J.M. Smucker feels the bite in pet food in tough retail climate

J.M. Smucker reported its fourth‑quarter (Q4) and full‑year 2025 (FY2025) fiscal results, with notable headwinds in its US retail pet foods segment.

While the company’s overall net sales from 30 January to 30 April 2025 fell 3% year‑over‑year (YoY) to $2.14 billion (€1.9B), the pet food category faced a more significant decline, reflecting broader strategic and operational adjustments.

Pet food posted $395.5 million (€345M) in net sales during Q4, down 13% from the same quarter in FY2024, primarily driven by an 11% drop in volume/mix and a 2% decrease in net price realization.

According to the Ohio-headquartered manufacturer, the volume decline was attributed to a reduction in demand for dog snacks.

Additionally, a planned reduction in contract manufacturing sales contributed to the drop following the divestment of several pet food brands. These brands had accounted for $16.2 million (€14.1M) in contract manufacturing sales the year before, compared to only $6.5 million (€5.7 million) in the current quarter.

Profit margin gain

Despite the sales decline, the pet segment maintained a substantial profit margin of 26.8%, a 160‑basis‑point improvement over the previous year, while its profit totaled $106.1 million (€92.5M), a 7% decline, reflecting pressures from lower sales volumes and pricing, partially offset by cost reductions and decreased marketing expenses.

On an annual basis, the US retail pet food business generated $1.7 billion (€1.5B) in revenue, accounting for 19% of the company’s total net sales of $8.7 billion (€7.6B). A year earlier, this segment accounted for 21% of revenue.

The product mix within the segment remained heavily weighted toward dog snacks (54%) and cat food and snacks (44%), with contract manufacturing of the divested brands making up just 2%.

New launches

Among the highlights, though, was the expansion of the company’s Milk-Bone and Meow Mix brands.

“In dog snacks, we launched the first dog treat featuring a human food brand, Milk-Bone Peanut Buttery Bites made with Jif peanut butter, which outpaced all competitor innovations launched in 2024,” says CEO Mark Smucker.

“The launch continues to exceed our expectations and contributed to the strong double-digit net sales growth for our Milk-Bone soft and chewy dog snacks this past fiscal year.”

Expenditure slowdown

The manufacturer did not shy away from the realities of a slowdown in discretionary spending by US consumers facing inflation pressures but remains confident in the company’s offerings.

As CEO, Smucker notes that the firm’s dog snack remains “well-positioned” as they continue to focus on driving growth for the Milk-Bone brand.

“In cat food, we continue to see tailwinds as the cat population is projected to grow, and we anticipate further share growth for the Meow Mix brand. Dog snacks and cat food are attractive categories, and e-commerce trends will remain a tailwind for our portfolio,” he adds.

Looking ahead to FY2026

Several major portfolio changes, including the conclusion of contract manufacturing agreements for divested pet food brands by year-end, shaped J.M. Smucker’s FY2025 performance. This strategic exit, although it reduced revenue, was part of a broader realignment following the acquisition of Hostess Brands and other portfolio reshaping efforts.

Looking ahead, Smucker’s guidance for FY2026 reflects a continued transition for the pet food segment.

The company expects a $38 million (€33M) decline in contract manufacturing sales from the divested brands, which had previously contributed to buoyed results. However, this is not expected to derail broader company growth, with overall comparable net sales forecasted to rise 3.5% to 5.5%.

“We remain focused on delivering the business through the strength of our key growth platforms and advancing our strategic priorities,” concludes Smucker.

The company aims to stabilize and return to growth across its segments, including pet food, through portfolio optimization and targeted investment.