Zinger Key Points
- J.M. Smucker beats earnings and revenue estimates, with a 1% rise in quarterly revenues.
- Sales decline in U.S. Retail Coffee and Pet Foods divisions, driving a 39% slump in net sales for the latter.
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The J.M. Smucker Company SJM shares are trading lower on Tuesday.
The company reported third-quarter adjusted earnings per share of $2.48, beating the analyst consensus of $2.27.
J.M. Smucker registered quarterly revenues of $2.229 billion, marginally beating the consensus estimate of $2.220 billion. Revenues rose 1% year over year.
U.S. Retail Coffee net sales fell 1%, primarily driven by list price decreases. U.S. Retail Frozen Handheld and Spreads net sales rose 1%, primarily reflecting a favorable impact of lapping customer returns. U.S. Retail Pet Foods net sales slumped 39% year over year.
Gross profit increased by 9% owing to the favorable impact of the acquisition of Hostess Brands, higher net price realization, favorable volume/mix, and lower costs. Adjusted gross profit rose 12%.
Operating income decreased 6% year over year driven by a $98.3 million increase in special project costs, reflecting integration costs related to the acquisition of Hostess Brands.
Outlook: The company expects FY24 adjusted EPS in the range of $9.45 – $9.65 (prior view: $9.25 – $9.65) versus analyst consensus of $9.52.
Net sales are expected to decrease approximately 3.6% compared to the prior year, reflecting net sales of approximately $8.22 billion vs. $8.24 billion estimate (prior view: $8.25 billion at the mid-point).
Price Action: SJM shares are trading lower by 2.46% to $122.17 on the last check Tuesday.
Photo by Willis Lam Via Flickr
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