The J.M. Smucker Co. encountered a significant first-quarter loss, causing a decrease in share value during Wednesday's midday trading. The loss has been blamed on the Trump administration’s tariffs, which adversely affected the company's coffee division. According to the company, the U.S. retail coffee division, which encompasses Folgers coffee, Dunkin', and Café Bustelo, saw a drastic 22% fall in profits due to higher marketing costs and unfavorable volume/mix. These issues overshadowed the higher prices the company charged for coffee.
Price increases are projected for the early winter time frame, in line with higher tariff rates that the company is currently experiencing. The tariffs, up to 50% imposed by President Donald Trump on some imports from Brazil, one of the world's largest coffee producers, came into force earlier this month.
The first-quarter results for the company were weaker than analysts had forecasted. They reported a GAAP net loss of $0.41 per share, as opposed to the $1.74 earnings per share that was seen during the same period last year. Analysts who took part in a Visible Alpha poll had predicted $1.42. Revenue for the first-quarter fell by 1% year-over-year to $2.11 billion, short of the expected $2.12 billion.
Despite its losses, The J.M. Smucker Co., whose product range also includes pet food and Jif peanut butter, raised its annual sales growth forecast to between 3% and 5%, up from the previous range of 2% to 4%. It also affirmed its adjusted EPS guidance of $8.50 to $9.50 a share. The new outlook reflects an expected sales increase of 3.2% and a $9.24 adjusted EPS for the whole year.
Tariffs and related trade impacts, along with regulatory changes, ongoing input inflation, and changes in consumer behavior, could all potentially influence the company's outlook for the fiscal year 2026. Following this news, Smucker shares saw a 5% drop in intraday trading, despite increasing 3% earlier this year.