The J. M. Smucker Company (SJM) engages in the manufacture and marketing of branded food products worldwide. The company’s primary products include coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, and canned milk.
Strong organic sales growth, product innovation and constant efforts to expand through acquisitions have remained the company’s strong points over the past several quarters. However, the company remains concerned about the declining coffee volumes due to increased prices of Folgers and Dunkin' Donuts branded coffee products, as a result of hike in coffee costs since Jan 2014. The performance of the K-Cup business has also been sluggish since second quarter fiscal 2014 due to an increase in the number of competitors, weakness in Millstone K-cup packs and due to the recent increase in K-cup prices resulting from higher green coffee costs.
Investors should also note the recent earnings estimate revisions for SJM, as the consensus estimate has been declining slightly over the past 30 days. SJM has a mixed history in earnings season. SJM has delivered positive surprise in two of the last four quarters, with one in-line and one negative surprise, making for an average positive surprise of 1.20%.
Currently, SJM has a Zacks Rank #3 (Hold), but that could definitely change following Smucker’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: SJM posted earnings of 98 cents per share, slightly missing our consensus of 99 cents per share. Investors should note that these figures take out stock option expenses.
Revenue: SJM posted revenues of $1.45 billion. This exceeded our consensus estimate of $1.32 billion.
Key Stats to Note: The acquired Big Heart business contributed $244.5 million and the Sahale business contributed $10.0 million to net sales in the fourth quarter of 2015. Net price realization was 2 percentage points higher and sales mix was also favorable, despite declines in coffee volumes. Excluding acquisitions and currency impact, sales declined 2% in the reported quarter.
Stock Price: Inactive in pre-market trading.
Check back later for our full write up on this SJM earnings report later!
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