ORRVILLE, OHIO — In closing out the fiscal 2025 first half, J.M. Smucker Co. cited robust growth by the Uncrustables brand but continued disappointment with the performance of Hostess.

For the quarter ended Oct. 31, J.M. Smucker posted a loss of $24.5 million, which compared with net income of $194.9 million, equal to $1.90 per share on the common stock, a year earlier. The Orrville, Ohio-based food manufacturer said the quarterly results reflect the divestitures of its Canada condiment business in early January 2024 and the Sahale Snacks business in November 2023, when it also acquired Hostess Brands.

On an adjusted basis, J.M. Smucker had net earnings of $294.2 million, or $2.76 per share, up 11% from $265 million, or $2.59 per share, a year ago. The adjusted earnings per share (EPS) beat Wall Street’s high-end estimate of $2.58.

“Our business momentum continued into the second quarter, building on our positive start to the fiscal year,” said Mark Smucker, chairman, president and chief executive officer.

“We delivered results that exceeded our expectations,” he said. “Our strong comparable net sales and earnings growth were driven by sustained consumer demand for our iconic brands, combined with our continued focus on superior execution and disciplined cost management. While we continue to operate in a dynamic consumer environment, our business remains resilient. And as industry volume growth has remained uncertain, our focused portfolio continues to deliver volume/mix growth, driven by our key growth platforms.”f

That included double-digit sales growth by the Uncrustables frozen handheld sandwich and Café Bustelo coffee brands, while the Hostess sweet baked foods brand continued to lag, said Smucker, who pointed to execution issues and a still-cautious consumer.

“We are not satisfied with the current results of the Hostess brand and are taking the necessary actions to return the brand to growth,” he said.

J.M. Smucker also is “committed to transforming our portfolio for sustained growth,” Smucker said, citing the October sale of the Voortman cookie business to Second Nature Brands, which also had acquired Sahale Snacks. The Voortman transaction is expected to close in the fiscal 2025 third quarter.

“The recently announced divestiture of the Voortman business underscores our strategy of focusing resources on our largest growth opportunities,” he said. “Further, we are ensuring our network is fully optimized to unlock costs, reduce complexity and drive quality.”

Second-quarter net sales surged 17% to $2.27 billion from $1.94 billion a year ago. Excluding current-year net sales from the Hostess purchase, noncomparable net sales in the prior year related to divestitures and a negative impact from foreign exchange, net sales for the quarter rose 2%, J.M. Smucker said.

The comp-sales gain reflects a 2-percentage-point uptick from volume/mix, fueled mainly by growth from the Uncrustables, Café Bustelo, Jif peanut butter and Meow Mix pet food brands, the company said. In addition, the net sales growth includes a 1 percentage point increase from net price realization, driven mostly by higher net pricing for Folgers coffee.

The Sweet Baked Snacks division tallied second-quarter net sales of $315.5 million and operating profit of $70.6 million, down from $333.7 million and $74.4 million, respectively, in the first quarter. J.M. Smucker said it didn’t provide year-over-year comparisons due to reporting differences with the former Hostess Brands Inc. In a 10-Q filing with the Securities and Exchange Commission, Hostess Brands had reported net revenue of $352.8 million and operating income of $43.5 million for its quarter ended Sept. 30, 2023.

“We will continue to deliver innovative products that resonate with consumers, introducing flavors, formats and limited-time offerings that keep the Hostess brand exciting and top-of-mind,” Smucker said. “As part of our wide range of innovation, we are focused on delivering value to consumers by launching new sharing sizes of our Donettes branded products, and also launching $1 packs of our core donut and cake products that will be sold on display.”

Meanwhile, the US Retail Frozen Handheld and Spreads segment saw second-quarter net sales rise 5% to $485.2 million, with results up 6% excluding the Sahale divestiture. Volume/mix lifted sales by 8 percentage points, driven primarily by the Uncrustables and Jif brands, while net price realization had a 2-percentage-point negative impact on sales due to higher Uncrustables trade spend.

Uncrustables posted 16% net sales growth in the quarter, Smucker said.

“This growth was driven by our national advertising campaign, distribution gains and new merchandising investments to drive trial and awareness,” he said. “These actions delivered a record quarter for both sales and household penetration.”

The division’s operating income fell 10% to $116.1 million, impacted in part by pre-production expenses for a new Uncrustables manufacturing facility that opened earlier this month in McCalla, Ala.

“To fuel continued growth and meet demand for the Uncrustables brand, we successfully started production at our third plant in McCalla, Ala.,” Smucker said. “The 900,000-square-foot facility is the company’s largest Uncrustables sandwiches manufacturing site. This new capacity also enables us to go beyond $1 billion in net sales and to deliver innovation through flavor extensions and seasonal offerings.”

He said the September launch of an Uncrustables peanut butter and raspberry sandwich is “already exceeding our expectations,” a Halloween-themed chocolate flavored hazelnut spread Uncrustables sandwich “inspired trial and more eating occasions,” and a limited distribution of a peanut butter-only sandwich is slated to begin national distribution in fiscal 2026.

“With this incredible momentum fueling the Uncrustables brand, we now anticipate full-year net sales for the brand to be over $900 million in fiscal 2025, exceeding our initial expectation of $100 million of net sales growth,” Smucker added.

In other categories, US Retail Coffee net sales rose 3% to $704 million in the second quarter, with operating profit climbing 19%. Net sales for US Retail Pet Foods declined 4% to $445.4 million, and operating income swelled by 25%. The International and Away From Home segment saw net sales dip 1% to $321.1 million, with operating income up 13%.

For the first half, J.M. Smucker’s net income totaled $160.5 million, or $1.51 per share, compared with $378.5 million, or $3.69 per share, in the prior-year period. Adjusted net earnings were $553.7 million, or $5.19 per share, versus $492 million, or $4.80 per share, a year earlier. First-half net sales came in at $4.4 billion, up 17% year over year from $3.74 billion.

J.M. Smucker cited the strong second quarter in lifting its fiscal 2025 earnings guidance for adjusted EPS to between $9.70 and $10.10, compared with $9.60 to $10 previously. The company reaffirmed its net sales growth outlook of 8.5% to 9.5%.