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The J.M. Smucker (SJM) Gains on Solid Pricing, Coffee Business
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The J. M. Smucker Company (SJM - Free Report) appears well-placed due to its focus on core strategies. Strength in the coffee business and a revival in the Away from Home division have been particularly working well for the company. Additionally, efficient pricing actions have been aiding The J. M. Smucker amid elevated cost inflation and supply-chain challenges.
The impact of the abovementioned upsides was reflected in the company’s first-quarter fiscal 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and the former increased year over year. Based on a better-than-expected first-quarter show and continued brand momentum, management pulled up its view for fiscal 2023.
The J. M. Smucker Company Price, Consensus and EPS Surprise
For fiscal 2023, management anticipates net sales to rise 4-5% now, up from the previous guidance of 3.5%-4.5%. Excluding non-comparable sales related to the private label dry pet food and natural beverage and grain businesses’ divestitures, net sales are anticipated to improve nearly 6.5% at the midpoint of the net sales guidance compared with the 6% expected before.
Sales are likely to be backed by pricing actions, a higher volume/mix for the Uncrustables brand and the K-Cups category as well as continued strength in away from home channels. Adjusted EPS for fiscal 2023 is envisioned in the range of $8.20-$8.60, up from the earlier range of $7.85-$8.25.
The Zacks Consensus Estimate for the current fiscal-year earnings has gone up from $8.21 to $8.45 per share over the past 60 days. Shares of this Zacks Rank #2 (Buy) company have risen 3.4% in the past three months against the industry’s decline of 6.9%.
Image Source: Zacks Investment Research
Factors Working Well for The J. M. Smucker
The J. M. Smucker is progressing well with core priorities, which include driving commercial excellence, reshaping the portfolio, streamlining the cost structure and unleashing its organization to win. Strength in such strategies is helping The J. M. Smucker navigate complex supply-chain challenges. These are also helping the company improve in-store fundamentals and stock performance for brands.
The company is implementing inflation-justified pricing actions across all businesses. In the first quarter, net sales growth was mainly backed by positive net price realization in most company segments.
The J. M. Smucker is committed to increasing its focus and resources to reshape the portfolio to achieve sustainable growth across the pet food and pet snacks, coffee as well as snacking categories. Further, to streamline costs, management has been optimizing its supply chain, lowering discretionary costs and expanding network production efficiencies.
Talking of the coffee business, the overall coffee portfolio looks encouraging as at-home coffee habits created during the pandemic and at-home consumption remain high. In the first quarter, net sales for coffee grew 10%, backed by all brands in the company’s market-leading at-home coffee portfolio. The company’s Folgers, Dunkin and Cafe Bustelo brands are doing particularly well, with K-Cup sustaining its solid momentum.
Moving on, The J. M. Smucker Company is benefiting from the revival of the Away from Home division. This was witnessed in the first quarter of fiscal 2023, with net sales advancing 2% to $235 million in the International and Away from Home segments.
Excluding the impact of divestitures and currency headwinds, net sales rose 15% for the Away from Home division but fell 6% for the International division. The net price realization had a positive impact of 4 percentage points on overall segment net sales. The continuation of these trends is likely to be an upside, especially with things getting back to normal.
All said, we expect this branded food and beverage products company to remain on the growth trajectory.
Lancaster Colony, which manufactures and markets food products for the retail and foodservice markets, currently sports a Zacks Rank of 1 (Strong Buy). LANC delivered an earnings surprise of 170% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lancaster Colony’s current financial-year sales and EPS suggests growth of 9.6% and 38.3%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 47.3%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 14.8% and 42.3%, respectively, from the year-ago reported numbers.
TreeHouse Foods, which manufactures and distributes private label foods and beverages, sports a Zacks Rank #1 at present. TreeHouse Foods has a trailing four-quarter earnings surprise of 45.2%, on average.
The Zacks Consensus Estimate for THS’ current financial-year sales and earnings suggests growth of 16.8% and 15.1%, respectively, from the year-ago reported numbers.
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The J.M. Smucker (SJM) Gains on Solid Pricing, Coffee Business
The J. M. Smucker Company (SJM - Free Report) appears well-placed due to its focus on core strategies. Strength in the coffee business and a revival in the Away from Home division have been particularly working well for the company. Additionally, efficient pricing actions have been aiding The J. M. Smucker amid elevated cost inflation and supply-chain challenges.
The impact of the abovementioned upsides was reflected in the company’s first-quarter fiscal 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and the former increased year over year. Based on a better-than-expected first-quarter show and continued brand momentum, management pulled up its view for fiscal 2023.
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
Raised Guidance & Estimate Revisions
For fiscal 2023, management anticipates net sales to rise 4-5% now, up from the previous guidance of 3.5%-4.5%. Excluding non-comparable sales related to the private label dry pet food and natural beverage and grain businesses’ divestitures, net sales are anticipated to improve nearly 6.5% at the midpoint of the net sales guidance compared with the 6% expected before.
Sales are likely to be backed by pricing actions, a higher volume/mix for the Uncrustables brand and the K-Cups category as well as continued strength in away from home channels. Adjusted EPS for fiscal 2023 is envisioned in the range of $8.20-$8.60, up from the earlier range of $7.85-$8.25.
The Zacks Consensus Estimate for the current fiscal-year earnings has gone up from $8.21 to $8.45 per share over the past 60 days. Shares of this Zacks Rank #2 (Buy) company have risen 3.4% in the past three months against the industry’s decline of 6.9%.
Image Source: Zacks Investment Research
Factors Working Well for The J. M. Smucker
The J. M. Smucker is progressing well with core priorities, which include driving commercial excellence, reshaping the portfolio, streamlining the cost structure and unleashing its organization to win. Strength in such strategies is helping The J. M. Smucker navigate complex supply-chain challenges. These are also helping the company improve in-store fundamentals and stock performance for brands.
The company is implementing inflation-justified pricing actions across all businesses. In the first quarter, net sales growth was mainly backed by positive net price realization in most company segments.
The J. M. Smucker is committed to increasing its focus and resources to reshape the portfolio to achieve sustainable growth across the pet food and pet snacks, coffee as well as snacking categories. Further, to streamline costs, management has been optimizing its supply chain, lowering discretionary costs and expanding network production efficiencies.
Talking of the coffee business, the overall coffee portfolio looks encouraging as at-home coffee habits created during the pandemic and at-home consumption remain high. In the first quarter, net sales for coffee grew 10%, backed by all brands in the company’s market-leading at-home coffee portfolio. The company’s Folgers, Dunkin and Cafe Bustelo brands are doing particularly well, with K-Cup sustaining its solid momentum.
Moving on, The J. M. Smucker Company is benefiting from the revival of the Away from Home division. This was witnessed in the first quarter of fiscal 2023, with net sales advancing 2% to $235 million in the International and Away from Home segments.
Excluding the impact of divestitures and currency headwinds, net sales rose 15% for the Away from Home division but fell 6% for the International division. The net price realization had a positive impact of 4 percentage points on overall segment net sales. The continuation of these trends is likely to be an upside, especially with things getting back to normal.
All said, we expect this branded food and beverage products company to remain on the growth trajectory.
Other Stocks Worth a Look
Some other top-ranked stocks from the sector are Lancaster Colony (LANC - Free Report) , Lamb Weston (LW - Free Report) and TreeHouse Foods (THS - Free Report) .
Lancaster Colony, which manufactures and markets food products for the retail and foodservice markets, currently sports a Zacks Rank of 1 (Strong Buy). LANC delivered an earnings surprise of 170% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lancaster Colony’s current financial-year sales and EPS suggests growth of 9.6% and 38.3%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 47.3%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 14.8% and 42.3%, respectively, from the year-ago reported numbers.
TreeHouse Foods, which manufactures and distributes private label foods and beverages, sports a Zacks Rank #1 at present. TreeHouse Foods has a trailing four-quarter earnings surprise of 45.2%, on average.
The Zacks Consensus Estimate for THS’ current financial-year sales and earnings suggests growth of 16.8% and 15.1%, respectively, from the year-ago reported numbers.