ORRVILLE, OHIO — The J.M. Smucker Co. chalked up a solid start to fiscal 2025 despite a slower-than-expected first-quarter performance by its Sweet Baked Snacks division, led by Hostess Brands.

Orrville-based J.M. Smucker saw both earnings and sales edge up in the quarter, with adjusted results showing bigger gains excluding the impact of the Hostess Brands acquisition and Sahale Snacks divestiture last November and the divestiture of its Canadian condiment business this past January.

For the quarter ended July 31, net earnings were $185 million, equal to $1.74 per share on the common stock, up from $183.6 million, or $1.79 per share, a year ago. Adjusted net income — excluding income tax and amortization costs, net investment losses and special project costs — came in at $259.5 million, or $2.44 per share, up from $227 million, or $2.21 per share, in the 2023 quarter, J.M. Smucker said. The adjusted earnings per share (EPS) topped Wall Street’s high-end estimate by 18 cents.

“We are very pleased with the quarter, having grown both volume and sales and our earnings per share,” said Mark Smucker, chairman, president and chief executive officer, in an Aug. 28 conference call with analysts. “So we did have a solid quarter, and we saw growth in a number of places. Notably, Uncrustables continues to grow (and), obviously, peanut butter. (Café) Bustelo has performed exceptionally well.”

Consumer slowness in the convenience store channel impacted Sweet Baked Snacks results, and shopper wariness also affected the Pet Snacks division, Smucker noted.

“We did see a bit of an acceleration in consumers shopping less or less frequently in convenience stores,” he said. “And although we did see some of that earlier, it did seem to accelerate a bit in the quarter. I would highlight that, with our Sweet Baked Snacks business, we do over-index in the convenience channel and still are growing share there. So our performance in that channel is good. But as consumers have been a bit more cautious and have less discretionary income to spend, that is why we have seen a bit of an impact on both Sweet Baked Snacks and Pet Snacks.”

First-quarter net sales jumped 18% to $2.13 billion from $1.81 billion a year earlier. Excluding current-year net sales related to the Hostess Brands acquisition, which included the Voortman Bakery brand; prior-year net sales related to divestitures; and unfavorable foreign exchange, net sales rose 1%, J.M. Smucker said.

The comparable sales gain reflects a 1 percentage point uptick in volume/mix, mainly from increases by the Uncrustables, Café Bustelo and Meow Mix brands, partially offset by a decrease for the Dunkin’ coffee brand and lower contract-manufacturing sales from the divested pet food brands.

Sweet Baked Snacks totaled net sales of $333.7 million and operating profit of $74.4 million, but J.M. Smucker said it didn’t give year-over-year comparisons because of 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 $352.4 million and operating income of $61.7 million for its quarter ended June 30, 2023.

Though Smucker said Sweet Baked Snacks “delivered net sales below our expectations in the first quarter,” both he and chief financial officer Tucker Marshall expect the division’s performance to improve over the balance of the fiscal year and longer term.

“Sweet baked goods is a great category, and we have the right brand in the portfolio within sweet baked snacking,” Marshall said in the call. “We’re very pleased with that decision, the (Hostess) acquisition is on track from an integration standpoint. It’s a strong brand, and we have the right focus and tactics on the portfolio.

“What gives us confidence in the portfolio are the ongoing opportunities to see a stabilization in the c-store channel, ongoing merchandising and distribution opportunities within traditional retail, the ability to expand into the away-from-home channel as well, along with the opportunity to have synergies sort of come across from each business to support one another.”

In other categories, net sales climbed 7% to $496.8 million for the US Retail Frozen Handheld and Spreads segment — led by a 24% companywide gain for Uncrustables — with operating profit up 13%. US Retail Coffee net sales were flat at $623.4 million, while operating income inched up 1%. In US Retail Pet Foods, net sales fell 9% to $399.7 million, reflecting divestitures, and operating profit surged 42%. The International and Away From Home business unit saw net sales dip 1% to $271.5 million, with operating income rising 34%.

J.M. Smucker trimmed its full-year 2025 guidance. Adjusted EPS is now projected at $9.60 to $10, compared with $9.80 to $10.20 previously, with net sales growth pegged at 8.5% to 9.5% versus the prior forecast of 9.5% to 10.5%.

“Consumers continue to be selective in their spending, a trend that is largely driven by inflationary pressures and diminished discretionary income,” Smucker said in remarks before the analyst call. “These trends have impacted the sweet baked goods category and caused a reduction in convenience-store foot traffic, which disproportionately impacts the Hostess brand. When considering the current environment, we now anticipate net sales to be below our initial expectations for this fiscal year, which has been reflected in our updated fiscal 2025 guidance assumptions.”

Smucker said the Sweet Baked Snacks business is expected to “grow net sales approximately 4% annually, over time.” Helping to drive that growth will be expanded distribution; a “strong innovation pipeline” for Hostess; joint brand merchandising, “including the potential for collaborations”; and increased marketing support, he said.

J.M. Smucker also is “beginning to realize synergies earlier than anticipated” and expects to achieve some $100 million in cost synergies by the end of fiscal 2026, Smucker said.