J.M. Smucker (NYSE: SJM) on Tuesday said its profit and revenue came in better-than-expected in the fiscal third quarter. Shares jumped 4.0% this morning after the food company raised its guidance for the full year.
CEO Smucker discussed earnings on CNBC’s ‘Squawk Box’
Smucker benefitted greatly from the COVID-19 crisis that restricted people to their homes, but CEO Mark Smucker is confident that demand will remain strong even after the pandemic. On CNBC’s “Squawk Box”, he said:
We believe folks are going to continue to work from home more than they did in the past even as offices open up. We all are going to be spending more time working from home than we did pre-pandemic. So, that certainly bodes well for all of our categories.
Smucker’s “Uncrustables” was up 33% in Q3 marking the 30th consecutive quarter of growth. Brands including Dunkin and Bustelo also noted double-digit growth, but K-cups took the lead with about a 250% increase in quarterly sales.
Q3 financial performance
Smucker’s net income dropped to $206 million ($1.90 per share) from last year’s $230.8 million ($2.02 per share). Adjusted for one-time items, however, it earned a higher $2.43 per share versus the year-ago figure of $2.39 per share.
The Ohio-based company generated $2.05 billion in sales, representing an annualised growth of 0.8%. According to FactSet, experts had forecast $2.24 of adjusted EPS on $2.01 billion in sales.
Other notable figures and future guidance
Gross margin slid from 40.2% to 34.7% on a 10.1% increase in cost of sales. U.S. Retail Pet Foods and Consumer Foods sales were down 1.0% and 8.0%, respectively – offset by an 8.0% YoY growth in coffee sales.
For the full financial year, Smucker now forecasts $8.35 to $8.75 of adjusted EPS on up to 0.5% sales growth, as per the earnings press release.
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