Q4 2026 J M Smucker Co Earnings Call

June 9, 2026

Speaker #1: Good morning and welcome to the J M Smucker Co 2026 fourth quarter earnings question and answer session. This conference call is being recorded and all participants are going to listen in only mode.

Operator: Good morning, welcome to The J.M. Smucker Co.'s Fiscal 2026 Q4 earnings question and answer session. This conference call is being recorded and all participants are in listen-only mode. Please limit yourselves to two questions and requeue if you have additional questions. I'll now turn the conference call over to Crystal Beiting, Vice President, Investor Relations and Financial Planning and Analysis. Thank you. You may begin.

Operator: Good morning, welcome to The J.M. Smucker Co.'s Fiscal 2026 Q4 Earnings Question and Answer Session. This conference call is being recorded and all participants are in listen-only mode. Please limit yourselves to two questions and re-queue if you have additional questions. I'll now turn the conference call over to Crystal Beiting, Vice President, Investor Relations and Financial Planning and Analysis. Thank you. You may begin.

Speaker #1: Please limit yourselves to two questions and review if you have additional questions. I'll now turn the conference call over to Crystal Beiting, Vice President of Investor Relations and Financial Planning and Analysis.

Speaker #1: Thank you. You may begin.

Speaker #2: Good morning, and thank you for joining our fiscal 2026 fourth quarter earnings question and answer session. I hope everyone had a chance to review our results as detailed in this morning's press release and management's prepared remarks.

Crystal Beiting: Good morning, thank you for joining our Fiscal 2026 Q4 earnings question and answer session. I hope everyone had a chance to review our results as detailed in this morning's press release and management's prepared remarks, which are available on our corporate website at jmsmucker.com. We will also post an audio replay of this call at the conclusion of this morning's Q&A session. During today's call, we may make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. Additionally, we use non-GAAP results to evaluate performance internally. I encourage you to read the full disclosure concerning forward-looking statements and details on our non-GAAP measures in this morning's press release.

Crystal Beiting: Good morning, thank you for joining our Fiscal 2026 Q4 Earnings Question and Answer Session. I hope everyone had a chance to review our results as detailed in this morning's press release and management's prepared remarks, which are available on our corporate website at jmsmucker.com. We will also post an audio replay of this call at the conclusion of this morning's Q&A session. During today's call, we may make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates, and actual results may differ materially due to risks and uncertainties. Additionally, we use non-GAAP results to evaluate performance internally. I encourage you to read the full disclosure concerning forward-looking statements and details on our non-GAAP measures in this morning's pres``s release.

Speaker #2: Which are available on our corporate website at jmsmucker.com. We will also post an audio replay of this call at the conclusion of this morning's Q&A session.

Speaker #2: During today's call, we may make forward-looking statements that reflect our current expectations about future plans and performance. These statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties.

Speaker #2: Additionally, we use non-GAAP results to evaluate performance internally. I encourage you to read the full disclosure concerning forward-looking statements and details on our non-GAAP measures in this morning's press release.

Speaker #2: Participating on this call are Mark Smucker, Chief Executive Officer President and Chair of the Board, and Tucker Marshall, Chief Financial Officer Executive Vice President Frozen Handheld and Spreads and Sweet Baked Snacks.

Crystal Beiting: Participating on this call are Mark Smucker, Chief Executive Officer, President, and Chair of the Board, and Tucker Marshall, Chief Financial Officer, Executive Vice President, Frozen Handheld and Spreads, and Sweet Baked Snacks. We will now open the call for questions. Operator, please queue up the first question.

Speaker #2: We will now open the call for questions. Operator, please cue up the first question.

Speaker #3: Thank you. The question and answer session will begin at this time. If you're using a speakerphone, please pick up the handset before pressing any numbers.

Operator: Thank you. The question and answer session will begin at this time. If you're using a speakerphone, please pick up the handset before pressing any numbers. Should you have a question, please press star one on your telephone. If you wish to withdraw your question, please press star two. For operator assistance, please press star zero. As a reminder, please limit yourselves to two questions during the Q&A session. Should you have additional questions, you may requeue, and the company will take questions as time allows. Our first question today is coming from Andrew Lazar from Barclays. Your line is now live.

Operator: Thank you. The question and answer session will begin at this time. If you're using a speakerphone, please pick up the handset before pressing any numbers. Should you have a question, please press star one on your telephone. If you wish to withdraw your question, please press star two. For operator assistance, please press star zero. As a reminder, please limit yourselves to two questions during the Q&A session. Should you have additional questions, you may re-queue, and the company will take questions as time allows. Our first question today is coming from Andrew Lazar from Barclays. Your line is now live.

Speaker #3: Should you have a question, please press star one on your telephone. If you're with wish to withdraw your question, please press star two. Operator assistance, please press star zero.

Speaker #3: As a reminder, please limit yourselves to two questions during the Q&A session. Should you have additional questions, you may re-queue and the company will take questions as time allows.

Speaker #3: Our first question today is coming from Andrew Lizar from Barclays. Your line is now live.

Speaker #4: Great. Thanks so much. Good morning, everybody. good morning.

Andrew Lazar: Great. Thanks so much. Good morning, everybody.

Operator: Morning.

Speaker #5: Good morning.

Crystal Beiting: Morning.

Speaker #3: Good morning.

Andrew Lazar: Morning. Maybe to start, I know one of the biggest points of uncertainty for the group currently is really the macro outlook and what that might mean for costs. Understanding the challenge of needing to guide to a full year in the context of this environment, I guess I'm curious what sort of visibility you have to your low single-digit inflation outlook, excluding coffee, in terms of hedges and such. Is there a risk that this estimate could ultimately be higher as it moves through the year if the macro environment persists, and the offsets that you might have in terms of productivity generation to manage through that?

Speaker #4: maybe, you know, maybe to start, I, I know one of the, the biggest points of uncertainty for the group currently is really the, the macro outlook and, and what that might mean for costs.

Speaker #4: You know, understanding the challenge of needing to guide, you know, to a full year in, in the context of this environment. I guess I'm curious what sort of a visibility you have to your low single-digit inflation outlook excluding coffee, in terms of hedges and such.

Speaker #4: And, you know, is there a risk that this estimate could ultimately be higher as we move through the year if, if sort of the macro environment persists?

Speaker #4: And sort of the offsets that you might have in terms of pro-productivity generation to, to manage through that?

Speaker #5: Andrew, good morning and thank you. as you've noted, within our full-year outlook, we do expect mid-single-digit percentage deflation, and again, that's largely driven by green coffee.

Tucker Marshall: Andrew, good morning and thank you. As you've noted, within our full-year outlook, we do expect mid-single digit percentage deflation. Again, that's largely driven by green coffee. As you've shared, excluding green coffee and tariffs, we do anticipate cost inflation of low single digits across the balance of our portfolio, and that's largely coming through packaging, ingredients, and transportation. We have embedded our best outlook for those increases in our current guidance. As you know, in any given fiscal year, we'll monitor and address any additional cost inflation, either through how we procure the given item or how we think about our hedging strategy, along with ongoing cost and productivity savings, inclusive of taking pricing when and where appropriate. Right now, this really reflects the best estimate. Again, we look to absorb these changes within our total guidance range.

Speaker #5: But as you've shared, excluding green coffee and tariffs, we do anticipate cost inflation of low single digits across the balance of our portfolio. And that's largely coming through packaging, ingredients, and transportation.

Speaker #5: And we have embedded our best outlook for those increases in our current guidance. And as you know, in any given fiscal year, we'll monitor and address any additional cost inflation either through how we procure the given item or how we think about our hedging strategy, along with ongoing cost and productivity savings inclusive of taking pricing when and where appropriate.

Speaker #5: And so right now, this really reflects the best, estimate. And again, we look to absorb these changes within our total guidance range. And just acknowledging that the primary driver of this is the geopolitical tensions in the Middle East and depending upon the duration of those does have an implication to, to the cost outlook and how we manage over time.

Tucker Marshall: Just acknowledging that the primary driver of this is the geopolitical tensions in the Middle East. Depending upon the duration of those, does have an implication to the cost outlook and how we manage over time.

Speaker #4: And then in coffee, you know, given the expected mid-single-digit, price decline or price realization, year over year for the coming year, I guess w-why wouldn't why wouldn't we, expect a somewhat greater volume outcome or volume improvement with, with pricing moving lower?

Andrew Lazar: In coffee, given the expected mid-single-digit price decline or price realization year-over-year for the coming year, I guess why wouldn't we expect a somewhat greater volume outcome or volume improvement with pricing moving lower? Thanks so much.

Speaker #4: Thanks so much.

Speaker #5: Thanks, Andrew. I'll, I'll take the second question. This is Mark, of course. I, I can't help but at least comment, first of all, that we had a great quarter.

Mark Smucker: Thanks, Andrew. I'll take the second question. This is Mark, of course. I can't help but at least comment, first of all, that we had a great quarter and a solid outlook for our new fiscal year. Just feeling positive about the momentum in our business and overall the portfolio that we have being both complementary and cohesive. Because we play in different categories, but they all work together to achieve a great whole. Specific to your question just on coffee, it is a great category. We continue to lead the category across segments and the value spectrum with Bustelo being a very significant growth brand now beyond half a billion dollars in sales. Just confident in our ability to continue to manage our branded position in coffee as well as our commodity.

Speaker #5: And a solid outlook for our new fiscal year. And so just, you know, feeling positive about the momentum in our business and overall the portfolio that we have being both complementary and cohesive.

Speaker #5: you know, just because we play in different categories, but they all work together to, to achieve a, a great whole. And, and then specific to your question, just on, on coffee, you know, it is a great category.

Speaker #5: We continue to lead the category across segments and the value spectrum. With Boostello being a very significant growth brand, now beyond half a billion dollars in sales.

Speaker #5: So just confident in our ability to continue to manage our branded position in coffee as well as our commodity. And as we noted, we do expect to see profit improvement, in coffee from the moderating commodity and as it relates to how we're thinking about, forecasting the business, we really just wanted to be frankly prudent in terms of how we're factoring in elasticities, we acknowledge we did have some favorable more favorable than expected elasticities i-in the in the inflationary period.

Mark Smucker: As we noted, we do expect to see profit improvement in coffee from the moderating commodity. As it relates to how we're thinking about forecasting the business, we really just wanted to be frankly prudent in terms of how we're factoring in elasticities. We acknowledge we did have some more favorable than expected elasticities in the inflationary period. Just acknowledging that the consumer continues to be cautious. We wanted to be prudent in how we model the deflation. As we are starting to give back some pricing to the consumer in the form of trade, just making sure that we're thinking about those elasticities and the trends in the category from a prudent perspective. That's really the driver there.

Speaker #5: But just acknowledging that the consumer continues to be cautious, we wanted to be prudent in how we model the, the deflation and as we are starting to, to give back some pricing to the consumer in the form of trade, just making sure that we're thinking about, those elasticities and the trends in the category from a prudent perspective.

Speaker #5: So that that's really the, the driver there.

Speaker #4: Great. Very helpful. Thanks so much.

Andrew Lazar: Great. Very helpful. Thanks so much.

Speaker #3: Thank you. Next question today is coming from Peter Galbo from Bank of America. Your line is now live.

Operator: Thank you. Next question today is coming from Peter Galbo from Bank of America. Your line is now live.

Speaker #6: Hi. Good morning. Thank you for the questions. Mark, I was hoping to press a little bit, on, on that last point you made, around prudence as it relates to the to the top-line guide for the year.

Peter Galbo: Hi, good morning. Thank you for the questions. Mark, I was hoping to press a little bit on that last point you made around prudence as it relates to the top line guide for the year. Obviously talking about flat sales in Q1 and then a deceleration, I suppose, to get to the full year down three to four. Understanding that maybe there's some prudence baked into the coffee side of the equation, maybe you can just touch a little bit more on prudence in the other segments. Particularly, I think Frozen Handheld maybe down despite Uncrustables growth potential. Just if you could provide a little more detail there, please.

Speaker #6: obviously talking about flat sales in the first quarter and then a, a deceleration, I suppose, to get to the, the full year down three to four.

Speaker #6: So, u-understanding that maybe there's some prudence baked into, the, the coffee side of the equation, maybe you can just touch a little bit more on prudence in, in the other segments, particularly I think frozen handheld, maybe, maybe down despite uncrustable, you know, growth potential.

Speaker #6: Just if you could if you could provide a little more detail there, please.

Speaker #5: Sure. So if you think about our frozen handheld and spreads business, I think it's important to think about that business holistically, right? Because we are seeing a little bit of pressure in spreads, but our uncrustables brand continues to, to perform very well.

Mark Smucker: Sure. If you think about our Frozen Handheld and Spreads business, I think it's important to think about that business holistically, right? Because we are seeing a little bit of pressure in spreads, but our Uncrustables brand continues to perform very well. It is, if you think about that holistically, a peanut butter and jelly story. It's a sandwich story, right? Uncrustables hit $1 billion. We have a tremendous performance in Uncrustables. We do expect to continue to see growth in the Uncrustables brand, and that's going to continue to be driven by the breadth of our position in the frozen category, and that includes our offerings, the fact that we're addressing consumer needs, both through flavors, through formats, and also different occasions, notably with the higher protein sort of morning offering, if you will, and now fridge friendly.

Speaker #5: and so it, it is if you think about that holistically, it's a peanut butter and jelly story. it's a sandwich story. Right? And uncrustables hit a billion dollars.

Speaker #5: So we have a, a tremendous performance in uncrustables. And, you know, we do expect to continue to see growth, in, in the uncrustables brand.

Speaker #5: And that's gonna continue to be driven by the breadth, of our position in, in the frozen category, both and that includes our offerings, the fact that we're addressing, consumer needs both through flavors, through formats, and, and also different occasions, notably with the higher protein sort of morning offering, if you will.

Speaker #5: And now fridge-friendly. So our position in uncrustables continues to give us great confidence that we will continue to see growth. We it won't be double-digit growth, but, but nonetheless, as a leader in the category with the strongest share of voice, we do continue to, to believe that there is runway both through distribution, household penetration, innovation, and then ultimately strategic investments in, in supporting the brand through, through our brand-building efforts.

Mark Smucker: Our position in Uncrustables continues to give us great confidence that we will continue to see growth. It won't be double-digit growth, but nonetheless, as a leader in the category with the strongest share of voice, we do continue to believe that there is runway both through distribution, household penetration, innovation, and ultimately strategic investments in supporting the brand through our brand-building efforts. Again, great confidence in Uncrustables overall, and then just the total spreads in handheld category being more about that PB&J total story.

Speaker #5: So again, great confidence in uncrustables overall. And then just the, the total spreads and hand you know, handheld category being more about that PV&J total story.

Speaker #4: Okay. Tha-thanks for that, Mark. and just as a follow-up, you know, Tucker, there's obviously been some, some trade press, around potential further actions on a on a portfolio review basis.

Peter Galbo: Just as a follow-up, Tucker, there's obviously been some trade press around potential further actions on a portfolio review basis as it relates to the Hostess business. Just curious, as you all are evaluating potential options, just how you're thinking about portfolio construction and potential for further actions across the portfolio. Thanks.

Speaker #4: as it relates to, to the hostess business. Just curious, a-as you all are evaluating potential options, you know, just, just how you're thinking about portfolio construction and, and potential, for, for further actions, across the portfolio.

Speaker #4: Thanks.

Speaker #5: Yeah, Peter. It's Mark. I'll take that as well. You know, a-as we think about our portfolio in general, we've, we've been on this journey for quite some time in terms of our portfolio.

Mark Smucker: Yeah, Peter, it's Mark. I'll take that as well. As we think about our portfolio in general, we've been on this journey for quite some time in terms of our portfolio. We always consider the makeup our portfolio, that's something that is important to us. What I would focus on right now is as it relates to Sweet Baked Snacks and Hostess, our focus continues to be stabilizing that business and improving profitability. Notably, we have strengthened the portfolio in terms of SKU rationalization. Obviously, donuts grew 13% and represents about 40% of the portfolio, so that breakfast occasion for Hostess continues to perform very well. I would also highlight that we did complete our manufacturing footprint consolidation, and although we did have a fire in the prior quarter, we did recover from that more quickly than expected.

Speaker #5: We always consider the, the makeup our portfolio, and so that's something that is important to us. But what I would focus on right now is as it relates to sweet baked snacks and hostess, our focus continues to be stabilizing that business and improving profitability.

Speaker #5: Notably, we have strengthened the portfolio in terms of skew rationalization, obviously donuts grew 13% and represents about 40% of the portfolio. So that breakfast occasion for hostess continues to perform very well.

Speaker #5: I would also highlight that we did complete our manufacturing footprint consolidation. And although we did have a fire in the in the, prior quarter, we did recover from that more quickly than expected.

Speaker #5: So definitely some positive indicators, some innovation—notably Susie Q's—among some of our other seasonal and LTO things. We're going to continue to focus on stabilizing the portfolio. It's going to take some time, and it's going to take a bit of time until we actually see top-line growth.

Mark Smucker: Definitely some positive indicators, some innovation, notably Suzy Q's, among some of our other seasonal and LTO things. We're going to continue to focus on stabilizing the portfolio. It's going to take some time, and it's going to take a bit of time until we actually see top-line growth. Suffice it to say, stabilizing the business and improving profitability is where we're focused right now.

Speaker #5: But suffice it to say, stabilizing the business and improving profitability is where we're focused right now.

Speaker #4: Okay. Thank you.

Peter Galbo: Great. Thank you.

Speaker #3: Thank you. Next question today is coming from Tom Palmer from JP Morgan. Your line is now live.

Operator: Thank you. Next question today is coming from Thomas Palmer from JPMorgan. Your line is now live.

Speaker #7: Good morning. Thanks for the question. in the prepared remarks, you gave some specific, margin expectations for coffee and sweet baked snacks. I, I wonder if you might give some added detail for frozen handheld spreads and, and pet segments.

Thomas Palmer: Good morning. Thanks for the question. In the prepared remarks, you gave some specific margin expectations for Coffee and Sweet Baked Snacks. I wonder if you might give some added detail for Frozen Handheld Spreads and Pet segments. For Pet, do you expect low single-digit top-line growth to translate to profit growth? For Frozen Handheld, to what extent might the margin strength of the Q4 be sustained into 2027? Thank you.

Tom Palmer: Good morning. Thanks for the question. In the prepared remarks, you gave some specific margin expectations for Coffee and Sweet Baked Snacks. I wonder if you might give some added detail for Frozen Handheld Spreads and Pet segments. For Pet, do you expect low single-digit top-line growth to translate to profit growth? For Frozen Handheld, to what extent might the margin strength of the Q4 be sustained into 2027? Thank you.

Speaker #7: So for, for pet, do you expect low single-digit top-line growth to translate to, to profit growth? And then for frozen handheld, to what extent might the margin strength of the fourth quarter be sustained into 2027?

Speaker #7: Thank you.

Speaker #5: Yeah. Tom, as you think about the construct of our $0.85 EPS growth year over year, what you're really seeing is $0.75 coming through our business portfolio, which is driven by segment profit growth from both coffee and Hostess, being offset by frozen handheld and pet.

Tucker Marshall: Yeah, Tom, as you think about the construct of our $0.85 EPS growth year-over-year, what you're really seeing is $0.75 coming through our business portfolio. Which is driven by segment profit growth from both Coffee and Hostess being offset by Frozen Handheld and Pet. When you think through that is the Coffee growth year-over-year is largely coming through lapping unmitigated tariffs and the green coffee deflation that is beginning to materialize through the portfolio. Hostess' growth year-over-year is largely driven by improved cost outlook, inclusive of a list price increase to cover cost inflation. Frozen Handheld and Spreads will be down year-over-year as volume momentum in Uncrustables is offsetting the spreads portfolio, but also as we continue to make strategic investments across Uncrustables and we support marketing of that brand as well.

Speaker #5: And really when you think through that is the coffee growth year over year is largely coming through lapping unmitigated tariffs, and the green coffee deflation that is beginning to materialize through the portfolio.

Speaker #5: Hostess's growth year over year is largely driven by an improved cost outlook, inclusive of a list price increase to cover cost inflation. Frozen handheld and spreads will be down year over year, as volume momentum in Uncrustables is offsetting the spreads portfolio.

Speaker #5: But also as we continue to make strategic investments across uncrustables, and we support marketing of that brand as well. And then within the pet portfolio, we see continued volume momentum across both Meowmix and Milkbone.

Tucker Marshall: Within the Pet portfolio, we see continued volume momentum across both Meow Mix and Milk-Bone, but we are also making investments in terms of marketing and the inflation that we're experiencing is largely impacting our Pet portfolio. Lastly is, as you just think about the momentum of the portfolio, we do expect the away-from-home business to roughly be flat year-over-year from a profit standpoint.

Speaker #5: But we are also making investments in terms of marketing, and the inflation that we're experiencing is largely impacting our pet portfolio. And then, lastly, as you just think about the momentum of the portfolio, we do expect the away-from-home business to roughly be flat year over year from a profit standpoint.

Speaker #4: Great, thanks for all that detail. I did have a follow-up on marketing. I think, relative to what was laid out in the third quarter, marketing was a lot lower in the fourth quarter.

Thomas Palmer: Great. Thanks for all that detail. I did have a follow-up on marketing. I think relative to what was laid out in Q3, marketing was a lot lower in Q4. Just any color on the decision to pull back in Q4 and how quickly it ramps up to start out the year. Thanks.

Tom Palmer: Great. Thanks for all that detail. I did have a follow-up on marketing. I think relative to what was laid out in Q3, marketing was a lot lower in Q4. Just any color on the decision to pull back in Q4 and how quickly it ramps up to start out the year. Thanks.

Speaker #4: Just any color on the decision to pull back in the fourth quarter, and kind of how quickly it ramps up to start out the year?

Speaker #4: Thanks.

Speaker #5: Yeah. So we are committed to supporting the growth of our brands and the development of our brands through ongoing marketing. And we've called out that we're about 5, 5.7% of net sales for the upcoming fiscal year.

Tucker Marshall: Yeah. We are committed to supporting the growth of our brands and the development of our brands through ongoing marketing, We've called out that we're about 5.7% of net sales for the upcoming fiscal year. It's going to look like up $30 million year-over-year, almost a half a billion dollar spend. It will be fairly balanced throughout the year, but it will begin in our Q1 in terms of those investments to support the portfolio. I would just say there was nothing abnormal in our Q4. It was probably more just around timing, and focusing around various activities. Again, we are committed to the portfolio and the spend of those marketing dollars as we move forward.

Speaker #5: It's gonna look like up $30 million year over year, almost a, a half a billion dollar spend. And it, it will be fairly balanced throughout the year, but it will begin in our first quarter.

Speaker #5: In terms of those investments to support the portfolio, I would just say there was nothing abnormal in our fourth quarter. It was probably more just around timing.

Speaker #5: ...and focusing around various activities. But again, we are committed to the portfolio and the spend of those marketing dollars as we move forward.

Speaker #3: Understood. Thank you.

Thomas Palmer: Understood. Thank you.

Tom Palmer: Understood. Thank you.

Speaker #4: Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Robert Moscow from TD Cowen.

Operator: Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Robert Moskow from TD Cowen. Your line is now live.

Speaker #4: Your line is now live.

Speaker #8: Hey there. Thanks, Tucker and Mark. There are some comments about what the transformation office is up to—they're rather brief. And a lot of your peers are doing some accelerated work to reduce overhead costs.

Robert Moskow: Hey there. Thanks. Tucker and Mark, there is some comments about what the transformation office is up to. They are rather brief. A lot of your peers are doing some accelerated work to reduce overhead costs, and you might have some opportunities that you want to get to. Is there anything that you are looking at to accelerate the efforts of the transformation office, if not in fiscal 2027, maybe even a year from now?

Speaker #8: And, and you might have some opportunities that, that you wanna get to. Is there anything that, that you're looking at to accelerate the efforts of the transformation office?

Speaker #8: If not in fiscal '27, you know, maybe even a year from now.

Speaker #5: Yeah. Rob, we remain committed to ongoing and annual cost and productivity initiatives. And I would say that each fiscal year, we target a gross cost savings amount that is coupled with points of revenue.

Tucker Marshall: Yeah, Rob, we remain committed to ongoing and annual cost and productivity initiatives. I would say that each fiscal year, we target a gross cost savings amount that is a couple points of revenue to support either reinvestment in the business, to cover inflation, or to ultimately return to shareholders. As we think about the ongoing positive momentum of our transformation efforts under Rob Ferguson's leadership, he is really thinking about the next generation, which is refilling a multi-year pipeline and really begin to focus on really two areas, I would say. He would refer to it as our buy, make, and move environments within our supply chain, and also how we think about bringing technology forward to advance our cost picture as a company.

Speaker #5: To support either reinvestment in the business, to cover inflation, or to ultimately, you know, return to, to shareholders. As we think about the ongoing positive momentum of our transformation efforts under Rob Ferguson's leadership, he's really thinking about the next generation.

Speaker #5: Which is refilling a multi-year pipeline and really begin to focus on really two areas I would say are make or he would refer to it as our buy-make-and-move environments within our supply chain.

Speaker #5: And also how we think about bringing technology forward to advance our cost picture as a company. Over time, we will be able to share more with you and others as we think about the next phase of our transformation efforts.

Tucker Marshall: Over time, we will be able to share more with you and others as we think about sort of the next phase of our transformation efforts.

Speaker #8: Okay. Thank you.

Robert Moskow: Okay. Thank you.

Speaker #4: Thank you. Next question today is coming from Chris Carey from Wells Fargo Securities. Your line is now live.

Operator: Thank you. Next question today is coming from Chris Carey from Wells Fargo Securities. Your line is now live.

Speaker #9: Hi, thanks so much. I wanted to start with coffee and get a bit more context on the pricing actions. So, first, just from a timing perspective.

Chris Carey: Hi. Thanks so much. I wanted to start with coffee and just get a bit more context on the pricing actions. First is just from a timing perspective, at what point are you transitioning from trade spending into list price reductions? Is that pricing strategy happening across the portfolio, or is it primarily focused on the roast and ground piece, given the proximity to the actual green coffee commodity?

Speaker #9: At what point are you transitioning from trade spending into list price reductions? And then, is that pricing strategy happening across the portfolio, or is it primarily focused on the roast and ground piece, given the proximity to the actual green coffee commodity?

Speaker #5: Chris, thanks. It's Mark. You know, coffee is a pass-through category, right? So we do pass through up and down costs to our customers and our consumers.

Mark Smucker: Chris, thanks. It's Mark. Coffee is a pass-through category, right? We do pass through up and down costs to our customers and our consumers. We do it prudently. We do it in a justified manner. When we speak with our retail customers, we certainly are going to have conversations that are fair and justified as we take those. As I did mention, and you point out, currently focus a bit more on trade. We can't commit to specific timing. What I will tell you is when we do cross key thresholds that are essentially dictated by us, the timing of when we take physical inventory of lower cost coffee, that would dictate when we would actually take a list price decline.

Speaker #5: We always are. We do it prudently; we do it in a justified manner when we speak with our retail customers. We certainly are going to have conversations that are, you know, fair and justified as we take those.

Speaker #5: as I did mention and you, you point out, you know, currently focus a bit more on trade. You know, we can't commit to specific timing, but what I will tell you is when we do cross key thresholds, that are essentially dictated by us, the timing of when we take physical inventory, of lower-cost coffee, that would dictate when we would actually take a list price decline but, we want to make sure that we a-of course continue to take a measured approach that also supports our financial goals for the year and our ability to both be fair with our customers and consumers and, of course, deliver some degree of profit recovery, which, which you've seen in our guidance.

Mark Smucker: We want to make sure that we, of course, continue to take a measured approach that also supports our financial goals for the year and our ability to both be fair with our customers and consumers and, of course, deliver some degree of profit recovery, which you've seen in our guidance.

Speaker #5: Chris, I would also acknowledge, from a flow standpoint, if we've called out a down 3% to down 4% of top-line net sales in our prepared remarks, we talked about our first quarter being flattish.

Tucker Marshall: Chris, I would also acknowledge from a flow standpoint, if we've called out a -3% to -4% of top-line net sales. In our prepared remarks, we talked about our Q1 being flattish. We'll really begin to experience the deflation associated with green coffee in our Q2 onward. Just to give you a sense of kind of the flow through the year from a top-line standpoint.

Speaker #5: We'll really begin to experience the deflation associated with green coffee in our second quarter onward, just to give you a sense of the flow through the year from a top-line standpoint.

Speaker #4: Okay. Understood. The second question is on Sweet Baked Snacks. The outlook for the year I think implies something in the 30% growth range from a profit perspective.

Chris Carey: Okay. Understood. The second question is on Sweet Baked Snacks. The outlook for the year, I think, implies something of a 30% growth range from a profit perspective, given the margin improvement you're expecting, thereabouts anyways. The visibility of this business has been a bit challenged in recent quarters. Can you just give us a sense on your ability to forecast accurately this business, how you feel about that? How does fiscal Q4 come in relative to your own expectations? Maybe a bit more context on the confidence that you have in a strong profit acceleration for the business in fiscal 2027. Thanks.

Speaker #4: Given the margin improvement you're expecting. Thereabouts anyways. The visibility of this business has been a bit challenged in, in recent quarters. Can you just give us a sense on your ability to, you know, forecast accurately this business?

Speaker #4: How you feel about that? How did fiscal Q4 come in relative to your own expectations? And, maybe a bit more context on the confidence that you have in, you know, a, a strong profit acceleration for the business in fiscal '27.

Speaker #4: Thanks.

Speaker #5: Yeah. I'll start, and maybe pass it to Tucker if he has anything to add. We've gotten our arms around this business in terms of visibility, as you point out.

Mark Smucker: Yeah, I'll start, maybe pass it to Tucker if he has anything to add. We've gotten our arms around this business in terms of visibility, as you point out. Last year, we did have some challenges with trade and the timing of that. I think we've done a very nice job, and I have to give the team and Judd a lot of credit, just in terms of how we're managing through this, both in terms of the production network, the consistency of how we're producing the products, as well as how we are consistently managing our customer and trade relationships.

Speaker #5: Y-you know, last year we did have some challenges with, with trade and the timing of that. I think we've done a very nice job and have to give the team and Judd a lot of credit.

Speaker #5: just in terms of how we're managing through this, both in, in, in terms of the production network, the consistency of how we're producing the products, as well as how we are consistently managing our, our customer and trade relationships.

Speaker #5: And Chris, I would a-acknowledge that, you know, your, your direction of up about 30% year over year from a segment profit standpoint is correct.

Tucker Marshall: Chris, I would acknowledge that your direction of up about 30% year-over-year from a segment profit standpoint is correct. We believe that we continue to work to control costs within our bakery environment. We continue to focus on executing the best level of trade against the brand or the portfolio. We are taking a list price increase across the donuts portfolio in certain select areas. As we think about the objectives for this year, it's stabilize the business and achieve our profit targets. Then over time, work to growth across the portfolio. We also acknowledge that we will continue to deal with both headwinds and tailwinds. We're confident, as Mark said, with the visibility that we have and the fact that the teams have their arms around what needs to be accomplished.

Speaker #5: You know, we believe that we continue to work to control costs within our bakery environment. We continue to focus on executing the best level of trade against the brand or the portfolio.

Speaker #5: We are taking a list price increase across the donuts portfolio in certain select areas. And as we think about the objectives for this year, it's to stabilize the business and achieve our profit targets.

Speaker #5: And then over time, work to, to growth across the portfolio. but we also a-acknowledge that we, we will continue to deal with both headwinds and tailwinds, but we're confident as Mark said with, with the visibility that we have and the fact that the teams have their arm around their arms around, excuse me, what needs to be accomplished.

Speaker #4: Okay. Thank you.

Chris Carey: Okay. Thank you.

Speaker #2: Thank you. Our next question today is coming from Max Comfort from BNP Paribas. Your line is now live.

Operator: Thank you. Our next question today is coming from Max Gumport from BNP Paribas. Your line is now live.

Speaker #5: Hey. Thanks for the question. First, I just wanted to, to talk about the, the spreads business. You, you called out, you know, various weakness, partly due to broader category dynamics and partly due to the decision not to repeat certain promotional activities.

Max Gumport: Hey, thanks for the question. First, I just wanted to talk about the spreads business. You called out whatever weakness, partly due to broader category dynamics and partly due to the decision not to repeat certain promotional activities. I was hoping to get a bit more color on both. One, what you're seeing in the category, and then two, on this decision not to repeat promo activity. We've heard others in the industry talk about consumers waiting to buy in promotion and that leading to poor returns. Are you seeing this dynamic as well? Thanks very much.

Speaker #5: I was hoping to get a bit more color on both, though. So one, what you're seeing in the category, and then two, on this decision not to repeat promo activity.

Speaker #5: We've heard others in the industry talk about consumers waiting to buy in promotion, and that leading to poor returns. Are, are you seeing this dynamic as well?

Speaker #5: Thanks very much. Max, our spreads business obviously is a key component of our frozen handheld and spreads. And what I would tell you is, having chosen not to repeat some of the promotional activity, the behavior of the categories themselves, as well as competition within there, continues to be mostly rational.

Mark Smucker: Max, our spreads business obviously is a key component of our Frozen Handheld and Spreads. What I would tell you is, having chosen not to repeat some of the promotional activity, the behavior of the categories themselves as well as competition within there continues to be mostly rational. We're not seeing unusual activity. In the peanut butter category specifically, obviously, we're the leader in both categories, and some of the softness that you have seen in the peanut butter category was in part driven by some volatility. There have been some weather events, some stock-up because of storms and so forth. We do not believe that this is structural in the peanut butter category.

Speaker #5: You know, we're not seeing unusual activity in the peanut butter category specifically. Obviously, we are we're the leader in both categories. And, and, and some of the softness that you have seen in the peanut butter category was in part driven by some volatility.

Speaker #5: There have been some weather events, some stock up because of storms and so forth. We do not believe that this is structural. In the peanut butter category.

Speaker #5: We think that those are generally one-off events, and we will continue to focus on our leadership position in the peanut butter category by maintaining our strong share of voice and brand-building efforts.

Mark Smucker: We think that those are generally one-off events. We will continue to focus on our leadership position in the peanut butter category by continuing our strong share of voice and brand-building efforts. Just reminding the group that we do play across that entire segment. Having the leading stabilized peanut butter and then also four of the five leading brands of natural and organic peanut butter, we are well-positioned. Notably, we just launched this Jif Simply product, which is a limited ingredient, stabilized peanut butter, which again, is intended to lead where the consumer, in some cases, is moving towards. Feel very good about the portfolio in peanut butter and spreads broadly. Over the coming year plus, we will continue to make strides to improve our fruit spreads business as well.

Speaker #5: And just reminding the group that we do play across that entire segment. So, having the leading stabilized peanut butter, and then also four of the five leading brands of natural and organic peanut butter, we are well positioned. And then notably, we just launched this Just Simply product, which is a limited-ingredient stabilized peanut butter, which again is intended to lead where the consumer, in some cases, is moving towards.

Speaker #5: So, feel very good about the portfolio in peanut butter and spreads broadly. And then, over the coming year plus, we will continue to make strides to improve our fruit spreads business as well.

Speaker #5: But I would think about both of the both the, the peanut butter and jam segments as, foundational to our total frozen handheld and spreads business.

Mark Smucker: I would think about both the peanut butter and jam segments as foundational to our total Frozen Handheld and Spreads business.

Speaker #5: Great. Really appreciate all that color. And then on, on crustables and the, the fridge-friendly format, that will be launching very shortly. Just, just curious if one, if you've got an any, insights on how on, on retail or reception and maybe even pipeline fill and then how that is looking.

Max Gumport: Great. Really appreciate all that color. On Uncrustables and the fridge-friendly format that will be launching very shortly, just curious if, one, if you've got any insights on retailer reception, and maybe even pipeline fill and how that is looking. Also if you're able to quantify what exactly is embedded in your outlook from this innovation. As also related, just any difference in the margin profile of the fridge-friendly versus the core product. Thanks very much.

Speaker #5: Then also if, if you're able to quantify what exactly is embedded in your outlook from, from this innovation and as, as also really in just any difference in the margin profile of the fridge-friendly versus the core product.

Speaker #5: Thanks very much. So first of all, thanks for the question. Great reception on fridge-friendly. Right? So both consumers and customers look to be very excited about that.

Mark Smucker: First of all, thanks for the question. Great reception on fridge-friendly, right? Both consumers and customers look to be very excited about that. Keep in mind that all Uncrustables will be fridge-friendly. We are transitioning every sandwich to that format and the entire portfolio probably in the mid-summer timeframe, so we're very close. Everything you see in the stores should be fridge-friendly.

Speaker #5: Keep in mind that all uncrustables will be fridge-friendly. So we are transitioning every sandwich to that format and the and the entire portfolio probably in the mid-summer time frame so we're very close.

Speaker #5: Everything you see in the stores should be fridge friendly.

Speaker #2: Max, as you think about uncrustables now being a billion-dollar brand, total company, you know, our outlook for that business or FY27 is, is mid-single digit growth which is really driven by volume mix momentum just partially offset by some strategic investments.

Tucker Marshall: Max, as you think about Uncrustables now being a billion-dollar brand total company, our outlook for that business for FY27 is mid-single digit growth, which is really driven by volume mix momentum, just partially offset by some strategic investments. As you think about the composition of the portfolio, about 75% of Uncrustables go through traditional US retail sales, and the balance of 25% go through away-from-home. We'll see a slightly faster growth rate in away-from-home just based on its relative size and incremental opportunities as we have prioritized over the years the growth in US retail ahead of away-from-home. It continues to be a bright spot for the company and a very positive story, and we see great momentum across the portfolio through innovation, and the one example of innovation is the fridge-friendly.

Speaker #2: And then, as you think about the composition of the portfolio, about 75% of Uncrustables go through traditional U.S. retail sales, and the balance of 25% go through away from home.

Speaker #2: We'll see a, a slightly faster growth rate and away from home just based on its relative size and incremental opportunities as we have prioritized over the years the growth in US retail ahead of away from home.

Speaker #2: But it continues to be a bright spot for the company and a very positive story. And we see great momentum across the portfolio through innovation and the one example of innovation is the fridge-friendly.

Speaker #4: Thank you. Our next question is coming from Megan Cloud from Morgan Stanley. Your line is now live.

Operator: Thank you. Our next question is coming from Megan Clapp from Morgan Stanley. Your line is now live.

Speaker #6: Hi, good morning. Thanks so much. Maybe, maybe to follow up there, Tucker, just on Uncrustables, in terms of the strategic investments, with price being down slightly.

Megan Clapp: Hi, good morning. Thanks so much. Maybe to follow up there, Tucker, just on Uncrustables, in terms of the strategic investments with price being down slightly. I believe you took a price increase on the brand. I think it was for the first time in three years last year. Just in the context of that, can you maybe just unpack a bit more about where those investments are focused specifically? Thank you.

Speaker #6: I believe you took a price increase on the brand—I think it was for the first time in three years last year. So, just in the context of that, can you maybe unpack a bit more about where those investments are focused, specifically?

Speaker #6: Thank you.

Speaker #5: Yeah, Megan, over time we've talked about the importance of advancing the volume growth momentum of the portfolio, both in traditional retail and away from home.

Tucker Marshall: Megan, over time, we've talked about the importance of advancing the volume growth momentum of the portfolio, both in traditional retail and away-from-home. We're doing that through base distribution, we're doing that through innovation, and at times, we're also doing that through pricing as well. Pricing is not only strategic, but it's also to recover some inflation as well. As we move forward, the important thing for us, and we've talked about this on the last couple of earnings calls over the last few fiscal years, is just to acknowledge that we need to continue to make sure that we have the right price and promotion, i.e. merchandising. We need to make sure that we advance marketing behind the brand, and we will continue to absorb ongoing manufacturing costs as we bring on additional capacity to support the future growth.

Speaker #5: And we're doing that through base distribution. We're doing that through innovation. And at times, we're also doing that through pricing as well. Pricing is not only strategic, but it's also to recover some inflation as well.

Speaker #5: And so as we move forward, the important thing for us and we've talked about this on the last couple of earnings calls over the last, few fiscal years is just to acknowledge that we need to continue to make sure that we have the right price and promotion i.e. merchandising we need to make sure that we advance marketing behind the brand.

Speaker #5: And we will continue to absorb ongoing manufacturing costs as we bring on additional capacity to support future growth. And so, this fiscal year is really just a demonstration of now growing off the $1 billion mark, where we’re seeing nice volume momentum, but we will strategically make the right decisions around pricing to support the brand and its growth and overall momentum in the portfolio.

Tucker Marshall: This fiscal year is really just a demonstration of now growing off the billion-dollar mark, where we are seeing nice volume momentum, but we will strategically make the right decisions around pricing to support the brand and its growth and overall momentum in the portfolio.

Speaker #6: Great. That's helpful. And then maybe a follow-up on, on tariffs. In the prepared remarks or in the, the release you mentioned that the outlook does not assume any impact from tariff refunds at this point.

Megan Clapp: Great. That's helpful. Maybe a follow-up on tariffs. In the prepared remarks or in the release, you mentioned that the outlook does not assume any impact from tariff refunds at this point. Could you just maybe give any guardrails around the potential opportunity there? Have you applied for refunds? I think it depends on whether you are the direct importer of record or not. Just help us understand anything in terms of timing or magnitude that you could share. If refunds were to materialize, would you expect that could flow through to the bottom line, or would you be more inclined to reinvest some of that? Thank you.

Speaker #6: Could you just maybe give any guardrails around the potential opportunity there? Have you applied for refunds? I think it depends on whether you're the direct importer of record or not.

Speaker #6: And just help us understand, you know, anything in terms of timing or magnitude that you could share. And if refunds were to materialize, would you expect, you know, that could flow through to the bottom line, or would you be more inclined to reinvest some of that?

Speaker #6: Thank you.

Speaker #5: Yeah. Megan, big picture, I would acknowledge that we experienced tariffs in FY26 and we continue to experience tariffs at the 10% level in our FY27 outlook.

Tucker Marshall: Yeah, Megan, big picture, I would acknowledge that we experienced tariffs in FY 2026, and we continue to experience tariffs at the 10% level in our FY 2027 outlook. We are pursuing tariff refunds previously paid. Honestly, the scope and realization remains uncertain, and we have just made the decision not to factor any of these decisions into our outlook, and we are continuing to monitor and assess any changes to existing tariffs or new tariffs, and we will continue to provide updates over time. I think at this point in time, for us to make any declarations is probably not appropriate, just as we navigate the overall environment.

Speaker #5: We are pursuing tariff refunds. previously paid. but you know, honestly, the scope and realization remains uncertain. And we've just made the decision not to factor any of these decisions into our outlook.

Speaker #5: And we're continuing to monitor and assess any changes to existing tariffs or new tariffs, and we'll continue to provide updates over time. But I think at this point in time, for us to make any declarations is probably not appropriate, just as we navigate the overall environment.

Speaker #6: Fair enough. Thank you.

Megan Clapp: Fair enough. Thank you.

Speaker #4: Thank you. Next question is coming from Scott Marks from Jeffrey. Your line is now live.

Operator: Thank you. Next question is coming from Scott Marks from Jefferies. Your line is now live.

Speaker #7: Hey, good morning, all. Thanks very much for taking our questions. The first thing I wanted to ask about—just in the quarter, as we think about both the frozen handheld segment and the pet segment profitability—I think they came in materially ahead of what folks were expecting.

Scott Marks: Hey, good morning, all. Thanks very much for taking our questions. First thing I wanted to ask about, just in the quarter, as we think about both the Frozen Handheld segment and the Pet segment profitability, I think they came in materially ahead of what folks were expecting. Just wondering if you can help us understand the drivers of that and maybe quantify magnitude of contribution from those drivers.

Speaker #7: Just wondering if you can help us understand the drivers of that and, and maybe quantify magnitude of, of contribution from those drivers.

Speaker #5: Yeah. We, we had roughly a, a 15-cent sort of over-delivery expectations in our fourth quarter of, of, of last fiscal year. And I would say we saw some volume benefit we saw a little bit of an improvement in our gross profit margin and then we worked to control our SDNA expenses in, in the quarter.

Tucker Marshall: Yeah. We had roughly a $0.15 sort of over-delivery to expectations in our Q4 of last fiscal year. I would say we saw some volume benefit. We saw a little bit of an improvement in our gross profit margin, then we worked to control our SG&A expenses in the quarter. What we saw in the Q4 on Frozen Handheld and Spreads was just nice momentum across our Uncrustables portfolio as we continue to support and advance that brand. Pet came in nicely just due to the underlying momentum in Meow Mix, seeing some signs of stability in snacks, also acknowledging, too, their ability to control costs in the quarter as well. I just think those elements enabled us to finish a strong fiscal year and carry that momentum into our current fiscal year as we announced our guidance today.

Speaker #5: What we saw in the fourth quarter on frozen handheld and spreads was just nice momentum across our uncrustables portfolio. As we continue to support and advance that brand, and pet came in nicely just due to the underlying momentum in meow mix.

Speaker #5: Seeing some signs of stability in snacks but also acknowledging too their ability to control costs in the quarter as well. And I just think those, those elements enabled us to finish a strong fiscal year and carry that momentum into our current fiscal year as we announced our guidance today.

Speaker #7: Okay. Appreciate the color there. And then just second one from me. I know you gave some commentary around Q1 expectations as well as expectations for the coffee segment, kind of, kind of top-line cadence through the year.

Scott Marks: Okay. Appreciate the color there. Then, just second one from me. I know you gave some commentary around Q1 expectations as well as expectations for the coffee segment, kind of top-line cadence through the year. As we look maybe through the rest of the business, the other segments, marketing spend, SG&A, how should we be thinking about cadence as we progress through FY27?

Speaker #7: As we look maybe through the rest of the business, the other segments, you know, marketing spend, SDNA, how should we be thinking about cadence as we, as we progress through fiscal '27?

Speaker #5: Yeah. So as you as you think about earnings per share, we, we talked about a kind of a mid-teens Q1. I would just acknowledge that our second quarter will be better than mid-teens.

Tucker Marshall: Yeah. As you think about earnings per share, we talked about a kind of a mid-teens Q1. I would just acknowledge that our Q2 will be better than mid-teens, and our Q3 would be sort of low single digits, and our Q4 would be flat to slightly down as you think about the flow over the year. Again, that will change directionally because we're not trying to articulate quarterly guidance, we understand that you kind of have to model the outlook. Hopefully that provides some context, and we're certainly happy to follow up with you post-call here.

Speaker #5: And then our third quarter would be sort of low single digits, and then our fourth quarter would be flat to slightly down, as you think about the flow over the year.

Speaker #5: And again, that will change directionally, because we're not trying to sort of articulate quarterly guidance, but we understand that you kind of have to model the outlook.

Speaker #5: So hopefully that provides some, some context. And we're certainly happy to, to follow up with you post-call here.

Speaker #7: Okay, appreciate it. We'll pass it on.

Scott Marks: Okay. Appreciate it. We'll pass it on.

Speaker #4: Thank you. Next question is coming from Rob Dickerson from BTIG. Your line is now live.

Operator: Thank you. Next question is coming from Rob Dickerson from BTIG. Your line is now live.

Speaker #8: Great, thanks so much. Excuse me, just to circle back on coffee, I guess, one more time. You know, Tucker, just given all the comments you've already made on the call today, it's a very easy clarification question.

Rob Dickerson: Great. Thanks so much. Excuse me. Just to circle back on coffee, I guess, one more time. Tucker, just given all the comments you've already made on the call today, it's a very easy clarification question. I know you had stated in the prepared remarks that retail coffee will return to the high 20s in fiscal year '27. Clearly it sounds like the real benefit starts to come through in Q2. I'm assuming the assumption here is that Q1 is a little bit more muted, and really that benefit in high 20s is really a Q2 to Q4 event. Is that fair?

Speaker #8: I know you stated in the prepared remarks that retail coffee will return to the high 20s in fiscal year '27, but clearly it sounds like the real benefit starts to come through in Q2.

Speaker #8: So I'm assuming the assumption here is that Q1's a little bit more muted, and then really, that benefit in the high 20s is really like a Q2 to Q4 event.

Speaker #8: Is that, that fair?

Speaker #5: You are correct.

Tucker Marshall: You are correct

Speaker #8: All right. Simple enough. All right. And then just just I guess just to kind of touch on capital structure, kind of where you stand.

Rob Dickerson: All right. Simple enough. All right. Then I guess just to touch on capital structure, where you stand. Haven't talked about it yet in the call. Did almost $1.2 billion in free cash flow in 2026, which was great, almost company high. Now we're looking for, I guess, around $1 billion in fiscal 2027, inclusive of probably some of the inventory benefits, especially on coffee. You just paid down, I think, $500 million or so in debt in the back half of the year in 2026. So as we think about any real capital needs in 2027, vis-a-vis the free cash flow, are we at a point now where maybe you feel pretty good about your leverage? You don't have as much of a de-leverage need, and I know you called out the guidance excludes any type of share repurchase.

Speaker #8: We haven't talked about it yet on the call. You know, we did almost $1.2 billion in free cash flow in '26, which was great—almost a company high.

Speaker #8: Now we're looking for, I guess, around $1 billion in fiscal '27, you know, inclusive of probably some of the inventory benefits, especially on coffee.

Speaker #8: and you just paid down, I think, 500 million or so in debt in the back half of the year in '26. So kind of like, you know, as we think about any capital real capital needs in '27 kind of vis-à-vis the free cash flow, like, is this you know, are, are we at a point now where maybe you feel pretty good about your leverage?

Speaker #8: You don't have as much of a lever, a de-leverage need. And I know you kind of called out, you know, the guidance excludes any type of share repurchase.

Speaker #8: So, just trying to get a view as to kind of where you would like to place any of the excess capital, and how that relates to where the current stock price is.

Rob Dickerson: Just trying to get a view as to where you would like to place any of the excess capital, and how that relates to where the current stock price is. Thanks a lot.

Speaker #8: Thanks a lot.

Speaker #5: Yeah, Rob. you know, we've remained committed to our financial priorities and policies. And to generating a billion dollars or greater in free cash flow in support of our, you know, cash deployment model.

Tucker Marshall: Yeah, Rob. We remain committed to our financial priorities and policies and to generating $1 billion or greater in free cash flow in support of our cash deployment model. As you noted in fiscal 2026, we had $1.2 billion of free cash flow. That benefit enabled us to pay down over $700 million of debt and pay just over $450 million of dividends. As we move forward, we remain committed to free cash flow generation after capital expenditures, which are roughly flat year-over-year at $325 million. We want to make sure that we support the quarterly dividends and grow it where and when appropriate. We also acknowledge, too, that we want to pay down an additional $500 million of debt, because that'll support getting down to around a 3 times leverage profile by the end of this fiscal year.

Speaker #5: And as you noted in fiscal '26, you know, we had a billion two of free cash flow. That benefit enabled us to pay down over 700 million dollars of debt and pay just over 450 million dollars of dividends.

Speaker #5: So as we move forward, we remain committed to free cash flow generation after capital expenditures which are roughly flat year over year, 325 million dollars.

Speaker #5: We wanna make sure that we support the quarterly dividends. And grow it where and when appropriate. We also acknowledge too that we wanna pay down an additional 500 million dollars of debt because that'll support getting down to around a three-times leverage profile by the end of this fiscal year.

Speaker #5: And as a reminder, we exited this past fiscal year around 3.8 times. As we begin to achieve our leverage objectives, that opens up additional opportunities for capital or cash deployment.

Tucker Marshall: As a reminder, we exited this past fiscal year around 3.8 times. As we begin to achieve our leverage objectives, that opens up additional opportunity for capital or cash deployment, where we could contemplate potential share repurchases in the future.

Speaker #5: where we could contemplate potential share repurchases in the future.

Speaker #4: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mark for any further closing comments.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mark for any further closing comments.

Speaker #2: Thank you. And thank you all for joining us this morning. As we shared in our prepared remarks, our fiscal year 2026 results highlight the strength of our focused strategy and portfolio optimization efforts.

Mark Smucker: Thank you. Thank you all for joining us this morning. As we shared in our prepared remarks, our fiscal year 2026 results highlight the strength of our focused strategy and portfolio optimization efforts, and our differentiated portfolio is delivering results. We are pleased with the momentum of our portfolio as we enter fiscal year 2027. Our focus is on our three strategic priorities of driving focused organic volume growth across our key platforms, improving profitability, and accelerating earnings growth for the company and maintaining a disciplined approach to capital deployment. Our strategy is working, and the strong foundation we have established gives us confidence in our ability to increase shareholder value and deliver long-term growth for the company. In closing, I would like to thank our employees for their unwavering focus, dedication, and outstanding contributions. Their efforts continue to drive our momentum and position us for future success.

Speaker #2: And our differentiated portfolio is delivering results. We are pleased with the momentum of our portfolio as we enter fiscal year '27. Our focus is on our three strategic priorities of driving focused organic volume growth across our key platforms, improving profitability and accelerating earnings growth for the company, and maintaining a disciplined approach to capital deployment.

Speaker #2: Our strategy is working, and the strong foundation we have established gives us confidence in our ability to increase shareholder value and deliver long-term growth for the company.

Speaker #2: In closing, I would like to thank our employees for their unwavering focus, dedication, and outstanding contributions. Their efforts continue to drive our momentum and position us for future success.

Speaker #2: Have a great day.

Mark Smucker: Have a great day.

Operator: Everyone, this concludes our conference call for today. Thank you all for participating, and have a nice day. All parties may now disconnect.

Q4 2026 J M Smucker Co Earnings Call

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