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Smucker (SJM) to Report Q2 Earnings: What's in the Offing?

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The J. M. Smucker Company (SJM - Free Report) is likely to register a decline in the bottom line when it releases second-quarter fiscal 2021 numbers on Nov 24, before the opening bell. While the Zacks Consensus Estimate for earnings has remained stable in the past 30 days at $2.24 per share, it suggests a decline of 0.9% from the year-ago quarter’s levels. Notably, Smucker delivered positive earnings surprise of 41.1% in the last reported quarter. Further,the company has a trailing four-quarter earnings surprise of 16.4%, on average.

The Zacks Consensus Estimate for revenues is pegged at $2,017 million, which indicates an increase of about 3% from the prior-year quarter’s levels. However, it looks like the rate of sales growth is likely to have decelerated on a sequential basis during the period in discussion. The company had witnessed an increase of nearly 11% in the last reported quarter.

The J. M. Smucker Company Price and EPS Surprise

The J. M. Smucker Company Price and EPS Surprise

The J. M. Smucker Company price-eps-surprise | The J. M. Smucker Company Quote

Key Factors to Note

Smucker is benefiting from strength in its retail business, courtesy of increased at-home consumption amid the pandemic. Further, the company’s e-commerce channel is doing well given the increased number of online customers amid the social distancing. On its last earnings call, management stated that it expects to witness continued strength in the e-commerce channel, which bodes well for the quarter under review. Additionally, Smucker’s focus on boosting portfolio through innovation and prudent buyouts has been a driver.

However, elevated stay at-home trends dealt a blow to the company’s International and Away From Home segment in the last reported quarter. Continuation of such trends amid increased levels of social distancing is a concern. Also, any increase in SD&A expenses is likely to put pressure on profits. Incidentally, management expects a 1-2% rise in SD&A expenses in fiscal 2021.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Smuckerthis time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Smucker currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -2.17%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Casey's General Stores (CASY - Free Report) has an Earnings ESP of +3.32% and sports a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Best Buy (BBY - Free Report) has an Earnings ESP of +14.92% and carries a Zacks Rank #2, currently.

DICK'S Sporting (DKS - Free Report) has an Earnings ESP of +16.18% and currently carries a Zacks Rank of 3.

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