JM Smucker Beats Earnings and Sales Expectations, But Lowers Full Year Earnings Outlook

Shares of JM Smucker Co. sjm,
fell 0.5% in premarket trading Thursday after the branded food company reported fiscal first-quarter profit and revenue that beat forecasts but lowered its full-year profit outlook amid gross margin pressure. Net income for the quarter ended July 31 decreased to $153.9 million, or $1.42 per share, from $273.0 million or $2.08 per share in the same period a year ago. Excluding one-time items, adjusted earnings per share came in at $1.90, above the FactSet consensus of $1.89. Revenue fell 5.8% to $1.86 billion, beating the FactSet consensus of $1.80 billion. Cost of products sold increased 1.9% to $1.22 billion, pushing gross margin down from 39.3% to 34.4%. “Our industry is still going through a period of significant supply chain volatility, disruption and cost inflation,” said Chief Executive Mark Smucker. “In the short term, we expect higher raw material and logistics cost increases.” For fiscal 2022, the company improved its revenue growth outlook to negative 1.5% to negative 2.5% from negative 2% to negative 3%, but lowered its adjusted EPS guidance to $8.25 to $8.65 from $8 .70 to $9.10 as gross margin is expected to increase. fall to 36.0% from 39.2% in fiscal 2021. The FactSet EPS consensus is $8.89. The stock is down 5.4% in the past three months through Wednesday, while the S&P 500 SPX,
won 7.2%.