J.M Smucker earnings: Stock will be in 'penalty box' for a while
The J.M. Smucker Company (SJM) — which owns consumer brands like Jif peanut butter, Uncrustables, Hostess, Folgers coffee, and Milk-Bone dog treats — is seeing shares drop Tuesday morning after disappointing investors on its fiscal full-year 2026 guidance. The snack brand reported mixed fiscal fourth quarter 2025 results, topping earnings estimates and falling the slightest bit short of revenue forecasts.
TD Cowen managing director Robert Moskow comes on Catalysts to talk about his takeaways from the earnings release and earnings call.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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3 Reasons Why This Dirt Cheap High-Yield Dividend Stock Is a Buy for the Second Half of 2025
Packaged food companies are in an industry-wide downturn. J.M. Smucker continues to generate excellent free cash flow to support its growing dividend. The stock's valuation is beyond cheap. 10 stocks we like better than J.M. Smucker › J.M. Smucker's (NYSE: SJM) stock price tumbled 15.6% on Tuesday after the packaged food giant reported fourth-quarter fiscal 2025 results and updated its fiscal 2026 guidance. The stock price of the maker of Uncrustables, Folgers, Jif peanut butter, Twinkies, pet brand Milk-Bone, and other products is now hovering around its lowest level in over a decade. Here are three reasons why the sell-off has made J.M. Smucker too cheap to ignore, and why the high-yield dividend stock is a great buy for the second half of 2025. Net sales fell 3% year over year in J.M. Smucker's Q4 but were still up a solid 7% for the full fiscal year. Adjusted earnings per share (EPS) rose 2% to $10.12. For fiscal 2026, the company expects net sales to increase by 2% to 4%, but adjusted EPS to fall to $8.50 to $9.50. The stock is likely taking a hit because earnings are sliding, and it remains to be seen if the company will be able to pass along cost pressures to consumers. For example, coffee net sales rose 11% in the company's latest quarter, but that was heavily due to price increases from June and October of last year. J.M. Smucker is dealing with record-high green (unroasted) coffee production costs. So it plans to hike prices again in May and stage yet another price increase in August. J.M. Smucker said it will be able to offset higher costs if the price increases work. But if customers push back on these price hikes, then sales volumes would decline, affecting profitability. However, the company believes that its at-home coffee brands will appeal to people looking for affordable experiences outside of coffee shops. Price increases are happening across the company's portfolio. J.M. Smucker just increased prices on its popular Uncrustables sandwiches for the first time in over three years, as net sales in its Frozen Handheld and Spreads segment ground to a halt. For pet foods, the company is seeing good results from its Meow Mix cat brand, but weakness from dog brand Milk-Bone as consumers pull back on discretionary spending -- like on dog treats. Sweet Baked Snacks continues to be one of the worst performers for J.M. Smucker, dragged down by Hostess. J.M. Smucker bought Hostess Brands in November 2023 for $5.6 billion -- which, in hindsight, was not a good use of capital. For context, J.M. Smucker's market cap has fallen to just $10.05 billion -- and Hostess is not even close to being worth half of the company. In J.M. Smucker's latest quarter, Sweet Baked Sales was the company's smallest segment by revenue, generating roughly 12% of total net sales. The segment had by far the worst comparable results, with net sales down 26% year over year. Longer term, J.M. Smucker expects the Sweet Baked Snacks segment to achieve just 3% net sales growth per year. J.M. Smucker generated $816.6 million in free cash flow (FCF) in fiscal 2025, which was plenty to cover $455.4 million in dividend payments. For fiscal 2026, management expects even higher FCF of $875 million, which is roughly double its dividend. On the earnings call, management said that it is confident in the company's ability to deliver $1 billion in annual FCF over the long term. Despite lackluster results, J.M. Smucker maintains a cash flow that can support its growing dividend. The company has raised its dividend for 29 consecutive years, making it a reliable source of passive income. Its yield has ballooned to 4.6% due to the sell-off in the stock and continuous dividend raises. Typically, when a company's yield jumps, it can be a red flag that its dividend is becoming unaffordable. But that's not the case with J.M. Smucker. 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Investors can also appreciate that the company is foreshadowing price increases to offset costs, rather than surprising them later in the fiscal year. There are valid reasons for the stock's pullback, but J.M. Smucker is simply too beaten down for a company that continues to generate tons of FCF and can afford to grow its dividend. Investors are getting an opportunity to scoop up shares of this high-yield dividend stock at a bargain level, making it a great buy for the second half of 2025. Before you buy stock in J.M. Smucker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and J.M. Smucker wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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