The J. M. Smucker Company (SJM) engages in the manufacture and marketing of branded food products worldwide. The company’s primary products include coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, and canned milk.
Strong organic sales growth, product innovation and constant efforts to expand through acquisitions have remained the company’s strong points over the past several quarters. However, the company remains concerned about the hike in coffee costs since Jan 2014, leading to increased prices of Folgers and Dunkin' Donuts branded coffee products, as a result of which the company has witnessed volume declines in the first half of fiscal 2015.
Analysts have been cautiously optimistic in the recent months about the SJM’s earnings and kept their estimates unchanged over the last 30 days. Further, SJM does not have a decent earnings history. SJM has delivered negative earnings surprise in two of the last four quarters, positive surprise in one quarter, and in-line estimates in another quarter, making for an average surprise of 0.38%.
Currently, SJM has a Zacks Rank #3 (Hold), but that could definitely change following Smucker’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: SJM posted earnings of $1.54 per share, better than our consensus of $1.50 per share. Investors should note that these figures take out stock option expenses.
Revenue: SJM posted revenues of $1.44 billion. This missed our consensus estimate of $1.46 billion.
Key Stats to Note: Sales mix was unfavorable due to decline in volumes, most significantly in the Smucker’s U.S. Retail Coffee segment and represented 1 percentage point of the net sales decrease. However, the acquired Sahale business contributed $12.8 million to net sales in the third quarter of 2015. Organic sales declined 2% in the reported quarter.
Stock Price: Inactive in pre-market trading.
Update: Analyst Report
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