Stinky Twinkie: Hostess Drags on Smucker’s Q4 Sales

J.M. Smucker Co. cites “significant progress” as the brand weathers elevated coffee prices and a consumer pullback on sweet snacks.

In its earnings report this morning, the food maker announced sales were down to $2.1 billion in the fourth quarter, a decline of 3% year-over-year. Gross margin also fell to 38.4%, versus 41.1% in Q4 2024.

Smucker’s Sweet Baked Snacks segment took the largest sales hit, dropping 26% year-over-year to $251 million in the quarter

Hostess, which the company acquired in September 2023, has underperformed since integrating into Smucker.

“We need to focus on the largest brands and related innovation in those brands,” chair of the board and CEO Mark Smucker said in response to an investor question about Hostess’ performance. “We really need to make sure that we are focused on the platforms that are really going to drive growth, and it’s really those core brands we’re going to invest behind.”

Donuts and cupcakes were highlighted as that core group of products that Smucker is investing brand-building efforts around. The company’s decision to close its Indianapolis manufacturing facility, announced in May, is part of “streamlining operations” and “elevating execution,” Smucker said.

He also pointed to a packaging redesign it unveiled in December as another way Smucker is trying to bring consumers back to the Hostess brand.

“We need to acknowledge that [Sweet Baked Snacks] may not grow at that mid-single digit level that it has in the past,” he said. “It’s also a reflection of how we continue to see the overall stabilization plan, inclusive of reigniting growth and making sure that we stay true to the Hostess brand.”

Smucker’s Retail Frozen Handheld and Spreads set net sales fell slightly $700,000, while the Uncrustables brand continued to dominate in the category. The brand grew sales by over $125 million to approximately $920 million over FY2025.

Smucker announced the brand is moving deeper into the convenience channel and meeting the growing demand by the opening of its third frozen sandwich facility in McCalla, Ala.

Other segments showed signs of optimism during Q4. The International and Away From Home segment was up 3%, and Retail Coffee sales were up 11%. The Café Bustelo brand led the charge in that set, growing sales 19%. Company leadership did caution that the Retail Coffee category is exposed to the impacts of tariffs and high green coffee commodity pricing. The company has already taken pricing actions to hedge against elevated costs and left the option to do more if green coffee prices don’t moderate.

Forecasting for FY2026, Smucker’s net sales were expected to increase 2% to 4%, as adjusted earnings per share were targeted to be in the range of $8.50 to $9.50.