Smucker’s Q1 Earnings Beat, but Weak Revenue Growth Sends Shares Lower

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August 23, 2016 8:24am NYSE:SJM

Food and beverage products maker J M Smucker Co (NYSE:SJM) this morning posted better-than-expected fiscal Q1 earnings results, but steeply negative revenue growth sent investors rushing for the exits.


The Orrville, OH-based company reported adjusted Q1 net income of $1.86 per share, easily beating Wall Street estimates for $1.74. Revenue plunged 7% from last year to $1.82 billion, however, missing analyst’s view for $1.89 billion.

Looking ahead, SJM backed its previously-announced full-year 2017 EPS forecast of $7.60 to $7.75, which straddles analyst estimates of $7.70 per share for the year. The company lifted its sales outlook from a prior -1% to a new range of -1% to 0%. That new forecast is in-line with Wall Street’s view.

Other notes from the report included:

  • Q1 gross profit fell 1% from last year.
  • U.S. retail coffee sales fell 9%.
  • U.S. retail consumer foods sales fell 8%.
  • U.S. retail pet food sales fell 6%.
  • International and food service sales fell 3%.

From the press release:

“We are pleased with the start to our fiscal year as we delivered record first quarter earnings per share, which exceeded our expectations,” said Mark Smucker, Chief Executive Officer. “Despite the impact of deflation on the top line, we remain on track to achieve our original expectations for full-year earnings per share. We are strengthening a great portfolio of brands by investing in new capabilities and on-trend platforms that are essential to long-term sales growth. At the same time, we are focused on sustainable cost reductions that are delivering significant bottom-line benefits. For these reasons, we remain confident in achieving our long-term objectives and delivering continued shareholder value.”

SJM-2016-08-23

J M Smucker shares fell $6.98 (-4.47%) to $149.25 in premarket trading Tuesday. Prior to today’s report, SJM had gained nearly 27% year-to-date, nearly quadrupling the return of the S&P 500 index during the same period.


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