J.M. Smucker Co. reported a 71% year-over-year increase in adjusted earnings per share for its fiscal first quarter, driven largely by tariff refunds, while revenue grew 5% and the company raised its full-year guidance.
Adjusted EPS for the quarter ended July 31 rose to $3.24, beating Wall Street estimates of $2.21 by 46.6% and exceeding the prior-year period by 71%. The results included a $0.84 benefit from tariff refunds, contributing to adjusted income before taxes of $457 million. Revenue increased 5% to $2.22 billion, topping forecasts by 3.8%, as adjusted gross profit surged 28% to $950.2 million with margins expanding 760 basis points to 42.8%.
Free cash flow swung to $337.3 million from a negative $94.9 million in the prior-year period, while adjusted operating income rose 46% to $540.7 million, with operating margins improving 690 basis points to 24.4%. Total gross debt declined to $6.74 billion, down from $6.96 billion at fiscal year-end, with approximately $230 million paid down during the quarter. Net debt-to-EBITDA improved to 2.9 times from 3.8 times.
Segment performance showed strong growth in U.S. retail coffee, where net sales rose 13% to $807.8 million and segment profit surged 124% to $300 million, driven primarily by tariff refunds. The U.S. retail frozen handheld and spreads segment grew 3% to $499.3 million, with Uncrustables brand volume hitting a record quarter. Sweet baked snacks sales declined 7%, while pet foods generated $98.9 million in segment profit on $371.7 million in sales.
The company raised its full-year adjusted EPS guidance to a range of $10.50 to $11.00, up from the prior $9.75 to $10.25, incorporating an estimated $0.60 net benefit from tariff refunds. Free cash flow guidance was increased to $1.1 billion from $1.0 billion, while net sales guidance was adjusted to a decline of 1.0% to 2.0%, improved from the prior expectation of a 3.0% to 4.0% decrease. Capital expenditures were maintained at $325 million, supporting capacity expansion for Uncrustables at the McCalla, Alabama facility.
Shares rose 5.99% in premarket trading to $132.96, surpassing the prior 52-week high of $127.64. The company plans to pay down at least $500 million of debt in fiscal 2027 while maintaining dividends and retaining share repurchases as an option.
