Jun 11, 2025 (MarketLine via COMTEX) --
The decision comes after a price increase in May that has already been implemented in stores.
JM Smucker is set to raise the prices on its coffee products in August, citing inflation in green coffee costs.AA
aEURoeAs we start fiscal year 2026, there is a need to take further pricing actions to recover increasing costs from ongoing green coffee inflation," CEO and chair Mark Smucker said yesterday (10 June) after the US food and drinks group announced its annual results.
JM Smucker's decision comes after a price increase in May that has already been implemented in stores, the Folgers brand owner said.
Mr Smucker added: aEURoeThrough the combination of these two pricing actions, we will recover our anticipated costs for the fiscal year and have contemplated a historical price elasticity of demand impact to volume in our guidance.aEURA
Coffee manufacturers have been facing pressure on commodity costs and seeking to raise prices. In June last year, the DunkinaEUR(TM) and CafA(C) Bustelo maker?implemented a price increase on parts of its portfolio, followed by a second price increase across the entire portfolio in October.AA
In the fourth quarter of JM Smucker's fiscal 2025, a period that ran to the end of April, the company's US Retail Coffee business generated net sales of $738.6m, up 11% year-on-year.AA
The growth was primarily driven by a ten percentage points contribution from "net price realisation", particularly from Folgers and CafA(C) Bustelo.A
JM Smucker said the overall volume/mix of the division was flat, with CafA(C) Bustelo seeing gains and Folgers a decline.AA
The segmentaEUR(TM)s profit stood at $211.2m, almost flat compared with the previous year.AA
However, the segmentaEUR(TM)s profit margin decreased by 300 basis points to 28.6%, highlighting the impact of commodity cost inflation.A
In a note, Bernstein analyst Alexia Howard said coffee aEURoeis seeing unprecedented input cost pressures,aEUR adding it remains uncertain whether historical price elasticities will hold following JM Smucker's multiple price increases since last summer.A
Overall, JM Smucker swung to a net loss of $729m in the fourth quarter of its 2025 fiscal year versus a profit of $245.1m in the year-ago period.A
Non-cash impairment charges of $980m linked to the company's snacks business drove the company to a $599.1m operating loss, contrasting with a $406m operating profit in the corresponding period of the previous year.
Fourth-quarter net sales decreased by 3% to $2.14bn.AA
Adjusted operating income was $422.4m, an 8% decline, with adjusted EPS at $2.31, down from $2.66 in Q4 FY2024.A
For the full year, JM Smucker reported a net loss of $1.23bn, compared to a $744m profit in its 2024/2025 fiscal year.A
Net sales rose 7% to $8.72bn, but the company recorded a $673.9m operating loss, a drop from $1.31bn in operating income in the previous fiscal year.AA
Adjusted operating income increased by 12% to $1.82bn, with adjusted EPS rising to $10.12 from $9.94.A
Looking ahead, JM Smucker expects company-wide net sales to grow 2-4% in fiscal 2026 and anticipates adjusted EPS between $8.50 and $9.50.
Announcing the results, Mr Smucker said: aEURoeAs we look ahead to fiscal year 2026, we remain focused on delivering the business through the strength of our key growth platforms and advancing our strategic priorities. We are confident in our strategy, and we are well-positioned to deliver long-term growth and increase shareholder value.aEUR
He added: "We anticipate total company volume/mix to decline, largely driven by our price elasticity of demand assumptions for coffee and a decline in our sweet baked snacks segment."
Howard said JM SmuckeraEUR(TM)s outlook is aEURoebelow consensus on the bottom line, although sales guidance is better than expected due to price hikes,aEUR particularly in coffee, where another increase is planned for August.A
Looking ahead to the companyaEUR(TM)s 2026 fiscal year, she expressed concern that aEURoepressures on the Hostess brand will continue to play out, particularly once pill versions of GLP-1 drugs are launched in calendar year 2026aEUR.A
Howard also flagged potential pressure on sales from state-level reductions in Supplemental Nutrition Assistance Program funding and ongoing media scrutiny of highly processed foods.
She added: "The other wildcard will be whether or not the favorable priceelasticity in at home coffee consumption continues to hold. So far so good on this front as consumers trade more expensive out of home options for drinking coffee at home but these trends will be worth monitoring in measured channels."
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