A month has gone by since the last earnings report for Smucker (SJM Quick QuoteSJM - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Smucker due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Smucker Q2 Earnings Beat Estimates on Improved Volume/Mix

The J. M. Smucker Company posted robust second-quarter fiscal 2025 adjusted earnings of $2.76 per share improved 7% year over year and surpassed the Zacks Consensus Estimate of $2.51. Net sales amounted to $2,271.2 million, which jumped 17% year over year while beating the Zacks Consensus Estimate of $2,267 million. Excluding acquisitions, divestitures, as well as currency movements, net sales grew 2%. The uptick in comparable net sales can be attributed to the higher volume/mix (up 2%) and net price realization (up 1%).

The gross profit went up 22% due to the improved volume mix, better net price realization, reduced costs and a positive impact of the Hostess Brands acquisition, partly negated by the impact of divestitures. The adjusted gross profit grew 17%. The adjusted operating income jumped 27% year over year to $490.6 million.

Decoding SJM’s Segmental Performance

U.S. Retail Pet Foods: The segment’s sales fell 4% to $445.4 million. The volume/mix and net price realization had a two-percentage-point adverse impact each on net sales. The segment’s profit surged 25% to $121.4 million.

U.S. Retail Coffee: The segment’s sales grew 3% to $704 million, backed by higher net price realization, while volume/mix remained neutral. The segment’s profit rose 19% to $202.7 million.

U.S. Retail Frozen Handheld and Spreads: Sales in the segment increased 5% to $485.2 million. Excluding noncomparable sales in the year-ago period related to the divested Sahale Snacks business, net sales grew 6%. The volume/mix boosted net sales by 8%, and the net price realization lowered net sales by 2%. The segment’s profit tumbled 10% to $116.1 million.

Sweet Baked Snacks: Sales in the segment came in at $315.5 million, with the segment profit amounting to $70.6 million in the quarter.

International and Away from Home: Net sales dropped 1% to $321.1 million. Excluding the impact of noncomparable net sales associated with divestitures and currency movements, net sales grew 6%. The volume/mix had a two-percentage-point positive effect, and the net price realization had a positive impact of four percentage points on net sales. The segment’s profit increased 13% to $68 million.

What to Expect From SJM in Fiscal 2025?

For fiscal 2025, SJM anticipates comparable net sales to increase by nearly 1-2% compared with the earlier view of 0.5-1.5%. This view also includes a decrease of $100 million contract manufacturing sales associated with the divested pet food brands.

Fiscal 2025 net sales are still anticipated to increase 8.5-9.5%. The adjusted EPS for fiscal 2025 is now envisioned in the $9.70-$10.10 band, up from the $9.60-$10 band range expected before. The company recorded an adjusted EPS of $9.94 in fiscal 2024. The bottom-line guidance takes into account an adjusted gross profit margin of 37.5 and a roughly 9% rise in SD&A expenses. The company had earlier expected the adjusted gross margin to be 37.5%.

Management’s fiscal 2025 guidance does not incorporate any effects from the previously announced deal to offload the Voortman business. This transaction, anticipated to close in the third quarter of fiscal 2025, is expected to impact fiscal 2025 net sales by approximately $65 million and adjusted earnings per share by around 10 cents. The company plans to allocate the proceeds toward debt reduction and projects that the earnings impact will remain negligible to the fiscal 2025 adjusted EPS guidance range.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Smucker has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Smucker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Smucker is part of the Zacks Food - Miscellaneous industry. Over the past month, TreeHouse Foods (THS Quick QuoteTHS - Free Report) , a stock from the same industry, has gained 0.8%. The company reported its results for the quarter ended September 2024 more than a month ago.

TreeHouse reported revenues of $839.1 million in the last reported quarter, representing a year-over-year change of -2.8%. EPS of $0.74 for the same period compares with $0.57 a year ago.

For the current quarter, TreeHouse is expected to post earnings of $0.97 per share, indicating a change of +26% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.

TreeHouse has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.