Smucker's CEO reveals his outlook on post-pandemic demand

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:

Smucker’s “Uncrustables” was up 33% in Q3 marking the 30^th 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.