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Smucker Raises Profit Outlook as Coffee Pricing Drives Quarterly Beat

Strong coffee price gains with robust cash flow create room for faster debt reduction and shareholder returns.

A range of Smucker's marmalade, preserves and jelly, a brand owned by The J.M. Smucker Company, is seen for sale in a store in Manhattan, New York City, U.S., November 22, 2021. REUTERS/Andrew Kelly
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Overview

  • Smucker reported fourth-quarter adjusted EPS of $2.77 and net sales of $2.27 billion, beating analyst estimates in a report released Tuesday.
  • For fiscal 2027 the company raised adjusted EPS guidance to $9.75–$10.25 per share with the midpoint above consensus while forecasting a 3–4% decline in annual net sales.
  • U.S. retail coffee led the quarter with $830.6 million in sales, up 12% year over year, driven largely by a roughly 21 percentage point boost from pricing while volumes fell.
  • The business generated $483.9 million in free cash flow for the quarter, returned $464.7 million to shareholders over the year and repaid $720 million in debt, and management said it will target roughly 3x leverage.
  • Smucker reached a February deal with activist Elliott that added two board members, the earnings release triggered about a 12% one-day stock surge, and investors will now watch pricing normalization, cost inflation and fiscal 2027 execution.