Smucker Beats Earnings But Cuts Guidance

This morning, JM Smucker (SJM) reported fiscal Q2 earnings of $2.26 per share. That beat Wall Street’s forecast of $2.13 per share, but adjusted net sales fell 1%. Cash from operations was up by 10%.

The bad news is that Smucker again lowered its full-year guidance. The previous guidance range was $8.35 to 8.55 per share. Now Smucker sees earnings of $8.10 to $8.30 per share. This is the second time they’ve cut guidance. The original guidance was $8.45 to $8.65 per share.

“While our second quarter sales performance did not meet our expectations, we delivered EPS growth ahead of our projection, reflecting our commitment to maintain financial discipline and strengthen our bottom line,” said Mark Smucker, President and Chief Executive Officer.

“Despite continuing softness for our premium dog food offerings, we were pleased with the performance for the balance of our portfolio, as the momentum for our cat food and pet snacks businesses continued with year over year sales increases, our high growth coffee brands improved household penetration and market share, and Smucker’s Uncrustables grew 19 percent, helping accelerate growth in snacking. Looking ahead, the actions we are taking across the Company, including the recently announced leadership changes, position us well for future long-term growth and shareholder value creation.”

The problem has been their premium dog food business. Smucker has said that other parts of the business will help soften the blow from bad pet food sales.

J.M. Smucker Co on Friday signaled that improving demand in its coffee and snack segments would counter weakness in its premium dog food business, helping investors look past the Jif peanut butter maker’s lowered full-year forecast.
The company’s shares reversed course from premarket losses to trade up 5%, as company executives also said the decline in its dog food business in the second quarter was isolated.

The rest of the business is doing well. Shares of Smucker initially looked to drop today, but the earnings call has helped spark a rally. SJM is currently up 4.6%.

Posted by on November 22nd, 2019 at 1:23 pm


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