Good morning, and welcome to our 2026 annual meeting of shareholders. I'm Mark Smucker, Chief Executive Officer, President, and Chair of the Board of The J.M. Smucker Company. I'd like to start this 2026 annual meeting of shareholders by thanking you, our shareholders, for your continued commitment and investment in The J.M. Smucker Company. Before we get underway, I want to let you know that today's session is being recorded and a replay can be accessed via our corporate website. Also, today's event may contain forward-looking statements that reflect our expectations about the future performance of our business and actual results may differ due to risks and uncertainties. We were pleased with our fiscal year 2026 results as we exceeded the midpoint of our original guidance while effectively navigating a dynamic external environment.
Our performance reflects the strength of our focused strategy and the benefits of our portfolio optimization efforts, which have created a differentiated and complementary portfolio of leading and higher growth brands across attractive categories. In fiscal year 2026, we achieved record net sales of $9.1 billion and delivered new consumer-led innovation reflecting our focus on building brands consumers love. We remained agile and disciplined, effectively managing costs while continuing to invest in our marketing, commercial, and manufacturing capabilities. These actions drove strong cash generation with free cash flow of $1.2 billion, which exceeded our expectations. This strong financial foundation supports our disciplined capital deployment model, including our commitment to growing the dividend over time. Most recently, we increased our dividend for the 25th consecutive fiscal year.
As we enter fiscal year 2027, we are carrying meaningful momentum into the year and will continue to amplify what is working to position the company for sustained growth and long-term shareholder value creation. For fiscal year 2027, we are focused on three priorities. Driving focused organic volume growth across our key platforms, improving profitability and accelerating earnings growth for the company, and maintaining a disciplined approach to capital deployment. With brands consumers love, world-class capabilities, strong leadership, and a talented and passionate workforce, I am confident in our ability to deliver on these priorities. As always, our success is achieved together with all those who support our business and in that spirit, I'd like to welcome the company's board of directors, executive leadership team, and our auditors from Ernst & Young who are with us this morning.
I would also like to take a moment to recognize and welcome Bruce Chung and David Singer who were elected to our board of directors this past fiscal year. We are fortunate to have tremendous talent and expertise across our board to support the company's continued progress in executing our strategy. Bruce and Dave have been great additions to our already strong board, and I'm excited to continue to work with all our directors to advance our organization. As noted in the agenda for the meeting, we will first address our official business of reviewing and voting on the proposals in the proxy materials and then respond to any shareholder questions. Our executive leadership team, the chairs of our board committees, and our independent auditors will be available during the Q&A session to respond to appropriate questions.
Now, I ask our Chief Legal Officer and Secretary, Jeannette Knudsen, to establish that the meeting has been duly called to order and that a quorum is present for the annual meeting.
Thank you, Mark. The Board fixed June 15th, 2026, as a record date for determining the shareholders entitled to vote at this meeting. An affidavit is with the Inspector of Election attesting to the fact that the notice of the annual meeting, the proxy statement, and the 2026 annual report were mailed to shareholders of record beginning on June 26th, 2026. Louis Larsen has been appointed to act as Inspector of Election at this meeting and has submitted a report to me confirming that there are more than the required majority of total shares outstanding present by proxy. Since a quorum is present, this meeting may proceed to transact business.
The 2026 annual meeting of shareholders is now called to order. The complete minutes of last year's annual meeting of shareholders, as well as a copy of the company's most recent annual report and Form 10-K that includes the financial statements and Ernst & Young's audit reports for the fiscal year ended April 30th, 2026, have been posted to the meeting site for inspection. Our Audit Committee has reviewed the audit reports and approved the financial statements in the annual report. The business of this meeting is limited to the three management proposals included in the proxy statement. I will now ask Jeannette to review the management proposals along with the voting results for each proposal.
The polls for shareholder voting are open. Any shareholder who did not submit a proxy or submitted a proxy and wishes to revoke it and vote in person may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or internet and do not want to change their vote do not need to take any further action. Any vote submitted today will not be included in the results that will be reported today, but will be tabulated and included with the final results. The first proposal concerns the election of 11 directors as set forth in the proxy statement to serve for a term of one year, which will expire at the 2027 Annual Meeting of Shareholders.
Each of the director nominees has received a majority of the votes cast in favor of their election to the board. The nominees are hereby elected for a one-year term and further, until their successors are otherwise appointed or elected. The second proposal is ratification of the appointment of Ernst & Young as the company's independent registered public accounting firm for the fiscal year ending April 30th, 2027. An affirmative vote of the holders of a majority of the votes cast is required to pass this proposal. 97% of votes have been cast in favor of this proposal, so the proposal is approved. The third proposal is the advisory vote on the company's executive compensation. An affirmative vote of the holders of a majority of the votes cast is required to pass this proposal.
96% of votes have been cast in favor of this proposal, so the proposal is approved. This concludes the voting results. The company will publicly announce the final voting results on or before August 18th, 2026, through the filing of a Form 8-K with the Securities and Exchange Commission.
Thank you, Jeannette. I declare the polls closed. The proxies will be counted by and held in the possession of the Inspector of Election. As there is no further formal business to come before the annual meeting, I declare this 2026 Annual Meeting of Shareholders adjourned, and all matters before it closed. In closing, I want to reiterate the confidence we have in the future of our company and the opportunities ahead. Our proven strategy, portfolio of leading brands, and talented workforce provide a strong foundation, and we are uniquely positioned to deliver long-term growth and create shareholder value. To all our shareholders, we thank you for your support and trust in The J.M. Smucker Company. We are now happy to take your questions. Joining me for this Q&A session are members of the company executive leadership team and our board committee chairs.
If you are a validated shareholder and have a question, please enter it on the web portal. Out of consideration for others, please limit yourself to one question. Please note this meeting is being recorded. We will attempt to answer as many questions as time allows, but only questions that are relevant to the meeting will be addressed. Any appropriate questions that we do not have time for will be addressed on our company website. Now, we'll take the first question.
The first question is: I was surprised to read in Value Line Analysis last month that top management expects sales to decline 3%-4% in fiscal year 2026. Would you comment on that?
Sure. This is Mark Smucker. First of all, wanted to acknowledge and thank you for your acknowledgment in the question which wasn't stated about our increase in the dividend. Obviously, continuing to support our shareholders through a healthy dividend and on a disciplined capital deployment model is very important to us, so just wanted to acknowledge that and thank you for your recognition of that. That will remain important to us. As it relates to the decline in sales that is forecasted over our fiscal year, that is largely due to the deflation in the green coffee commodity, and we do expect that over the course of our fiscal year, our business to remain healthy across the company.
The second question is, with El Niño coming up and commodity price pressure, how does the company protect itself?
Hi, this is Rob Ferguson. Thank you for the question. We are actively managing and monitoring the potential impact of the El Niño, particularly within our green coffee commodity. The market for green coffee continues to experience volatility. However, the commodity is deflationary relative to the prior year, as Mark mentioned. As we outlined on our recent earnings call, we expect segment profit margins for our coffee segment to return to the high twenties this fiscal year, which contemplates the impact from coffee deflation. It's important to remember that coffee is a pass-through category, and we manage our coffee business through a strategy that demonstrates a balance between responsibly recovering inflationary input costs while providing consumers with options ranging from value to premium. We maintain a flexible structure that allows us to manage cost fluctuations over time, and we have successfully navigated periods of volatility in the past.
We will continue to pull the levers available to us and manage the coffee business as we always have while ensuring the portfolio is positioned for long-term growth.
At this time, there are no more questions in the queue. I'll turn the call back over to Mark Smucker for closing comments.
Thank you everyone for joining us today, and thank you to our shareholders for your ongoing support and confidence in The J.M. Smucker Company. Looking aa`head, I am encouraged by the performance of our business and the success of our differentiated portfolio. Our strategy is working, and the strong foundation we have established gives us a high level of confidence in our ability to create shareholder value. We are carrying meaningful momentum into fiscal year 2027 with strategic priorities that position the company to deliver strong near-term results while driving long-term growth. We are proud of all that we have achieved and are even more excited about our future. Thank you all again for your time, and have a wonderful day.
The meeting has now concluded. Thank you for joining, and have a pleasant day.