Categories AlphaGraphs, Earnings, Retail

Earnings preview: High costs could continue to be a challenge for J.M. Smucker in Q1

The J.M. Smucker Company (NYSE: SJM) is scheduled to report first quarter 2020 earnings results on Tuesday, August 27, before the market opens. Analysts expect the company to report earnings of $1.74 per share on revenue of $1.87 billion.

The topline results in the first quarter are likely to benefit from the acquisitions and partnerships that the company has forged over the past couple of months. On the flip side, divestitures of some products along with certain business divisions are likely to weigh on the numbers.

J. M. Smucker fourth quarter 2019 earnings snapshot

Higher costs remain a challenge for the company even as it continues to take measures to reduce expenses. These costs are likely to take a toll on the bottom line numbers in the first quarter. The company continues to invest in its brands across pet foods and coffee, in particular, and these investments are anticipated to drive growth going forward.

In the fourth quarter of 2019, J.M. Smucker topped earnings estimates but missed revenue expectations. Net sales rose 7% to $1.90 billion, led by the addition of Ainsworth and the company’s growth brands. Adjusted EPS grew 8% to $2.08.

Excluding certain items, net sales saw a decline and was negatively affected by foreign currency exchange and lower net price realization last quarter. The coffee and pet foods divisions recorded sales growth while the consumer foods and international divisions posted declines.

Also see: The J.M. Smucker Company Q4 2019 Earnings Conference Call Transcript

Looking ahead into full year 2020, the company expects net sales growth in the range of 1-2% and adjusted earnings in the range of $8.45-8.65 per share. On a comparable basis, net sales are expected to increase by more than 2%.

J.M. Smucker’s shares have gained 21% year-to-date and 5% in the trailing 52 weeks. The stock has an average price target of $117.

Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Earnings preview: High costs could continue to be a challenge for J.M. Smucker in Q1

Comments are closed.

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top