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The J.M. Smucker (SJM) Raises EPS Guidance on Q1 Earnings Beat
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The J. M. Smucker Company (SJM - Free Report) posted first-quarter fiscal 2024 results, wherein the bottom line increased year over year and beat the Zacks Consensus Estimate. However, the top line declined year over year, partly due to the impact of the pet food brand divestiture.
However, the company benefited from volume increases in all segments. Management remains on track to support its core growth platforms, including coffee, snacking and pet. Sustained business momentum encouraged this Zacks Rank #2 (Buy) company to raise its adjusted earnings per share (EPS) guidance for fiscal 2024.
Quarter in Detail
Adjusted earnings of $2.21 per share jumped 32% year over year and surpassed the Zacks Consensus Estimate of $2.07.
The J. M. Smucker Company Price, Consensus and EPS Surprise
Net sales amounted to about $1.81 billion, which dropped 4% year over year. The Zacks Consensus Estimate was pegged at $1.84 billion. Excluding noncomparable sales from divestitures and currency movements, net sales surged 21%.
The uptick in comparable net sales can be attributed to the higher volume/mix (mainly due to Jif peanut butter) and improved net price realization (mainly reflecting list price increases for the U.S. Retail, International and Away from Home and U.S. Retail Consumer Foods segments).
The gross profit went up 19% due to increased net price realization and a favorable volume mix, which made up for higher costs. The adjusted gross profit grew 10%. The adjusted operating income jumped 23%.
Segmental Performance
U.S. Retail Pet Foods: The segment’s sales tumbled 40% to $441 million. Excluding non-comparable net sales associated with the pet food brand divestiture, the metric rose 22%. The volume/mix had a 12-percentage point positive impact on net sales, with net price realization boosting net sales by 10 percentage points. The segment’s profit dropped 32% to $81.3 million.
U.S. Retail Coffee: Net sales increased 5% to $625.1 million. The volume/mix had a four-percentage-point positive impact on net sales, while net price realization was neutral. The segment’s profit soared 17% to $170.1 million.
U.S. Retail Consumer Foods: Sales in the segment increased 49% to $464 million. The volume/mix had a 28-percentage point positive impact on sales, mainly due to Jif peanut butter and Smucker’s Uncrustables frozen sandwiches. The net price realization boosted net sales by 22 percentage points. The segment’s profit went up by 93% to $105.7 million.
International and Away from Home: Net sales advanced 17% to $275.1 million. Excluding the impact of noncomparable net sales associated with the pet food brand divestiture and currency movements, net sales grew 22%.
The volume/mix had a 14-percentage-point positive effect, and the net price realization had a positive impact of eight percentage points on combined segment net sales. The segment’s profit more than doubled to $36.4 million.
Other Financials
The J. M. Smucker exited the quarter with cash and cash equivalents of $241.1 million, long-term debt of $4,315.1 million and total shareholders’ equity of $7,003.4 million.
Cash flow provided by operating activities amounted to $217.9 million for the three months ended Jul 31, 2023. Free cash flow was $67.6 million in the quarter. The J. M. Smucker repurchased nearly 2.4 million shares for $372 million in the first quarter.
Free cash flow and capital expenditures are likely to be $650 million and 550 million, respectively, in fiscal 2024.
Fiscal 2024 Guidance
For fiscal 2024, SJM anticipates comparable net sales to rise 8.5-9.5%. Comparable sales exclude net sales in the year-ago period associated with the divestiture of certain pet food brands. The comparable net sales view reflects the positive impact of elevated net pricing and a favorable volume/mix.
Net sales are anticipated to decline 10-11% in fiscal 2024.
The adjusted EPS for fiscal 2024 is now envisioned in the $9.45-$9.85 band, up from the $9.20-$9.60 band expected earlier. The bottom-line view reflects the positive impact of pricing and volume/mix, partly countered by elevated SD&A expenses.
The bottom-line view takes into account an adjusted gross profit margin of nearly 37%. Also, the adjusted effective income tax rate is envisioned to be 24%.
Shares of the company have risen 1.4% in the past year against the industry’s decrease of 5.5%.
The Zacks Consensus Estimate for Post Holdings’ current fiscal year sales and earnings suggests growth of 13.5% and 184.5%, respectively, from the corresponding year-ago reported figures.
Inter Parfums (IPAR - Free Report) , which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank #1. IPAR has an expected EPS growth rate of 15% for three to five years.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales indicates 19.7% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Helen of Troy (HELE - Free Report) , a provider of several consumer products, currently has a Zacks Rank #2. HELE’s expected EPS growth rate for three to five years is 8%.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales suggests a decline of 2.9% from the year-ago reported numbers. HELE has a trailing four-quarter earnings surprise of 8.1%, on average.
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The J.M. Smucker (SJM) Raises EPS Guidance on Q1 Earnings Beat
The J. M. Smucker Company (SJM - Free Report) posted first-quarter fiscal 2024 results, wherein the bottom line increased year over year and beat the Zacks Consensus Estimate. However, the top line declined year over year, partly due to the impact of the pet food brand divestiture.
However, the company benefited from volume increases in all segments. Management remains on track to support its core growth platforms, including coffee, snacking and pet. Sustained business momentum encouraged this Zacks Rank #2 (Buy) company to raise its adjusted earnings per share (EPS) guidance for fiscal 2024.
Quarter in Detail
Adjusted earnings of $2.21 per share jumped 32% year over year and surpassed the Zacks Consensus Estimate of $2.07.
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 about $1.81 billion, which dropped 4% year over year. The Zacks Consensus Estimate was pegged at $1.84 billion. Excluding noncomparable sales from divestitures and currency movements, net sales surged 21%.
The uptick in comparable net sales can be attributed to the higher volume/mix (mainly due to Jif peanut butter) and improved net price realization (mainly reflecting list price increases for the U.S. Retail, International and Away from Home and U.S. Retail Consumer Foods segments).
The gross profit went up 19% due to increased net price realization and a favorable volume mix, which made up for higher costs. The adjusted gross profit grew 10%. The adjusted operating income jumped 23%.
Segmental Performance
U.S. Retail Pet Foods: The segment’s sales tumbled 40% to $441 million. Excluding non-comparable net sales associated with the pet food brand divestiture, the metric rose 22%. The volume/mix had a 12-percentage point positive impact on net sales, with net price realization boosting net sales by 10 percentage points. The segment’s profit dropped 32% to $81.3 million.
U.S. Retail Coffee: Net sales increased 5% to $625.1 million. The volume/mix had a four-percentage-point positive impact on net sales, while net price realization was neutral. The segment’s profit soared 17% to $170.1 million.
U.S. Retail Consumer Foods: Sales in the segment increased 49% to $464 million. The volume/mix had a 28-percentage point positive impact on sales, mainly due to Jif peanut butter and Smucker’s Uncrustables frozen sandwiches. The net price realization boosted net sales by 22 percentage points. The segment’s profit went up by 93% to $105.7 million.
International and Away from Home: Net sales advanced 17% to $275.1 million. Excluding the impact of noncomparable net sales associated with the pet food brand divestiture and currency movements, net sales grew 22%.
The volume/mix had a 14-percentage-point positive effect, and the net price realization had a positive impact of eight percentage points on combined segment net sales. The segment’s profit more than doubled to $36.4 million.
Other Financials
The J. M. Smucker exited the quarter with cash and cash equivalents of $241.1 million, long-term debt of $4,315.1 million and total shareholders’ equity of $7,003.4 million.
Cash flow provided by operating activities amounted to $217.9 million for the three months ended Jul 31, 2023. Free cash flow was $67.6 million in the quarter. The J. M. Smucker repurchased nearly 2.4 million shares for $372 million in the first quarter.
Free cash flow and capital expenditures are likely to be $650 million and 550 million, respectively, in fiscal 2024.
Fiscal 2024 Guidance
For fiscal 2024, SJM anticipates comparable net sales to rise 8.5-9.5%. Comparable sales exclude net sales in the year-ago period associated with the divestiture of certain pet food brands. The comparable net sales view reflects the positive impact of elevated net pricing and a favorable volume/mix.
Net sales are anticipated to decline 10-11% in fiscal 2024.
The adjusted EPS for fiscal 2024 is now envisioned in the $9.45-$9.85 band, up from the $9.20-$9.60 band expected earlier. The bottom-line view reflects the positive impact of pricing and volume/mix, partly countered by elevated SD&A expenses.
The bottom-line view takes into account an adjusted gross profit margin of nearly 37%. Also, the adjusted effective income tax rate is envisioned to be 24%.
Shares of the company have risen 1.4% in the past year against the industry’s decrease of 5.5%.
Other Solid Bets
Post Holdings (POST - Free Report) , a consumer-packaged goods holding company, currently sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 59.6% on average. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for Post Holdings’ current fiscal year sales and earnings suggests growth of 13.5% and 184.5%, respectively, from the corresponding year-ago reported figures.
Inter Parfums (IPAR - Free Report) , which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank #1. IPAR has an expected EPS growth rate of 15% for three to five years.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales indicates 19.7% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Helen of Troy (HELE - Free Report) , a provider of several consumer products, currently has a Zacks Rank #2. HELE’s expected EPS growth rate for three to five years is 8%.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales suggests a decline of 2.9% from the year-ago reported numbers. HELE has a trailing four-quarter earnings surprise of 8.1%, on average.