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The J.M. Smucker's (SJM) Deal With JDE Peet's to Aid Growth
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The J. M. Smucker Company (SJM - Free Report) has been focused on augmenting growth via lucrative acquisitions as well as meaningful partnerships. Moving on these lines, the company unveiled an alliance with JDE Peet’s, per which the latter will offer support to the former’s Away From Home liquid coffee business. This is likely to come on the back of foodservice equipment innovation, product development and production.
Incidentally, JDE Peet’s liquid coffee system provides big quantities of premium coffee in a hygienic way, which makes it an apt option for hospitals, hotels, conference centers, universities, hotels and other out-of-home customers. Certainly, this alliance is likely to strengthen The J.M. Smucker’s Away From Home liquid coffee business. Through this deal, The J. M. Smucker can pursue opportunities in the liquid coffee category more efficiently, which in turn will strengthen its existing customer solutions and boost category growth.
In connection with this, The J.M. Smucker also announced intentions to pursue and conclude the divestiture of its production facility in Suffolk, Virginia, in the spring of calendar 2022. Management stated that this alliance will not have any impact on The J.M. Smucker’s retail coffee business.
What’s More
The J.M. Smucker has been benefiting from increased at-home consumption amid the pandemic, which has been fueling its retail businesses. This was evident when the company posted robust third-quarter fiscal 2021 results, wherein both top and bottom lines grew year over year and surpassed the respective Zacks Consensus Estimate. Results were backed by strength in the company’s U.S. as well as international retail businesses, thanks to the pandemic-led increased at-home consumption and gains from its ongoing consumer-centric strategy.
Management raised its guidance for fiscal 2021 and remains focused on making additional brand investments. The J. M. Smucker now expects net sales growth of 2% compared with the previous range of flat to 1% growth. The top-line view reflects escalated at-home consumption, aiding the U.S. Retail Coffee and U.S. Retail Consumer Foods segments. On its third-quarter earnings call, management stated that it expects nearly half of the U.S. workforce to keep working remotely on a part or full-time basis after the pandemic compared with 30% before the pandemic. This, in turn, is likely to drive at-home breakfast and lunch practices, which will boost The J.M. Smucker’s Coffee and Consumer Foods business. Also, these trends are expected to benefit the pet category, where consumption is anticipated to rise 5% over the next few years.
However, the company’s Away From Home business has been under pressure due to increased social distancing. In the last reported quarter, the company’s International and Away From Home segment sales decreased 13% to $234.6 million. Excluding the impact of the Crisco divestment, net sales decreased 11% mainly due to a 27% decline in the company’s Away From Home division. We believe that the abovementioned partnership with JDE Peet’s is likely to provide some respite to the company’s Away From Home business.
Well, The J. M. Smucker has formed key partnerships with quite a few coffee companies. Its agreement with Keurig Green Mountain (KGM) and Dunkin’ Brands Group, Inc, to manufacture and sell the K-Cup category of products has been yielding results since fiscal 2016. In the third quarter of fiscal 2021, sales of K-Cup grew 27%, forming 30% of the U.S. Retail Coffee segment sales. Apart from this, the company has been undertaking acquisitions both in the United States as well as overseas. To this end, the buyout of Ainsworth (May 2018) has been aiding its performance in the U.S. Retail Pet Foods category. Other noteworthy acquisitions of the company include Big Heart Pet Brand (pet food maker), Sahale Snacks (branded nut and fruit snacks maker), Enray Inc. (manufacturer of organic, gluten-free ancient grain products) and coffee brands and business operations of Rowland Coffee, among others. These acquisitions have added iconic brands to the company’s portfolio and strengthened its presence in the United States.
The Zacks Rank #2 (Buy) stock has gained 5.8% in the past three months compared with the industry’s growth of 4.4%.
Medifast (MED - Free Report) , which currently carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 17.4%, on average.
Hain Celestial (HAIN - Free Report) has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 26.7%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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The J.M. Smucker's (SJM) Deal With JDE Peet's to Aid Growth
The J. M. Smucker Company (SJM - Free Report) has been focused on augmenting growth via lucrative acquisitions as well as meaningful partnerships. Moving on these lines, the company unveiled an alliance with JDE Peet’s, per which the latter will offer support to the former’s Away From Home liquid coffee business. This is likely to come on the back of foodservice equipment innovation, product development and production.
Incidentally, JDE Peet’s liquid coffee system provides big quantities of premium coffee in a hygienic way, which makes it an apt option for hospitals, hotels, conference centers, universities, hotels and other out-of-home customers. Certainly, this alliance is likely to strengthen The J.M. Smucker’s Away From Home liquid coffee business. Through this deal, The J. M. Smucker can pursue opportunities in the liquid coffee category more efficiently, which in turn will strengthen its existing customer solutions and boost category growth.
In connection with this, The J.M. Smucker also announced intentions to pursue and conclude the divestiture of its production facility in Suffolk, Virginia, in the spring of calendar 2022. Management stated that this alliance will not have any impact on The J.M. Smucker’s retail coffee business.
What’s More
The J.M. Smucker has been benefiting from increased at-home consumption amid the pandemic, which has been fueling its retail businesses. This was evident when the company posted robust third-quarter fiscal 2021 results, wherein both top and bottom lines grew year over year and surpassed the respective Zacks Consensus Estimate. Results were backed by strength in the company’s U.S. as well as international retail businesses, thanks to the pandemic-led increased at-home consumption and gains from its ongoing consumer-centric strategy.
Management raised its guidance for fiscal 2021 and remains focused on making additional brand investments. The J. M. Smucker now expects net sales growth of 2% compared with the previous range of flat to 1% growth. The top-line view reflects escalated at-home consumption, aiding the U.S. Retail Coffee and U.S. Retail Consumer Foods segments. On its third-quarter earnings call, management stated that it expects nearly half of the U.S. workforce to keep working remotely on a part or full-time basis after the pandemic compared with 30% before the pandemic. This, in turn, is likely to drive at-home breakfast and lunch practices, which will boost The J.M. Smucker’s Coffee and Consumer Foods business. Also, these trends are expected to benefit the pet category, where consumption is anticipated to rise 5% over the next few years.
However, the company’s Away From Home business has been under pressure due to increased social distancing. In the last reported quarter, the company’s International and Away From Home segment sales decreased 13% to $234.6 million. Excluding the impact of the Crisco divestment, net sales decreased 11% mainly due to a 27% decline in the company’s Away From Home division. We believe that the abovementioned partnership with JDE Peet’s is likely to provide some respite to the company’s Away From Home business.
Well, The J. M. Smucker has formed key partnerships with quite a few coffee companies. Its agreement with Keurig Green Mountain (KGM) and Dunkin’ Brands Group, Inc, to manufacture and sell the K-Cup category of products has been yielding results since fiscal 2016. In the third quarter of fiscal 2021, sales of K-Cup grew 27%, forming 30% of the U.S. Retail Coffee segment sales. Apart from this, the company has been undertaking acquisitions both in the United States as well as overseas. To this end, the buyout of Ainsworth (May 2018) has been aiding its performance in the U.S. Retail Pet Foods category. Other noteworthy acquisitions of the company include Big Heart Pet Brand (pet food maker), Sahale Snacks (branded nut and fruit snacks maker), Enray Inc. (manufacturer of organic, gluten-free ancient grain products) and coffee brands and business operations of Rowland Coffee, among others. These acquisitions have added iconic brands to the company’s portfolio and strengthened its presence in the United States.
The Zacks Rank #2 (Buy) stock has gained 5.8% in the past three months compared with the industry’s growth of 4.4%.
3 Other Food Stocks to Binge on
United Natural (UNFI - Free Report) has a Zacks Rank #2 and its bottom line outpaced the Zacks Consensus Estimate by 13.6% in the trailing four quarters, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medifast (MED - Free Report) , which currently carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 17.4%, on average.
Hain Celestial (HAIN - Free Report) has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 26.7%, on average.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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