AI Takeaway
SJM (The J.M. Smucker Company) returned to operating profitability in FY2026 with operating income of $360.2M (vs. a loss of $673.9M prior year), but still posted a net loss of $138.7M amid rising cost of revenue (+12.6%) and a compressed gross margin, while generating strong operating cash flow of $1.47B.
Cost of Revenue
$6.02B
++12.64% YoY
EPS (Basic)
$-1.30
++88.76% YoY
Operating Income
$360.2M
++153.45% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
SJM swung to a positive operating income of $360.2M in FY2026 from a loss of $673.9M in FY2025, a 153.5% improvement, suggesting significant one-time charges or impairments weighed on the prior year and did not recur at the same scale.
Source: Source: 10-K Income Statement Data
Gross profit declined 10.3% YoY to $3.03B despite higher revenues, as cost of revenue surged 12.6% to $6.02B, indicating meaningful input cost inflation or unfavorable product mix pressuring profitability at the gross level.
Source: Source: 10-K Income Statement Data
SG&A expenses were reduced by 2.1% YoY to $1.50B, reflecting management's focus on cost control even as top-line cost pressures mounted, partially offsetting gross margin headwinds.
Source: Source: 10-K Income Statement Data
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Upgrade to unlockSJM carries $6.54B in long-term debt against stockholders' equity of $5.54B, yielding a debt-to-equity ratio of ~1.93x. The current ratio of 0.78 indicates current liabilities ($2.54B) exceed current assets ($1.97B), signaling potential short-term liquidity stress. Sustained high leverage limits financial flexibility and increases vulnerability to interest rate changes.
Source: Source: 10-K Balance Sheet Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.77 versus the $2.66 analyst consensus — a +4.0% beat for FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Cost of Revenue | $6.02B | $5.34B | +12.64% |
Gross Profit | $3.03B | $3.38B | -10.35% |
Operating Income | $360.2M | $-673.9M | +153.45% |
Net Income | $-138.7M | $-1.23B | +88.73% |
EPS (Basic) | $-1.30 | $-11.57 | +88.76% |
EPS (Diluted) | $-1.30 | $-11.57 | +88.76% |
SG&A Expense | $1.5B | $1.53B | -2.12% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $16.22B | $17.56B | -7.65% |
Current Assets | $1.97B | $2.15B | -8.08% |
Total Liabilities | $10.68B | $11.48B | -7.01% |
Current Liabilities | $2.54B | $2.65B | -4.29% |
Stockholders' Equity | $5.54B | $6.08B | -8.86% |
Long-Term Debt | $6.54B | $7.04B | -7.02% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.47B | $1.21B | +21.74% |
Investing Cash Flow | $-258.8M | $-100.3M | -158.03% |
Financing Cash Flow | $-1.23B | $-1.1B | -11.23% |
Share Buybacks | $5.6M | $3.3M | +69.70% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | -2.5% | — | — |
ROA | -0.9% | — | — |
Current Ratio | $0.777 | — | — |
Debt to Equity | $1.926 | — | — |
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SJM reported a net loss of $138.7M in FY2026, or -$1.30 per share, which is a significant improvement from the prior year's net loss of $1.23B (-$11.57 per share). While the company returned to positive operating income of $360.2M, heavy interest costs on its $6.54B long-term debt prevented a return to full net profitability.
The key takeaways from SJM's FY2026 10-K are: operating income recovered strongly to $360.2M from a prior-year loss of $673.9M; gross profit fell 10.3% due to a 12.6% surge in cost of revenue; and operating cash flow grew 21.7% to $1.47B. The company also made progress reducing long-term debt by 7.0% to $6.54B, though the current ratio of 0.78 signals short-term liquidity tightness.
SJM's gross margin deteriorated in FY2026, with gross profit declining 10.3% YoY to $3.03B even as cost of revenue surged 12.6% to $6.02B. This compression reflects significant input cost inflation or unfavorable mix shifts that outpaced the company's ability to raise prices or cut production costs.
Based on the financial data, SJM's key risks include elevated leverage with a debt-to-equity ratio of ~1.93x and a current ratio below 1.0 (0.78), indicating potential liquidity pressure. Gross margin compression from rising input costs and persistent net losses despite operational improvement also represent significant ongoing risks to the company's financial health.
SJM generated $1.47B in operating cash flow in FY2026, up 21.7% YoY, which provides meaningful capacity to service its $6.54B long-term debt. The company used $1.23B in financing activities (which likely includes debt repayment and dividends), and long-term debt declined by approximately $494M YoY, suggesting active deleveraging progress.