficiary of the eat-at-home trend, as illustrated by its strong Q3 results on June 2. The inability of SJM to fully capitalize on this favorable industry dynamic, combined with tariff-related disruptions and persistent inflation, is adding to the disappointment.
• The U.S. Retail Coffee segment emerged as a standout performer, with net sales rising 11% to $738.6 mln, driven primarily by higher net price realization for key brands like Folgers and Café Bustelo. Volume/mix remained neutral, indicating stable demand despite elevated coffee prices, reflecting the segment’s resilience amid inflationary pressures. Similarly, the Uncrustables brand within the U.S. Retail Frozen Handheld and Spreads segment continued to demonstrate strength, contributing a 1 percentage point increase in volume/mix. This growth reflects Uncrustables’ strong consumer appeal and successful marketing and distribution initiatives, positioning it as a key growth driver with projected net sales exceeding $900 mln in FY25.
• In contrast, the U.S. Retail Pet Foods segment experienced significant weakness, with net sales declining 13% to approximately $400 mln. This downturn was primarily driven by an 11 percentage point reduction in volume/mix, reflecting lower demand for dog snacks, notably Milk-Bone, and reduced contract manufacturing sales following the divestiture of certain pet food brands. 
• The Sweet Baked Snacks segment faced even steeper challenges, with net sales plummeting 26% to approximately $300 mln, partly due to the divestiture of the Voortman business and certain value brands in the prior year. Excluding these divestitures, net sales still declined by 14%, driven by reduced demand for snack cakes and donuts amid broader pressure on the snack food category. Consumers’ pullback on discretionary spending, coupled with integration challenges from the Hostess Brands acquisition, contributed to a 72% drop in segment profit and triggered the $1.005 bln impairment charge.

SJM's disappointing FY26 guidance, coupled with significant impairment charges and uneven segment performance, has triggered a sharp selloff in the stock. The market’s reaction reflects investor concerns over the company’s ability to navigate tariff-related disruptions, persistent inflation, and weakened performance in key segments like Sweet Baked Snacks and Pet Foods, despite bright spots in Coffee and Uncrustables.