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The J.M. Smucker (SJM) Gains on Solid Demand & Core Strategies
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The J. M. Smucker Company (SJM - Free Report) looks well placed, thanks to strength in its core priorities. In this regard, the company’s commitment toward increasing its focus to reshape its portfolio and streamline costs bodes well.
The J. M. Smucker continues to gain from increased pandemic-induced at-home consumption trends as consumers are looking for trusted brands. Moreover, the revival of the Away from Home division is driving growth. These trends drove the company’s second-quarter fiscal 2022 results, with the top and the bottom line beating the Zacks Consensus Estimate and rising year over year.
The company raised its fiscal 2022 net sales and adjusted earnings per share (EPS) guidance. The J. M. Smucker anticipates net sales in the range of 0.5% growth to 0.5% decline year over year. The company had earlier anticipated the metric to decline 1.5-2.5% year over year. The increase in net sales guidance reflects better-than-expected demand for the second quarter and the rest of the year. Also, incremental net pricing actions undertaken to counter higher costs led to an upward revision in net sales guidance. Adjusted EPS for fiscal 2022 are envisioned in the range of $8.35-$8.75 now, up from $8.25-$8.65 expected before.
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Focus on Core Strategies
The J. M. Smucker is progressing well with core priorities, which include driving commercial excellence, reshaping portfolio and streamlining cost structure. These strategies are helping the company navigate through complex supply chain challenges. The company is implementing inflation-justified pricing actions across all businesses with lesser-than-anticipated elasticity impacts. In its last earnings call, management highlighted that it raised or maintained market share for more than 75% of its U.S. Retail revenues in second-quarter fiscal 2022. The company is focused on achieving sustainable growth across the pet food and pet snacks, coffee and snacking categories.
With regard to reshaping the portfolio, the company concluded the divestiture of Natural Balance premium pet food business in February 2021. Also, Smucker sold its Crisco oils and shortening business to B&G Foods in December 2020. These moves will help the company divert its resources on categories with greater potential.
Talking of streamlining costs, management has been optimizing its supply chain, lowering discretionary costs and expanding network production efficiencies. Management expects SD&A expenses to decline 7% in fiscal 2022, reflecting gains from cost management and organizational restructuring programs, reduced-marketing expenses, lower incentive compensation and declines in discretionary expenses.
Certainly, gains from such well-knit strategies coupled with rising demand are likely to keep driving The J. M. Smucker’s growth.
MGP Ingredients, the producer and supplier of distilled spirits and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1. Shares of the company have gained 34.3% in the past three months.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 55.5% and 61.4%, respectively, from the year-ago period’s reported figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.
Tyson Foods, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 25.2%, on average. Shares of the company have gained 9.6% in the past three months.
The Zacks Consensus Estimate for Tyson Foods’ current financial-year sales suggests year-over-year growth of 7.5%, while the same for EPS indicates a decline of 10.9% from the year-ago period. TSN has an expected long-term earnings growth rate of 7.5%.
The Hain Celestial, which provides various natural and organic foods as well as personal care products in North America and Europe, carries a Zacks Rank #2 at present. HAIN has a trailing four-quarter earnings surprise of 9.7%, on average. Shares of the company have moved up 2.5% in the past three months.
The Zacks Consensus Estimate for The Hain Celestial’s current financial-year EPS suggests growth of 14.5% from the year-ago period’s reported number.
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The J.M. Smucker (SJM) Gains on Solid Demand & Core Strategies
The J. M. Smucker Company (SJM - Free Report) looks well placed, thanks to strength in its core priorities. In this regard, the company’s commitment toward increasing its focus to reshape its portfolio and streamline costs bodes well.
The J. M. Smucker continues to gain from increased pandemic-induced at-home consumption trends as consumers are looking for trusted brands. Moreover, the revival of the Away from Home division is driving growth. These trends drove the company’s second-quarter fiscal 2022 results, with the top and the bottom line beating the Zacks Consensus Estimate and rising year over year.
The company raised its fiscal 2022 net sales and adjusted earnings per share (EPS) guidance. The J. M. Smucker anticipates net sales in the range of 0.5% growth to 0.5% decline year over year. The company had earlier anticipated the metric to decline 1.5-2.5% year over year. The increase in net sales guidance reflects better-than-expected demand for the second quarter and the rest of the year. Also, incremental net pricing actions undertaken to counter higher costs led to an upward revision in net sales guidance. Adjusted EPS for fiscal 2022 are envisioned in the range of $8.35-$8.75 now, up from $8.25-$8.65 expected before.
Focus on Core Strategies
The J. M. Smucker is progressing well with core priorities, which include driving commercial excellence, reshaping portfolio and streamlining cost structure. These strategies are helping the company navigate through complex supply chain challenges. The company is implementing inflation-justified pricing actions across all businesses with lesser-than-anticipated elasticity impacts. In its last earnings call, management highlighted that it raised or maintained market share for more than 75% of its U.S. Retail revenues in second-quarter fiscal 2022. The company is focused on achieving sustainable growth across the pet food and pet snacks, coffee and snacking categories.
With regard to reshaping the portfolio, the company concluded the divestiture of Natural Balance premium pet food business in February 2021. Also, Smucker sold its Crisco oils and shortening business to B&G Foods in December 2020. These moves will help the company divert its resources on categories with greater potential.
Talking of streamlining costs, management has been optimizing its supply chain, lowering discretionary costs and expanding network production efficiencies. Management expects SD&A expenses to decline 7% in fiscal 2022, reflecting gains from cost management and organizational restructuring programs, reduced-marketing expenses, lower incentive compensation and declines in discretionary expenses.
Certainly, gains from such well-knit strategies coupled with rising demand are likely to keep driving The J. M. Smucker’s growth.
Shares of the Zacks Rank #2 (Buy) company have increased 6.4% in the past three months against the industry’s decline of 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Staple Picks
Some other top-ranked stocks in the Consumer Staples sector are MGP Ingredients (MGPI - Free Report) , The Hain Celestial Group (HAIN - Free Report) and Tyson Foods (TSN - Free Report) .
MGP Ingredients, the producer and supplier of distilled spirits and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1. Shares of the company have gained 34.3% in the past three months.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 55.5% and 61.4%, respectively, from the year-ago period’s reported figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.
Tyson Foods, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 25.2%, on average. Shares of the company have gained 9.6% in the past three months.
The Zacks Consensus Estimate for Tyson Foods’ current financial-year sales suggests year-over-year growth of 7.5%, while the same for EPS indicates a decline of 10.9% from the year-ago period. TSN has an expected long-term earnings growth rate of 7.5%.
The Hain Celestial, which provides various natural and organic foods as well as personal care products in North America and Europe, carries a Zacks Rank #2 at present. HAIN has a trailing four-quarter earnings surprise of 9.7%, on average. Shares of the company have moved up 2.5% in the past three months.
The Zacks Consensus Estimate for The Hain Celestial’s current financial-year EPS suggests growth of 14.5% from the year-ago period’s reported number.