J.M. Smucker sees taking additional coffee pricing actions in early winter

Asked on the company’s earnings call about the company having previously mentioned that the pricing would benefit coffee segment sales by about 20% for FY26, CEO Mark Smucker replied that the current outlook for pricing in the coffee segment is “going to be in the mid-20s now.” Smucker added: “That would include additional pricing actions in the early winter associated with the increased tariff rates that we’re experiencing on green coffee. And then furthermore, we would likely see an impact to volume in the low to mid teens, therefore, having kind of a low to mid teens overall growth for the segment year over year.” The CEO went on to say: “our outlook for the full year has not changed at the midpoint. We still have a $9 midpoint guidance range. We do see favorability coming through our fiscal year as a result of better than anticipated price elasticity of demand assumptions through our coffee portfolio. But that benefit is being offset by increased tariffs that we’re experiencing since our original guidance. And then to your point, in our first quarter, we did experience some additional coffee costs greater than we anticipated. We always knew that the first quarter was going be our highest coffee cost quarter, came in a little higher than anticipated. The outlook also anticipates that in our second quarter, just due to the timing of our hedging activity along with the physical receipt of green coffee, we’ll have some additional costs in the second quarter that is causing our outlook change for the second quarter. But overall, we do see coffee in line with profit expectations coming into the fiscal year based on where we stand now after absorbing the incremental tariffs.”