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Smuckers hits a five-year high following its second-quarter earnings

on Nov 21, 2022
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  • J.M. Smucker reports market-beating results for its Q2 and raises guidance.
  • CEO Mark Smucker discussed the earnings report on CNBC's "Squawk Box".
  • The food & beverage company is now up over 20% versus its YTD low.

J.M. Smucker Co. (NYSE: SJM) is trading near a six-year high on Monday after the food and beverage company reported market-beating results for its second financial quarter.

Highlights from CEO’s interview with CNBC

Investors are also responding positively to the raised guidance. Smuckers is now calling for a 6.5% annualised increase in sales this year on $8.35 to $8.75 of adjusted per-share earnings. On CNBC’s “Squawk Box”, CEO Mark Smucker said:

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We continue to be laser focused on our strategy. We’ve been very thoughtful about reshaping our portfolio. We’ve made a few divestitures and ensuring that the resources we have in dollars and people, we’re putting against our biggest bets.

Versus its June low, Smuckers stock is now up more than 20%. According to the Chief Executive, much of the second-quarter strength was related to strong demand and prices increases that helped offset the higher input costs.

We’ve been taking a very prudent approach to how we pass along pricing. We offer products and brands across the entire value spectrum, and so consumers can find something that fits their budget and their needs across our entire portfolio.

Smuckers’ second-quarter financial highlights

  • Net income printed at $191.1 million versus the year-ago $206 million
  • Per-share earnings also slipped a little bit from $1.90 to $1.79
  • Adjusted for one-time items, EPS was $2.40 as per the press release
  • Sales went up 7.6% on a year-over-year basis to $2.21 billion
  • FactSet consensus was $2.18 of adjusted EPS on $2.17 billion in sales

Cost of sales was 12.4% higher than the same quarter last year, resulting in a 290 basis points hit to gross margin.

Despite strong year-to-date performance amidst a challenging macro environment, Wall Street still rates Smuckers at “underweight” – something to consider if you want to invest in this stock.

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