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Smucker (SJM) Q1 Earnings: Can Buyouts & Savings Aid Results?
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The J. M. Smucker Company (SJM - Free Report) is slated to release first-quarter fiscal 2019 results on Aug 21. This consumer food and beverage marketer and manufacturer has mixed record of earnings surprises in the trailing four quarters. Let’s see what’s in store for Smucker this time around.
Growth via Strategic Partnerships & Buyouts
Smucker has been expanding business prospects through strategic partnerships. Notable amongst them is the company’s agreement with Dunkin’ Brands Group, Inc and Keurig Green Mountain to manufacture and sell K-Cup category of products. This agreement has been yielding for Smucker. Evidently, net sales at U.S. K-Cup jumped 11% in fiscal 2018, on the back of growth across all brands.
Additionally, Smucker actively pursues strategic acquisitions in the United States as well as overseas. Well, the company identifies robust opportunities in its pet products, coffee as well as snacks businesses and intends to concentrate more on these areas. Recently, the company concluded the acquisition of Ainsworth Pet Nutrition, LLC., a renowned name in the premium pet foods segment with popular brands like Rachael Ray Nutrish. Apart from Smucker, General Mills (GIS - Free Report) has also been striving to expand in this category and concluded the acquisition of Blue Buffalo Pet Products, Inc, earlier this year. Coming back to Smucker, other mention-worthy buyouts of the company include Big Heart Pet Brand, Sahale Snacks, Enray Inc and coffee brands and business operations of Rowland Coffee among others. These acquisitions have added iconic brands to the company’s portfolio and strengthened presence in the United States.
Apart from lucrative buyouts and partnerships, Smucker’s top line benefits from a strong portfolio with popular brands like Smucker's, Nature's Recipe, Dunkin' Donuts, Uncrustables, Jif, Meow Mix and 9Lives among others. Smucker's Uncrustable brand has been particularly doing well with net sales improving 15% in fiscal 2018, marking its fourth consecutive year of double-digit growth. Smucker is focused on brand building through product innovation.
Prospects From E-commerce
Growing preference for digital transactions has urged Smucker to take notice of e-commerce channel to boost sales. Though it accounted for a mere 2% of fiscal 2018 U.S. retail sales, Smucker’s e-commerce sales surged 71% during, including solid gains in the pet food brands and coffee units. Going ahead, the company expects e-commerce to be a vital contributor in top-line expansion.
Can Saving Efforts Counter Rising Costs?
Rising freight expenses has been a persistent hurdle for Smucker. Sadly, management expects freight headwinds to linger in fiscal 2019, which is a threat to margins. Apart from Smucker, other food companies such as United Natural Foods (UNFI - Free Report) and McCormick & Company (MKC - Free Report) have also been grappling with rising freight expenses. Additionally, lower net price realization has been limiting performance in some business categories.
Nevertheless, the company is expected to easily tide over such hurdles on the back of its robust cost-saving efforts. Based on efficient cost-management programs and gains from the K-Cup partnership, Smucker achieved savings of $100 million in fiscal 2018. Moreover, it expects savings worth $80 million in fiscal 2019 from improved K-Cup manufacturing cost, giving out positive signals for the quarter to be reported. Notably, these funds form part of management’s target of generating savings worth $250 million by fiscal 2020.
The J. M. Smucker Company Price, Consensus and EPS Surprise
We expect Smucker’s efficient cost-management efforts along with focus on buyouts and innovations to help deliver sturdy results in the impending quarter. Moreover, the Zacks Consensus Estimate for revenues for the fiscal first quarter is pegged at $1,952 million, depicting a rise of 11.6% from the year-ago quarter’s figure.
Additionally, the current consensus mark for earnings is pegged at $1.86, which shows a 23.2% jump from the year-ago quarter’s tally. However, the estimate has inched down by a penny in the past 30 days.
Will Smucker Miss Earnings Prediction?
Our proven model doesn’t show that Smucker is likely to beat bottom-line estimates this time. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Smucker (SJM) Q1 Earnings: Can Buyouts & Savings Aid Results?
The J. M. Smucker Company (SJM - Free Report) is slated to release first-quarter fiscal 2019 results on Aug 21. This consumer food and beverage marketer and manufacturer has mixed record of earnings surprises in the trailing four quarters. Let’s see what’s in store for Smucker this time around.
Growth via Strategic Partnerships & Buyouts
Smucker has been expanding business prospects through strategic partnerships. Notable amongst them is the company’s agreement with Dunkin’ Brands Group, Inc and Keurig Green Mountain to manufacture and sell K-Cup category of products. This agreement has been yielding for Smucker. Evidently, net sales at U.S. K-Cup jumped 11% in fiscal 2018, on the back of growth across all brands.
Additionally, Smucker actively pursues strategic acquisitions in the United States as well as overseas. Well, the company identifies robust opportunities in its pet products, coffee as well as snacks businesses and intends to concentrate more on these areas. Recently, the company concluded the acquisition of Ainsworth Pet Nutrition, LLC., a renowned name in the premium pet foods segment with popular brands like Rachael Ray Nutrish. Apart from Smucker, General Mills (GIS - Free Report) has also been striving to expand in this category and concluded the acquisition of Blue Buffalo Pet Products, Inc, earlier this year. Coming back to Smucker, other mention-worthy buyouts of the company include Big Heart Pet Brand, Sahale Snacks, Enray Inc and coffee brands and business operations of Rowland Coffee among others. These acquisitions have added iconic brands to the company’s portfolio and strengthened presence in the United States.
Apart from lucrative buyouts and partnerships, Smucker’s top line benefits from a strong portfolio with popular brands like Smucker's, Nature's Recipe, Dunkin' Donuts, Uncrustables, Jif, Meow Mix and 9Lives among others. Smucker's Uncrustable brand has been particularly doing well with net sales improving 15% in fiscal 2018, marking its fourth consecutive year of double-digit growth. Smucker is focused on brand building through product innovation.
Prospects From E-commerce
Growing preference for digital transactions has urged Smucker to take notice of e-commerce channel to boost sales. Though it accounted for a mere 2% of fiscal 2018 U.S. retail sales, Smucker’s e-commerce sales surged 71% during, including solid gains in the pet food brands and coffee units. Going ahead, the company expects e-commerce to be a vital contributor in top-line expansion.
Can Saving Efforts Counter Rising Costs?
Rising freight expenses has been a persistent hurdle for Smucker. Sadly, management expects freight headwinds to linger in fiscal 2019, which is a threat to margins. Apart from Smucker, other food companies such as United Natural Foods (UNFI - Free Report) and McCormick & Company (MKC - Free Report) have also been grappling with rising freight expenses. Additionally, lower net price realization has been limiting performance in some business categories.
Nevertheless, the company is expected to easily tide over such hurdles on the back of its robust cost-saving efforts. Based on efficient cost-management programs and gains from the K-Cup partnership, Smucker achieved savings of $100 million in fiscal 2018. Moreover, it expects savings worth $80 million in fiscal 2019 from improved K-Cup manufacturing cost, giving out positive signals for the quarter to be reported. Notably, these funds form part of management’s target of generating savings worth $250 million by fiscal 2020.
The J. M. Smucker Company Price, Consensus and EPS Surprise
The J. M. Smucker Company Price, Consensus and EPS Surprise | The J. M. Smucker Company Quote
Estimates: Sales & Earnings to Rise Y/Y
We expect Smucker’s efficient cost-management efforts along with focus on buyouts and innovations to help deliver sturdy results in the impending quarter. Moreover, the Zacks Consensus Estimate for revenues for the fiscal first quarter is pegged at $1,952 million, depicting a rise of 11.6% from the year-ago quarter’s figure.
Additionally, the current consensus mark for earnings is pegged at $1.86, which shows a 23.2% jump from the year-ago quarter’s tally. However, the estimate has inched down by a penny in the past 30 days.
Will Smucker Miss Earnings Prediction?
Our proven model doesn’t show that Smucker is likely to beat bottom-line estimates this time. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
While Smucker carries a Zacks Rank #3, its Earnings ESP of -0.65% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>