Aug 26, 2026 earnings call — Tariff refund, Uncrustables growth, and capital plans
Received an $0.84 tariff refund in fiscal Q1 and will reinvest some and use remaining cash to pay down debt.
Revenue $2.2B (est $2.1B) · EPS $3.24 (est $2.22)
Key quotes
"So having not crossed key thresholds, we won't take a list price decline at this point."
"We now expect sort of high single-digit growth for the Uncrustables brand, total company, total venture."
"So we are on the journey to pay down about $500 million of debt this year and achieve the 3x leverage ratio, which candidly we did in this first quarter."
Analyst Q&A 13
Tariff refund use and coffee outlook
Q (Andrew Lazar · Barclays): Analyst asked how the $0.24 difference in SG&A breaks down — admin hire for McCalla versus brand spend — and why management still expects coffee volumes to fall for the year despite recent increases.
A: Management said they received an $0.84 tariff refund in the quarter and are reinvesting part of it into SG&A, mainly administrative expense, some marketing, and preproduction for the McCalla, Alabama facility, while using remaining cash to pay down debt. They also said coffee is volatile and they are taking a prudent view on future coffee volumes despite good recent brand results.
"Andrew, yes, we did receive an $0.84 benefit from tariff refunds in our first quarter, and we are choosing to reinvest a portion of that in SG&A expenses," — Tucker Marshall (CFO)
Coffee pricing and share repurchase flexibility
Q (Peter Galbo · BofA): Analyst asked how recent coffee price moves affected the decision to pause a list-price cut and whether the company plans share repurchases now that leverage improved.
A: They said commodity is down versus last year but key price thresholds and sustained deflation have not been met, so they will not take a list price decline now and instead pass some deflation to consumers via trade/promotions while watching the crop. On capital allocation, they said they remain committed to a balanced model, are paying down about $500 million of debt to reach a 3x leverage target, keep the dividend, and can now contemplate share repurchases.
"we have not crossed key thresholds that would actually justify nor have we seen sustained deflation at this point." — Mark Smucker (CEO·CHAIR)
Cost inflation drivers and margins
Q (Thomas Palmer · JPMorgan): Analyst asked whether the higher COGS inflation is mostly from coffee or from other costs like freight, and how sustainable recent Frozen Handheld margins are and when McCalla preproduction costs will affect margins.
A: They said underlying COGS inflation is mid-single-digit when isolating green coffee tariffs and refunds, and that the increase versus initial expectations is largely driven by freight and some commodity and other ingredients and is reflected in guidance. On Frozen Handheld and Uncrustables, they said the quarter showed strong top-line momentum and profitability, they will keep investing in marketing and production, but margin may take a slight step back in coming quarters due to increased preproduction costs for McCalla.
"Yes. We are experiencing mid-single-digit inflation as you isolate the effects of green coffee tariffs and tariff refunds." — Tucker Marshall (CFO)
Dog snacks performance and trouble spots
Q (Robert Moskow · TD Cowen): Analyst asked how management is managing the challenged dog snacks business, whether tail brands like Pup-Peroni were a drag, and what actions are being taken.
A: They said the dog snacks quarter was strong, with Pup-Peroni and Milk-Bone performing well after brand resets, sharper marketing, innovation, and customer events; they plan to stabilize the biscuit segment with messaging on enjoyment and functional benefits. They also noted Jerky Treats was down.
"Pup-Peroni was up 5% in net sales and 7%." — Mark Smucker (CEO·CHAIR)
Q2 outlook and Sweet Baked Snacks
Q (Christopher Carey · Wells Fargo): Analyst asked whether the expected Q2 reversal is mainly from coffee and whether Sweet Baked Snacks (Hostess) is getting worse or roughly in line with expectations.
A: They said there is momentum heading into Q2 but they are being prudent on coffee volume assumptions and reversing a contemplated list price decline while using promotions to hit price points. On Hostess, performance was essentially where they expected as they work on stabilization, with Donettes and some innovations performing well, while convenience channel traffic remains challenged.
"The performance on Hostess in the quarter was essentially right where we expected it to be." — Mark Smucker (CEO·CHAIR)
Coffee value marketing and pet capital focus
Q (Nik Modi · RBC): Analyst asked if there is a marketing opportunity to emphasize value to win lower- and middle-income coffee drinkers, and whether the company would consider allocating capital to pet devices/apps.
A: They agreed there is a value opportunity, noting over 70% of cups are consumed at home and their portfolio meets various value points, and cited Folgers' strong affordable-SKU performance around America 250. Strategically, they said they will prioritize consumables (dog snacks and cat food) over devices, though they remain open-minded.
"I would note Folgers being one of our more affordable brands had some great performance around America 250." — Mark Smucker (CEO·CHAIR)
Incremental spend on top brands
Q (David Palmer · Evercore): Analyst asked what types of spending are being made on Uncrustables, dog treats and peanut butter, and whether there's a cadence for improvement in dog treats and peanut butter next year.
A: They said they are disciplined and use tools to measure ROI, and with a new CMO they will be choiceful with dollars to get meaningful returns. They reiterated plans to build Milk-Bone's relevance, lead in spreads (peanut butter and fruit), keep innovating and increasing Uncrustables capacity to support ongoing demand.
"It's going to demonstrate another year of growth." — Tucker Marshall (CFO)
Uncrustables fridge conversion and Folgers moves
Q (Max Andrew Gumport · BNP Paribas): Analyst asked how retailers and consumers are responding to the fridge-friendly Uncrustables and how recent Folgers retail pricing/promotional patterns should be read.
A: They said Uncrustables fundamentals are right: new marketing, fridge-friendly format (can be stored 5 days), right price-pack architecture, new flavors and daypart offerings, stronger distribution and Away From Home gains, and progress in c-store. On Folgers, they said they are using promotions to pass through deflation while monitoring the full-year commodity picture and staying prudent on volume assumptions.
"So obviously, you can keep the Uncrustables stored in your fridge for 5 days." — Mark Smucker (CEO·CHAIR)
C-store traffic and peanut butter trends
Q (Peter Grom · UBS): Analyst asked how much Sweet Baked Snacks weakness is due to C-store traffic versus lapping SKU rationalization, and requested details on peanut butter category and Jif actions.
A: They said C-store traffic weakness appears persistent and gas prices may be part of the dynamic, so improvement depends partly on changes at the pump. They expect the Sweet Baked Snacks full-year top line to be down low single digits as lapping last year's SKU rationalization affects the first half, and for peanut butter they are confident, have refreshed Jif packaging, launched new marketing and Jif Simply, and plan a multi-year fruit spreads refresh.
"And with respect to the top line, on a full year basis, we're probably advancing that business to being down low single digits, and that was as expected, as anticipated." — Tucker Marshall (CFO)
Transformation office and McCalla timing
Q (Stephen Robert Powers · Deutsche Bank): Analyst asked for an update on productivity benefits from the transformation office and whether demand or financial flexibility drove accelerating Phase 2 of McCalla.
A: They said the transformation office continues to deliver cost, productivity and advanced ways of working that help earnings, offset inflation and support reinvestment, and Rob will continue to lead those efforts with updates over time. On Uncrustables, they increased the outlook to high single digits driven largely by U.S. retail and improving Away From Home, and they advanced some preproduction expenses to start up McCalla capacity earlier.
"Steve, we continue to see benefits from our transformation office." — Tucker Marshall (CFO)
Marketing timing and Uncrustables size question
Q (Scott Marks · Jefferies): Analyst asked why Frozen Handheld and Spreads had lower marketing in the quarter and how incremental marketing will be allocated, and also asked how big Uncrustables could get and how long mid-to-high single-digit growth might continue.
A: They said the quarter had a bit lower marketing in Frozen Handheld and Spreads largely due to Jif timing but they remain committed to full-year marketing spend; incremental spend will support brands like Uncrustables. On Uncrustables' future size, they declined to give projections beyond $1 billion now and said they are focused on continuing to invest and deliver growth before making further projections.
"In the quarter, Frozen Handheld and Spreads has a little bit of lower marketing spend." — Tucker Marshall (CFO)
Café Bustelo expansion and key risks
Q (Alexia Howard · Bernstein): Analyst asked whether Café Bustelo still has distribution opportunities given regional concentration and whether the strong growth can continue, and asked for top upside/downside factors for the rest of fiscal '27.
A: They said Bustelo has been consistently strong and has a lot of runway, with distribution expansion in Central and Western regions, new roast profiles and ready-to-drink options, and strong appeal with younger consumers aided by marketing campaigns. For risks and opportunities, they said upside would be better-than-expected coffee and frozen handheld momentum and pet improvements, while downside could come from consumer reactions to the environment and ongoing cost inflation.
"We continue to expand the brand in Central and Western regions." — Mark Smucker (CEO·CHAIR)
McCalla scope and seasonal activations
Q (Rob Dickerson · U.S. Bancorp): Analyst asked if the new Alabama facility only adds standard Uncrustables capacity or if it enables new product variations, and whether there are any back-to-school or holiday activations to note.
A: They said the phase is a second phase of the Alabama facility that is already built and needs staffing and activation, and it is focused on their core crimped, soft-bread Uncrustables format. They also said they will take advantage of key promotional periods and holiday activations as they come to market but had nothing specific to announce now.
"But it is focused on base -- our core format of crimped, soft bread, Uncrustables." — Mark Smucker (CEO·CHAIR)