J.M. Smucker gives stronger guidance for fiscal 2020 on Coronavirus driven stockpiling

J.M. Smucker (NYSE: SJM) gave a stronger than expected guidance for its annual profit and sales on Monday. The company cited a surge in demand for its packaged foods including Jif peanut butter as consumers continue to stockpile amidst the Coronavirus pandemic for the upbeat guidance.

The rising uncertainty ascribed to COVID-19 and strict social distancing measures have increased sales for retailers and consumer goods companies as demand for essential items including grocery surges unprecedently higher.

J.M. Smucker Estimates A 1% Decline In Annual Sales

J.M. Smucker also expressed plans of allocating order volumes to make sure that all of its retail partners get consistent supply. Companies like Costco and Kroger have recently restricted individual customers to a limited number of items that they can buy.

The Folgers coffee maker said that it estimates a 1% decline in annual sales in the fiscal year that will end on 30^th April 2020. In a previous forecast, the company had anticipated a broader 3% decline. Smucker also added that the increase in demand has already hit its peak and is now beginning to moderate.

As per the previous guidance, Smucker expected to make £6.55 to £6.71 of adjusted earnings per share. Thanks to an increase in production at its manufacturing factories combined with low costs, the company added, it now forecasts its adjusted EPS (earnings per share) to print higher than £6.71 per share.

The Ohio-based company also expects to top its previous forecast of £687 million of free cash flow.

J.M. Smucker Wins Food Engineering Plant Of The Year 2020 Award

In separate news, J.M. Smucker won the award of the Food Engineering Plant of the Year 2020 last week. Smucker’s Uncrustables are widely popular in the U.S for casual trips to the beach and school lunches etc.

Following stronger guidance, J.M. Smucker climbed a little over 1% in after-hours trading on Monday. At £100 per share, the company is currently around 20% up year to date in the stock market.

J.M. Smucker’s performance was also reported moderately upbeat in 2019 with an annual gain of more than 10%.

At the time of writing, the company is valued at £11.22 billion and has a price to earnings ratio of 22.19.