We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The J.M. Smucker Q1 Earnings Top Estimates, SJM Stock Down on View Cut
Read MoreHide Full Article
The J. M. Smucker Company (SJM - Free Report) posted first-quarter fiscal 2025 results, wherein the top and bottom lines increased year over year, and earnings beat the Zacks Consensus Estimate. However, the company lowered its guidance for fiscal 2025 due to the dynamic consumer landscape and a rise in green coffee costs. Shares of SJM have dipped more than 4% in the pre-market trading session following the release.
On the brighter side, J. M. Smucker’s ability to achieve net sales and earnings growth despite a tough consumer environment is noteworthy. Management attributed this to the company’s strategic focus, progress in delivering core business objectives, successful integration of Hostess Brands, and commitment to transformation, cost discipline and cash generation.
SJM’s first-quarter results reflect the impact of several key transactions, including the divestiture of the Canada condiment business (Jan. 2, 2024), the acquisition of Hostess Brands (Nov. 7, 2023) and the divestiture of the Sahale Snacks business (Nov. 1, 2023).
SJM’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings of $2.44 per share advanced 10% year over year and surpassed the Zacks Consensus Estimate of $2.18.
The J. M. Smucker Company Price, Consensus and EPS Surprise
Net sales amounted to $2,125.1 million, which jumped 18% year over year while missing the Zacks Consensus Estimate of $2,134 million. Excluding noncomparable sales related to acquisitions and divestitures, as well as currency movements, net sales grew 1%. The uptick in comparable net sales can be attributed to the higher volume/mix (up 1%), whereas net price realization remained neutral.
The gross profit went up 22% due to the improved volume mix and a positive impact of the Hostess Brands acquisition, partly negated by the impact of divestitures. The adjusted gross profit grew 29%.
The adjusted operating income jumped 35% year over year to $447.9 million.
Decoding SJM’s Segmental Performance
U.S. Retail Pet Foods: The segment’s sales tumbled 9% to $399.7 million. The volume/mix had a six-percentage-point adverse impact on net sales, with the net price realization lowering the same by four percentage points. The segment’s profit surged 42% to $115.3 million.
U.S. Retail Coffee: The segment’s sales remained nearly flat at $623.4 million as the favorable volume/mix was offset by adverse net price realization. The segment’s profit rose 1% to $172.6 million.
U.S. Retail Frozen Handheld and Spreads: Sales in the segment increased 7% to $496.8 million. Excluding noncomparable sales in the year-ago period related to the divested Sahale Snacks business, net sales grew 9%. The volume/mix boosted net sales by 7%, and the net price realization aided net sales by one percentage point. The segment’s profit jumped 13% to $119 million.
Sweet Baked Snacks: Sales in the segment came in at $333.7 million, with the segment profit amounting to $74.4 million in the first quarter.
International and Away from Home: Net sales dropped 1% to $271.5 million. Excluding the impact of noncomparable net sales associated with divestitures and currency movements, net sales grew 8%. The volume/mix had a three-percentage-point positive effect, and the net price realization had a positive impact of five percentage points on combined segment net sales. The segment’s profit increased 34% to $48.6 million.
SJM’s Financial Health Snapshot
The J. M. Smucker exited the quarter with cash and cash equivalents of $39.5 million, long-term debt (net of current portion) of $6,775.3 million and total shareholders’ equity of $7,769.5 million.
Cash flow provided by operating activities amounted to $172.9 million for the three months ended July 31, 2024. Free cash flow was $49.2 million in the same time frame.
Free cash flow and capital expenditures are likely to be $875 million and $450 million, respectively, in fiscal 2025.
What to Expect From SJM in Fiscal 2025?
For fiscal 2025, SJM now anticipates comparable net sales to increase nearly 0.5-1.5% compared with the earlier view of 1.5-2.5%.
Fiscal 2025 net sales are anticipated to increase 8.5-9.5% now compared with the earlier view of 9.5-10.5%. The revised net sales guidance reflects a dynamic consumer landscape shaped by ongoing inflationary pressures and reduced discretionary income, which is impacting the dog snacks and sweet baked goods categories. It considers the anticipated effects of demand elasticity within the coffee portfolio due to further pricing actions driven by higher-than-expected green coffee costs. However, these challenges are partially offset by heightened expectations for Uncrustables sandwiches.
The adjusted EPS for fiscal 2025 is envisioned in the $9.60-$10 band, down from the $9.80-$10.20 range expected before. The company recorded an adjusted EPS of $9.94 in fiscal 2024.
The revised bottom-line guidance takes into account the updated net sales view, an adjusted gross profit margin of nearly 37.5% (indicating greater than expected green coffee costs) and a roughly 9% rise in SD&A expenses. The company had earlier expected the adjusted gross margin to be nearly 38% and SD&A expenses to rise 13%.
Shares of this Zacks Rank #3 (Hold) company have rallied 11.3% over the past three months compared with the industry’s growth of 2.3%.
Better-Ranked Staple Bets
The Chef’s Warehouse (CHEF - Free Report) , which distributes specialty food and center-of-the-plate products, has a trailing four-quarter earnings surprise of 33.7%, on average. CHEF currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current financial-year sales and earnings calls for growth of 9.7% and 12.6%, respectively, from the prior-year reported level.
Vital Farms (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year earnings indicates growth of 72.9% from the year-ago reported numbers.
Nomad Foods (NOMD - Free Report) , carrying a Zacks Rank #2, manufactures and distributes frozen foods. NOMD has a trailing four-quarter earnings surprise of 3.1%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 4.3% and 11.5%, respectively, from the prior-year reported level.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
The J.M. Smucker Q1 Earnings Top Estimates, SJM Stock Down on View Cut
The J. M. Smucker Company (SJM - Free Report) posted first-quarter fiscal 2025 results, wherein the top and bottom lines increased year over year, and earnings beat the Zacks Consensus Estimate. However, the company lowered its guidance for fiscal 2025 due to the dynamic consumer landscape and a rise in green coffee costs. Shares of SJM have dipped more than 4% in the pre-market trading session following the release.
On the brighter side, J. M. Smucker’s ability to achieve net sales and earnings growth despite a tough consumer environment is noteworthy. Management attributed this to the company’s strategic focus, progress in delivering core business objectives, successful integration of Hostess Brands, and commitment to transformation, cost discipline and cash generation.
SJM’s first-quarter results reflect the impact of several key transactions, including the divestiture of the Canada condiment business (Jan. 2, 2024), the acquisition of Hostess Brands (Nov. 7, 2023) and the divestiture of the Sahale Snacks business (Nov. 1, 2023).
SJM’s Quarterly Performance: Key Metrics and Insights
Adjusted earnings of $2.44 per share advanced 10% year over year and surpassed the Zacks Consensus Estimate of $2.18.
The J. M. Smucker Company Price, Consensus and EPS Surprise
The J. M. Smucker Company price-consensus-eps-surprise-chart | The J. M. Smucker Company Quote
Net sales amounted to $2,125.1 million, which jumped 18% year over year while missing the Zacks Consensus Estimate of $2,134 million. Excluding noncomparable sales related to acquisitions and divestitures, as well as currency movements, net sales grew 1%. The uptick in comparable net sales can be attributed to the higher volume/mix (up 1%), whereas net price realization remained neutral.
The gross profit went up 22% due to the improved volume mix and a positive impact of the Hostess Brands acquisition, partly negated by the impact of divestitures. The adjusted gross profit grew 29%.
The adjusted operating income jumped 35% year over year to $447.9 million.
Decoding SJM’s Segmental Performance
U.S. Retail Pet Foods: The segment’s sales tumbled 9% to $399.7 million. The volume/mix had a six-percentage-point adverse impact on net sales, with the net price realization lowering the same by four percentage points. The segment’s profit surged 42% to $115.3 million.
U.S. Retail Coffee: The segment’s sales remained nearly flat at $623.4 million as the favorable volume/mix was offset by adverse net price realization. The segment’s profit rose 1% to $172.6 million.
U.S. Retail Frozen Handheld and Spreads: Sales in the segment increased 7% to $496.8 million. Excluding noncomparable sales in the year-ago period related to the divested Sahale Snacks business, net sales grew 9%. The volume/mix boosted net sales by 7%, and the net price realization aided net sales by one percentage point. The segment’s profit jumped 13% to $119 million.
Sweet Baked Snacks: Sales in the segment came in at $333.7 million, with the segment profit amounting to $74.4 million in the first quarter.
International and Away from Home: Net sales dropped 1% to $271.5 million. Excluding the impact of noncomparable net sales associated with divestitures and currency movements, net sales grew 8%. The volume/mix had a three-percentage-point positive effect, and the net price realization had a positive impact of five percentage points on combined segment net sales. The segment’s profit increased 34% to $48.6 million.
SJM’s Financial Health Snapshot
The J. M. Smucker exited the quarter with cash and cash equivalents of $39.5 million, long-term debt (net of current portion) of $6,775.3 million and total shareholders’ equity of $7,769.5 million.
Cash flow provided by operating activities amounted to $172.9 million for the three months ended July 31, 2024. Free cash flow was $49.2 million in the same time frame.
Free cash flow and capital expenditures are likely to be $875 million and $450 million, respectively, in fiscal 2025.
What to Expect From SJM in Fiscal 2025?
For fiscal 2025, SJM now anticipates comparable net sales to increase nearly 0.5-1.5% compared with the earlier view of 1.5-2.5%.
Fiscal 2025 net sales are anticipated to increase 8.5-9.5% now compared with the earlier view of 9.5-10.5%. The revised net sales guidance reflects a dynamic consumer landscape shaped by ongoing inflationary pressures and reduced discretionary income, which is impacting the dog snacks and sweet baked goods categories. It considers the anticipated effects of demand elasticity within the coffee portfolio due to further pricing actions driven by higher-than-expected green coffee costs. However, these challenges are partially offset by heightened expectations for Uncrustables sandwiches.
The adjusted EPS for fiscal 2025 is envisioned in the $9.60-$10 band, down from the $9.80-$10.20 range expected before. The company recorded an adjusted EPS of $9.94 in fiscal 2024.
The revised bottom-line guidance takes into account the updated net sales view, an adjusted gross profit margin of nearly 37.5% (indicating greater than expected green coffee costs) and a roughly 9% rise in SD&A expenses. The company had earlier expected the adjusted gross margin to be nearly 38% and SD&A expenses to rise 13%.
Shares of this Zacks Rank #3 (Hold) company have rallied 11.3% over the past three months compared with the industry’s growth of 2.3%.
Better-Ranked Staple Bets
The Chef’s Warehouse (CHEF - Free Report) , which distributes specialty food and center-of-the-plate products, has a trailing four-quarter earnings surprise of 33.7%, on average. CHEF currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current financial-year sales and earnings calls for growth of 9.7% and 12.6%, respectively, from the prior-year reported level.
Vital Farms (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year earnings indicates growth of 72.9% from the year-ago reported numbers.
Nomad Foods (NOMD - Free Report) , carrying a Zacks Rank #2, manufactures and distributes frozen foods. NOMD has a trailing four-quarter earnings surprise of 3.1%, on average.
The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 4.3% and 11.5%, respectively, from the prior-year reported level.