June 9 - J.M. Smucker, the packaged foods company behind Folgers coffee and Jif peanut butter, said on Tuesday that it expects full-year adjusted earnings to be between $9.75 and $10.25 per share, with the midpoint above analysts' average estimate of $9.79 per share as compiled by LSEG.
Shares moved higher in premarket trading, gaining about 3% after the company released quarterly results and its outlook.
For the quarter, Smucker posted an adjusted profit of $2.77 per share, outpacing analysts' estimate of $2.64 per share. The company reported quarterly net sales of approximately $2.27 billion for the period ended April 30, an increase of about 6% from the year-ago quarter and marginally above the analysts' average estimate of $2.26 billion.
Smucker attributed much of the quarterly strength to higher pricing and persistent demand for at-home consumption. Its U.S. retail coffee business saw sales rise roughly 12% year-over-year, driven in part by a 21 percentage point increase in pricing. Across the company, overall quarterly net sales reflected a roughly 10 percentage point boost from pricing that offset a roughly 4 percentage point decline in volume.
Despite the quarterly beat and the stronger profit outlook, the company signaled a more cautious view on full-year top-line performance. Smucker now expects annual net sales to decline between 3% and 4% versus the prior year. That outlook contrasts with analysts' projections, which had anticipated annual net sales to rise by about 1% to $9.10 billion.
The company said it continues to navigate a "dynamic and evolving external environment, including geopolitical, economic and policy changes," and pointed to shifting consumer behavior as an important factor. Management highlighted that, in addition to weakness in discretionary spending, consumers are increasingly turning to lower-cost private label products and healthier food options. The company also noted the rapid adoption of GLP-1 weight loss drugs as accelerating the shift in consumer preferences toward healthier choices.
Smucker's quarterly results followed broader packaged-food industry commentary on consumer strain. The report referenced a recent move by another packaged food maker to reaffirm its annual forecast after an earlier reduction and that company warned that a war-driven surge in fuel prices has weighed on consumer sentiment.
Investors were also presented with an earnings valuation context that compares Smucker's results against models and market expectations. The company emphasized solid pricing execution in key categories, which supported margins and allowed adjusted earnings to exceed consensus despite volume pressure.
Investor takeaway
- Smucker beat quarterly profit expectations and issued a full-year adjusted EPS range with a midpoint above analysts' estimates.
- Pricing - particularly a sizable increase in coffee prices - was the primary driver of quarterly sales growth, offsetting a decline in volume.
- Management cautioned that annual net sales are expected to decline 3% to 4%, as consumers shift toward private labels and healthier options amid broader external pressures.