J.M. Smucker, the parent company of United States (US) coffee home and instant giant Folgers, has reported a below estimate profit forecast for 2025, with inflating coffee prices expected to squeeze the company’s margin.
The updated full-year fiscal 2026 guidance shows J.M. Smucker forecasts a 3.5 to 4.5 per cent net sales increase, revised from a three to five per cent increase previously estimated.
“The Company continues to operate in a dynamic and evolving external environment, including tariffs and related trade impacts, regulatory and policy changes, ongoing input inflation, and changes in consumer behaviours that could impact its fiscal year 2026 outlook,” the company’s Fiscal 2026 Second Quarter Results report reads.
“This updated guidance reflects the Company’s expectations based on its current understanding of these factors.”
The post-earnings shareholder call featured executives stating the company is absorbing the added costs of tariffs and inflation without raising prices in its coffee portfolio, resulting in additional costs of about US$75 million.
These added costs resulted in a decrease of US retail coffee segment profit of US$48.4 million, falling to US$154.3 million from US$848.9 million of net sales.
It also reported a decrease in demand for coffee in its international and away from home segment.
Despite the headwinds, CEO and Chair of the Board Mark Smucker says the overall results from the quarter are largely positive.
“We are pleased with our second quarter results and the positive momentum that we are experiencing in our business,” he says.
“Our top-line growth was driven by ongoing demand for our portfolio of leading brands, and out bottom-line results reflect disciplined cost management and business execution.
“While the overall environment remains dynamic, we continue to navigate successfully what we can control and advance our three strategic priorities of accelerating organic growth, embedding transformation in our every day, and fostering a ‘Be Bold’ mindset.”
