Shares of packaged food and beverage giant J.M. Smucker (NYSE: SJM) were down 13% this week as of 2:30 p.m. ET Thursday, according to data provided by S&P Global Market Intelligence.
Smucker reported dismal fiscal fourth-quarter earnings, with sales and adjusted earnings per share falling 3% and 13%.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Making matters worse, the company took another $980 million impairment charge on its $5.6 billion Hostess Brands acquisition, bringing the total amount written down to $2 billion.
While this charge doesn’t mean Smucker “lost” that money in Q4, it acts more as an admission that it dramatically overpaid for the Twinkie maker two years ago.
J.M. Smucker: Turnaround story or falling knife?
When you look at J.M. Smucker’s brands, there’s a lot to like:
-
Folgers, Cafe Bustelo, and Dunkin
-
MeowMix, Milk Bone, and Pupperoni
-
Uncrustables, Jif, and Smuckers jelly
-
Twinkies, Donettes, and Ho-Hos
In fact, thanks to its collection of popular brands, Smucker estimates that roughly 90% of U.S. households already buy its products. However, that widespread adoption is also part of the problem now facing the company — minimal growth.
Image source: Getty Images.
While Smucker grew sales by 4% annually over the last decade, this figure dipped to 1% since 2020 — and Q4’s results only made things worse.
This slowdown undoubtedly contributed to the company’s questionable acquisition of Hostess for a precipitous 30 times after-tax earnings.
Now, Smucker holds $7.3 billion in debt versus a market capitalization of $10.2 billion, meaning the company will likely focus on paying down debt and streamlining its operations, rather than delivering any significant sales growth.
Though Smucker consistently generates positive free cash flow (FCF) — and its 4.5% dividend yield only uses 56% of its FCF — investors may want to wait for signs of improvement before jumping in.
Should you invest $1,000 in J.M. Smucker right now?
Before you buy stock in J.M. Smucker, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and J.M. Smucker wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $875,479!*
Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
Josh Kohn-Lindquist 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.
