Why J.M. Smucker Stock Jumped Today
Key Points
Smucker's profitability strengthened in its most recent quarter.
Shareholders are in line for sizable dividends.
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Shares of J.M. Smucker (NYSE: SJM) rose on Tuesday after the jam and jelly purveyor's profits topped Wall Street's forecast.
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Price hikes drove Smucker's earnings higher
Smucker's net sales grew 6% year over year to $2.3 billion in its fiscal 2026 fourth quarter, which ended on April 30.
Price increases helped offset volume declines in Smucker's spreads and coffee segments, boosting the company's profit margins.
Smucker's adjusted operating income jumped 14% to $59.7 million, as its margin improved to 21.3% from 19.7% in the prior-year quarter.
In turn, the maker of Jif peanut butter and Folgers coffee saw its adjusted earnings per share surge 20% to $2.77. That bested Wall Street's estimates, which had called for per-share profits of $2.64.
Better still, Smucker's cash generation continued to strengthen. Its free cash flow soared 42% to $1.2 billion in fiscal 2026. That enabled the company to pay $465 in dividends while also paying down $720 million in debt.
A sizable dividend yield for shareowners
Smucker's sees its full-year adjusted earnings per share rising by 7% to 12% to between $9.75 and $10.25 in fiscal 2027.
"Looking ahead, our strategic priorities for the fiscal year are to drive focused organic volume growth across our key platforms, improve profitability and accelerate earnings growth, and maintain a disciplined approach to capital deployment," CEO Mark Smucker said.
Investors can count on that capital deployment to include sizable cash payments to shareholders. Even after today's gains, Smucker's stock yields a solid 3.9%.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends J.M. Smucker. The Motley Fool has a disclosure policy.
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