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J.M. Smucker Company (SJM)
:SJM
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JM Smucker
(NYSE:SJM)61Neutral
Positive Factors
Cost Management
Gross margin is now expected to be ~38% as coffee profitability has come in better than anticipated.
Earnings
EPS of $2.61 were above the estimate of $2.38.
Negative Factors
Impairment
SJM also recognized a ~$1bn impairment related to Hostess in the quarter.
Sales Performance
Revenues of $2,186.0m were -1.8% below consensus estimates, with an organic sales decline of -1.0% YoY.
Segment Challenges
Coffee volumes are modeled to decline by 12% with an EBIT decrease of 14%, highlighting potential challenges in the coffee segment.
JM Smucker (SJM) vs. S&P 500 (SPY)
Market Cap
$11.69B
Dividend Yield3.84%
Average Volume (3M)1.28M
Price to Earnings (P/E)22.2
Beta (1Y)0.30
Revenue Growth7.07%
EPS Growth-181.54%
CountryUS
Employees9,000
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)-2.41
Shares Outstanding106,416,620
10 Day Avg. Volume1,736,603
30 Day Avg. Volume1,283,734
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.36
Price to Cash Flow (P/CF)12.50
P/FCF Ratio12.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$119.09Price Target Upside8.42% Upside
Rating ConsensusHold
Number of Analyst Covering13
JM Smucker Business Overview & Revenue Model
Company DescriptionThe J.M. Smucker Company, commonly known as Smucker's, is an American manufacturer of food and beverage products, primarily focusing on the production of jams, jellies, and preserves. Established in 1897 and headquartered in Orrville, Ohio, the company has diversified its portfolio to include a wide array of popular consumer brands across various sectors, such as pet food, coffee, and snack products. Some of its notable brands include Folgers, Jif, and Milk-Bone. Smucker's operates in several segments, including consumer foods, pet foods, and coffee, serving markets in North America and internationally.
How the Company Makes MoneyThe J.M. Smucker Company generates revenue through the sale of its diverse range of food and beverage products. Its revenue model is primarily based on the production and distribution of branded consumer goods across its key segments: consumer foods, pet food, and coffee. In the consumer foods segment, Smucker's earns money from the sale of spreads, toppings, and packaged food products. The pet food segment contributes significantly to its earnings through popular brands like Milk-Bone and Meow Mix, catering to the growing pet care industry. The coffee segment, led by brands such as Folgers and Dunkin', generates revenue through various retail and foodservice channels. The company also benefits from strategic partnerships and licensing agreements that enhance its brand visibility and market penetration. Additionally, Smucker's invests in marketing and innovation to maintain and expand its market share, contributing to its overall financial performance.
JM Smucker Financial Statement Overview
Summary
The JM Smucker company shows a mixed financial performance. While cash flow metrics are strong, reflecting healthy cash generation, the income statement reveals challenges with profitability and revenue growth. The balance sheet is stable, but profitability concerns may pose risks going forward. Strategic improvements are necessary to enhance revenue and net income stability.Income Statement
The company's gross profit margin for TTM (Trailing-Twelve-Months) is healthy but has shown volatility. Net income has turned negative, impacting the net profit margin significantly. Revenue growth is inconsistent, with a recent decline in revenue. EBIT and EBITDA margins have decreased, indicating a reduction in operating efficiency.55
Neutral
Balance Sheet
The debt-to-equity ratio in the latest TTM period shows improvement due to reduced total debt, enhancing financial stability. However, the company's return on equity has weakened due to negative net income. The equity ratio remains stable, indicating a solid equity base relative to total assets.60
Neutral
Cash Flow
Free cash flow has seen positive growth, and the operating cash flow remains robust. The operating cash flow to net income ratio is strong due to operating efficiency, despite negative net income. The free cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings.70
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.79B | 8.18B | 8.53B | 8.00B | 8.00B | 7.80B | Gross Profit |
| 3.37B | 3.12B | 2.80B | 2.70B | 3.14B | 3.00B | EBIT |
| 332.70M | 1.31B | 1.17B | 1.02B | 1.39B | 1.22B | EBITDA |
| 758.30M | 1.68B | 1.61B | 1.63B | 1.83B | 1.73B | Net Income Common Stockholders |
| -256.70M | 744.00M | -91.30M | 631.70M | 876.30M | 779.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 62.00M | 62.00M | 1.14B | 169.90M | 334.30M | 391.10M | Total Assets |
| 20.27B | 20.27B | 14.99B | 16.05B | 16.28B | 16.97B | Total Debt |
| 8.56B | 8.56B | 4.31B | 4.49B | 4.75B | 5.62B | Net Debt |
| 8.50B | 8.50B | 3.66B | 4.32B | 4.42B | 5.23B | Total Liabilities |
| 12.58B | 12.58B | 7.70B | 7.91B | 8.16B | 8.78B | Stockholders Equity |
| 7.69B | 7.69B | 7.29B | 8.14B | 8.12B | 8.19B |
| Cash Flow | Free Cash Flow | ||||
| 815.20M | 642.90M | 717.00M | 718.80M | 1.26B | 985.50M | Operating Cash Flow |
| 1.24B | 1.23B | 1.19B | 1.14B | 1.56B | 1.25B | Investing Cash Flow |
| -121.90M | -3.96B | 262.60M | -355.50M | 311.10M | -271.50M | Financing Cash Flow |
| -1.11B | 2.14B | -964.60M | -944.50M | -1.94B | -688.70M |
JM Smucker Technical Analysis
Positive
109.84
Price Trends
105.73
Positive
109.73
Positive
111.29
Negative
Market Momentum
1.65
Negative
56.90
Neutral
76.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SJM, the sentiment is Positive. The current price of 109.84 is above the 20-day moving average (MA) of 106.00, above the 50-day MA of 105.73, and below the 200-day MA of 111.29, indicating a neutral trend. The MACD of 1.65 indicates Negative momentum. The RSI at 56.90 is Neutral, neither overbought nor oversold. The STOCH value of 76.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SJM.
JM Smucker Risk Analysis
JM Smucker disclosed 31 risk factors in its most recent earnings report. JM Smucker reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
JM Smucker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $84.45B | 19.07 | 17.12% | 2.72% | 1.18% | -5.47% | |
72 Outperform | $33.70B | 13.30 | 28.29% | 3.85% | -1.48% | 11.45% | |
70 Outperform | $12.02B | 21.96 | 14.94% | 3.63% | 6.34% | -30.58% | |
68 Neutral | $37.43B | 13.87 | 5.58% | 5.11% | -2.98% | -2.22% | |
64 Neutral | $15.87B | 20.98 | 6.59% | 3.86% | -1.84% | -5.14% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
61 Neutral | $11.69B | 22.22 | -3.72% | 3.84% | 7.07% | -181.54% |
* Consumer Defensive Sector Average
Performance Comparison
SJM
JM Smucker
109.84
-6.59
-5.66%
CPB
Campbell Soup
40.33
-1.20
-2.89%
GIS
General Mills
61.14
-1.03
-1.66%
HRL
Hormel Foods
28.90
-3.91
-11.92%
MDLZ
Mondelez International
65.29
-3.68
-5.34%
KHC
Kraft Heinz
30.98
-2.54
-7.58%
JM Smucker Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.62% | Next Earnings Date: Jun 5, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong performance in key brands like Uncrustables and Café Bustelo, along with increased earnings guidance and a strategic debt reduction plan. However, challenges such as supply chain disruptions, significant impairment charges in the Sweet Baked Snacks segment, and inflationary pressures on consumer spending were notable. While positive strides were made in brand growth and financial guidance, the negative impacts were considerable, making the sentiment balanced.Highlights
Uncrustables Brand Growth
Net sales for the Uncrustables brand grew by 15% in the quarter, driven by national advertising, distribution gains, and new merchandising investments. The brand is expected to exceed $900 million in net sales this fiscal year.
Café Bustelo Sales Increase
Café Bustelo brand grew net sales by 15%, continuing its momentum of double-digit growth. The brand gained dollar and volume share in all segments it competes in.
Increased Earnings Guidance
The company raised its full-year adjusted earnings per share guidance to $10.00, reflecting improved gross margin expansion and earlier than anticipated synergies.
Debt Reduction Plan
The company plans to prioritize debt reduction by paying down over $800 million this fiscal year and $500 million annually in the next two years.
Lowlights
Supply Chain Disruptions
Supply chain disruptions negatively impacted results, particularly in the U.S. Retail Pet Foods and Milk-Bone brands, causing a $30 million impact in the third quarter.
Sweet Baked Snacks Segment Challenges
Net sales decreased 8% for Sweet Baked Snacks, driven by declines in snack cakes and private label products. The segment also faced a $794 million impairment charge related to goodwill.
Impact of Inflation and Consumer Spending
Consumers continue to be selective in their spending due to inflationary pressures, affecting the sweet baked goods category and causing slower recovery than anticipated.
Decrease in Comparable Net Sales
Comparable net sales decreased 1%, reflecting a 5 percentage point decrease from volume mix, primarily driven by decreases for coffee and dog snacks.
Company Guidance
In the third quarter of fiscal year 2025, The J. M. Smucker Company experienced a slight decrease in net sales by 2%, with comparable net sales down by 1% as a result of supply chain disruptions and divested businesses. However, the company increased its full-year guidance for adjusted earnings per share to a range of $9.85 to $10.15 and raised its free cash flow projection to $925 million. The Uncrustables and Café Bustelo brands both saw notable 15% net sales growth, while the Milk-Bone brand faced supply chain challenges but is expected to recover in the fourth quarter. The Sweet Baked Snacks segment underperformed, leading to a $794 million goodwill impairment charge and a $208 million trademark impairment charge. Despite these challenges, adjusted earnings per share rose by 5% to $2.61, driven by improved gross margins and disciplined cost management. The company also anticipates a 7.25% increase in full-year net sales, factoring in the Hostess Brands acquisition and strategic pricing actions, particularly in the coffee segment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.