Consumer Products

What Brought JM Smucker Down Despite Q4 Earnings Beat

J.M. Smucker Co. (NYSE: SJM) reported its fiscal fourth-quarter financial results before the markets opened on Thursday. The packaged foods company said that it had $2.57 in earnings per share (EPS) and $2.09 billion in revenue, which compares with consensus estimates of $2.29 in EPS and $2.06 billion in revenue. The same period of last year reportedly had $2.08 in EPS and $1.9 billion in revenue.

During the quarter, net sales increased 10%, driven by an 11 percentage point contribution from higher volume/mix across the majority of categories and brands in the U.S. Retail Consumer Foods, U.S. Retail Coffee and U.S. Retail Pet Foods segments. Lower net price realization, primarily for coffee, reduced net sales by 1 percentage point.

Before the COVID-19 pandemic, fourth-quarter performance was trending in-line with the firm’s previous guidance expectations. Stay-at-home orders implemented during the quarter resulted in a significant increase in consumer demand across the firm’s retail businesses and a significant decline for its Away From Home business.

In terms of its segments, the company reported as follows:

  • U.S. Retail Coffee net sales increased by 11% to $55.3 million.
  • U.S. Retail Consumer Foods net sales increased 22% to $89.9 million.
  • International and Away From Home net sales increased to $262.1 million.

Looking ahead to the 2021 fiscal full year, the company expects to see net sales decreasing in the range of 1% to 2% and EPS in the range of $7.90 to $8.30. Consensus estimates are calling for $8.43 in EPS and $7.7 billion in revenue for the year.

J.M. Smucker stock traded down less than 2% early Thursday at $112.58, in a 52-week range of $91.88 to $125.62. The consensus price target is $114.54.