JM Smucker Earnings, McDonald's Downgrade, Steel Shares Drop
Jun 10, 2025
JM Smucker's shares plummeted 16% as rising U.S. tariffs hit coffee costs, sparking worries about consumer demand. Meanwhile, McDonald's faced a downgrade from a previously positive rating due to shifting consumer habits and the impact of weight-loss drugs, potentially costing the chain millions. In the steel sector, companies like Nucor and Cleveland-Cliffs saw stock declines following news of potential tariff removals, hinting at significant market shifts. The episode dives into the intricacies of these market reactions.
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insights INSIGHT
JM Smucker's Tariff Pain
JM Smucker's shares dropped 16% due to increased costs from US tariffs on coffee.
The company raised coffee prices multiple times and expects further increases, risking reduced demand.
question_answer ANECDOTE
Folgers and Cafe Bustelo Anecdotes
Tim Stenovec shared that his grandma drank Folgers coffee, a JM Smucker brand.
Alex mentioned Cafe Bustelo's hipster cachet in Brooklyn, adding a personal connection to Smucker's brands.
insights INSIGHT
McDonald's Faces Growing Headwinds
McDonald's stock has fallen for seven consecutive days, the worst streak since 2013.
A downgrade from Redburn warns weight loss drugs and inflation threaten its consumer base and revenues.
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- JM Smucker (SJM) shares declined the most in nearly four decades after saying US tariffs increasing costs in its coffee business will hurt profit, continuing a challenging run for the biggest US packaged food producers. The company, which owns the Folgers and Cafe Bustelo coffee brands, said adjusted earnings this fiscal year will be as much as $9.50 a share. The impact of higher coffee costs and US levies reduced that forecast by roughly $1 a share, Smucker said.
- McDonald's (MCD) shares slipped on Tuesday after Redburn Atlantic gave the burger chain its sole sell rating, saying shifting consumer patterns due to weight-loss drugs and inflation are cause for concern. Shares of McDonald’s fell as much as 1.8% to a March low on the downgrade, a two-notch cut from Redburn’s previous buy rating. Redburn held a buy rating on the stock since initiating coverage in 2023. As more Americans turn to GLP-1 drugs like Ozempic to lose weight, McDonald’s could see as much as a $428 million annual impact to revenue, representing about 1% of system sales, Redburn Atlantic analysts Chris Luyckx and Edward Lewis wrote. “A 1% drag today could easily build to 10% or more over time, particularly for brands skewed toward lower-income consumers or group occasions.”
- Steel shares such as Nucor (NUE) and Cleveland-Cliffs (CLF) dropped after Bloomberg News reported that US and Mexico are closing in on a deal that would remove President Donald Trump’s 50% tariffs on steel imports up to a certain volume, according to people familiar with the matter, a revamp of a similar deal between the trade partners during his first term. Trump hasn’t been directly involved in the negotiations and would need to sign off on any deal. The talks are being led by Commerce Secretary Howard Lutnick, according to the people, who asked not to be identified as the discussions are private. The people said the agreement hasn’t been finalized. Under its current terms, it would allow US buyers to import Mexican steel duty-free as long as they kept total shipments below a level based on historical trade volumes, according to the people. The new cap would be higher than what was allowed under a similar deal during Trump’s first term, they said, which was never a fixed figure but designed to “prevent surges.”
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