According to Bank of America Global Research, SJM is one of the largest U.S. food manufacturing and foodservice companies, with $8.179bn in sales and $1.636bn in sales and operating profit in FY24 across its five main sectors: U.S. Retail Frozen Handheld and Spreads, U.S. Retail Prozen Handheld and Spreet Baked Snacks and International and Away from Home. Earlier this month, SIM reported a mixed set of quarterly results. Q4 non-GAAP EPS of $2.66 easily topped the Wall Street consensus of $2.33, but revenue ...

Core Viewpoint - The J. M. Smucker Company has faced challenges following a $5.6 billion acquisition of Hostess, leading to concerns about leverage and growth potential, despite a recent recovery in share price after a significant decline [2][4][6]. Financial Performance - For fiscal year 2025, total sales are projected to increase by approximately 10%, with comparable sales growth estimated at 2% [4]. - Adjusted earnings are guided at $10.00 per share, reflecting no expected earnings growth due to high interest expenses and a substantial annual dividend payment of $4.24 [4][7]. - The company reported a net debt of $8.3 billion, with a leverage ratio of approximately 4 times EBITDA, indicating elevated debt levels [9]. Historical Context - In 2019, Smucker was valued at $7.8 billion with revenues from diverse consumer products, generating $1.7 billion in EBITDA and $1.2 billion in operating earnings [5]. - The stock price peaked at $160 in early 2023, driven more by valuation multiple inflation than by significant earnings growth, as earnings power only modestly increased to $9 per share [5][7]. Recent Developments - The company announced a divestment of certain brands for $20 million and a quarterly dividend of $1.06, translating to a 4% yield at recent lows [9]. - In February, Smucker reported a 1% increase in third-quarter sales to $2.23 billion, with adjusted operating profits rising by 28% to $457 million [9]. - The company has seen fluctuations in share price, recently trading around $112 after a peak of $130 at the start of 2024 [8]. Strategic Considerations - The acquisition of Hostess has raised questions about strategic positioning and the sustainability of high multiples paid, with pro forma net debt expected to rise to $8.6 billion [6][7]. - The company’s ability to manage leverage and integrate acquisitions will be critical for future performance, especially in a high-interest rate environment [4][6].

SJM's performance in the fourth quarter and the full year reflects the strength of its business and solid demand for its leading brands. Management attributed the company's success to superior execution and disciplined cost management, which were vital in a dynamic operating landscape. SJM's transformed portfolio, bolstered by the recent buyout of Hostess Brands, has set the stage for long-term growth across key platforms such as coffee, Uncrustables frozen sandwiches, dog snacks, cat food and sweet baked s ...

The company behind the eponymous jelly, Jif peanut butter, and Folgers coffee posted fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $2.66, above the $2.32 consensus of analysts compiled by Visible Alpha. Revenue fell 1.3% to $2.21 billion, missing forecasts. Smucker CEO Says Results Driven by 'Disciplined Cost Management' Sweet baked snacks, a specialty of Hostess Brands, made up more than 15% of Smucker's revenue in the quarter. Smucker completed its $5.6 billion purchase of Hostess Brands ...

Core Insights - Investors focus on year-over-year changes in key metrics to assess a company's performance and project stock price movements [1] Group 1: Company Performance Metrics - Smucker reported net sales of $450.50 million in U.S. Retail Frozen Handheld and Spreads, slightly above the analyst estimate of $450.15 million, with a year-over-year decline of 0.6% [2] - U.S. Retail Coffee net sales were $666.10 million, below the estimate of $671.04 million, reflecting a year-over-year decrease of 3.8% [2] - U.S. Retail Pet Foods net sales were $452.60 million, significantly lower than the estimate of $493.83 million, showing a year-over-year decline of 42.4% [2] - International and Away From Home net sales reached $299.50 million, slightly below the estimate of $301.09 million, with a year-over-year change of -1.4% [2] - Sweet Baked Snacks net sales were $337 million, compared to the average estimate of $349 million [2] - Segment profit for U.S. Retail Coffee was $210.30 million, exceeding the estimate of $195.96 million [2] - Segment profit for U.S. Retail Pet Foods was $114.10 million, below the estimate of $121.96 million [2] - Corporate administrative expenses were reported at -$89.90 million, better than the average estimate of -$99 million [2] - Segment profit for International and Away From Home was $61.10 million, surpassing the estimate of $49.44 million [2] - Segment profit for U.S. Retail Frozen Handheld and Spreads was $95.80 million, above the estimate of $90.74 million [2] Group 2: Financial Overview - Smucker reported total revenue of $2.21 billion for the quarter ended April 2024, a year-over-year decline of 1.3% [4] - Earnings per share (EPS) for the quarter were $2.66, compared to $2.64 a year ago, indicating a positive trend [4] - The reported revenue was a surprise of -1.83% compared to the Zacks Consensus Estimate of $2.25 billion [4] - The EPS surprise was +14.66% against the consensus estimate of $2.32 [4] Group 3: Stock Performance - Smucker's shares have returned -2.4% over the past month, while the Zacks S&P 500 composite has increased by +4.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Over the last four quarters, the company has surpassed consensus EPS estimates four times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. While Smucker has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Empirical research shows a strong correlation between near-term stock movements and t ...

The J. M. Smucker Company (NYSE:SJM) Q4 2024 Earnings Conference Call June 6, 2024 7:00 AM ET Company Participants Aaron Broholm - Vice President of Investor Relations Mark Smucker - President and Chief Executive Officer Tucker Marshall - Chief Financial Officer Conference Call Participants Aaron Broholm Good morning, this is Aaron Broholm, Vice President, Investor Relations for The J. M. Smucker Company. Thank you for listening to our prepared remarks on our Fiscal 2024 Fourth Quarter Earnings. After this ...

FY24 Q4 Results - Net sales were $2,205.7 million, a decrease of 1% year-over-year compared to $2,234.8 million in FY23 Q4[4] - Adjusted gross profit increased by 15% to $888.4 million, compared to $771.9 million in the same quarter last year[4] - Adjusted operating income increased by 13% to $461.6 million, compared to $408.2 million in the prior year[4] - Adjusted EPS increased by 1% to $2.66, compared to $2.64 in the prior year[4] FY25 Outlook - The company projects FY25 net sales to increase by 9.5% to 10.5%[26] - The company anticipates adjusted EPS to be between $9.80 and $10.20[26] - Free cash flow is projected to be $900 million, with capital expenditures of $450 million[26, 33] Balance Sheet and Cash Flow - Free cash flow was $297.5 million, slightly less than the $298.7 million in the prior year[13, 24] - Total debt (net) was $8,302.0 million as of April 30, 2024, compared to $3,658.4 million as of April 30, 2023[24] - EBITDA (as adjusted, TTM) was $1,704.4 million, compared to $1,592.3 million in the prior year[24] Segment Performance (FY24 Q4) - U S Retail Coffee net sales were $666.1 million, a decrease of 4% year-over-year[25] - U S Retail Frozen Handheld & Spreads net sales were $450.5 million, a decrease of 1% year-over-year[25] - U S Retail Pet Foods net sales were $452.6 million, a decrease of 42% year-over-year[25] - Sweet Baked Snacks net sales were $337.0 million[25] - International & Away From Home net sales were $299.5 million, a decrease of 1% year-over-year[25]

[Financial Highlights and Executive Summary](index=1&type=section&id=Financial%20Highlights%20and%20Executive%20Summary) [Executive Summary](index=1&type=section&id=Executive%20Summary) The J.M. Smucker Co. reported a 1% Q4 net sales decrease to $2.2 billion and a 4% full-year decrease to $8.2 billion, with comparable sales growth driven by strategic portfolio adjustments Q4 FY2024 Key Financial Metrics | Metric | Q4 FY2024 | Change vs. Q4 FY2023 | | :--- | :--- | :--- | | Net Sales | $2.2 billion | -1% | | Comparable Net Sales | N/A | +3% | | Net Income per Diluted Share | $2.30 | +140% | | Adjusted Earnings per Share | $2.66 | +1% | Full-Year FY2024 Key Financial Metrics | Metric | Full-Year FY2024 | Change vs. FY2023 | | :--- | :--- | :--- | | Net Sales | $8.2 billion | -4% | | Comparable Net Sales | N/A | +8% | | Net Income per Diluted Share | $7.13 | N/A (vs. loss) | | Adjusted Earnings per Share | $9.94 | +11% | - The company's financial results reflect the acquisition of Hostess Brands (Nov 2023) and divestitures of the Canada condiment business (Jan 2024), Sahale Snacks (Nov 2023), and certain pet food brands (Apr 2023)[1](index=1&type=chunk) - CEO Mark Smucker stated that fiscal year 2025 will be a year of investment in brands, capabilities, and employees, with clear priorities to deliver the core business, integrate Hostess, achieve synergy goals, and advance cost discipline[3](index=3&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) [Fourth Quarter Consolidated Results](index=2&type=section&id=Fourth%20Quarter%20Consolidated%20Results) Q4 net sales decreased 1% to $2.21 billion, with comparable sales up 3%, while operating income significantly improved to $406.0 million, and adjusted operating income increased 13% to $461.6 million Q4 Consolidated Financials (in millions) | Metric | Q4 2024 | Q4 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,205.7 | $2,234.8 | (1)% | | Operating Income (Loss) | $406.0 | ($633.5) | n/m | | Adjusted Operating Income | $461.6 | $408.2 | 13% | | Net Income (Loss) per Diluted Share | $2.30 | ($5.69) | 140% | | Adjusted Earnings per Share | $2.66 | $2.64 | 1% | - Comparable net sales increased **3%**, reflecting a **2 percentage point** increase from higher net pricing and a **1 percentage point** increase from favorable volume/mix, led by Smucker's® Uncrustables® and Café Bustelo®[6](index=6&type=chunk)[7](index=7&type=chunk) - Gross profit increased by **$120.9 million** (**15%**), driven by the Hostess acquisition, lower costs, and higher net pricing, which was partially offset by divestitures[8](index=8&type=chunk) - Net interest expense increased by **$62.0 million**, primarily due to debt issued to finance the Hostess Brands acquisition[10](index=10&type=chunk) - Free cash flow was **$297.5 million**, nearly flat compared to **$298.7 million** in the prior year[12](index=12&type=chunk) [Fiscal Year 2025 Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Outlook) [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) The company projects fiscal year 2025 net sales growth of 9.5% to 10.5%, with comparable net sales up 1.5% to 2.5%, and adjusted EPS forecasted between $9.80 and $10.20 FY 2025 Full-Year Guidance | Metric | FY 2025 Outlook | | :--- | :--- | | Net Sales Increase | 9.5% to 10.5% | | Comparable Net Sales Increase | 1.5% to 2.5% | | Adjusted Earnings per Share | $9.80 - $10.20 | | Free Cash Flow | ~$900 million | | Capital Expenditures | ~$450 million | | Adjusted Effective Tax Rate | 24.4% | - The net sales growth forecast includes a full year of sales from the Hostess Brands acquisition and reflects favorable volume/mix and higher net price realization[13](index=13&type=chunk) - Guidance reflects an anticipated decline of approximately **$85.0 million** in contract manufacturing sales related to the divested pet food brands[13](index=13&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) [U.S. Retail Coffee](index=3&type=section&id=U.S.%20Retail%20Coffee) U.S. Retail Coffee Q4 net sales decreased 4% to $666.1 million due to lower pricing and volume/mix, while segment profit increased 5% to $210.3 million from reduced commodity costs U.S. Retail Coffee Q4 FY24 Performance | Metric | Q4 FY24 Results | Change vs. Prior Year | | :--- | :--- | :--- | | Net Sales | $666.1M | (4)% | | Segment Profit | $210.3M | 5% | | Segment Profit Margin | 31.6% | +270bps | - Sales decline was driven by a **2 percentage point** decrease from net price realization and a **2 percentage point** decrease from volume/mix, primarily due to the Folgers® brand[14](index=14&type=chunk) - Segment profit increased due to lower commodity costs, which was partially offset by lower net prices and increased marketing and distribution expenses[14](index=14&type=chunk) [U.S. Retail Frozen Handheld and Spreads](index=4&type=section&id=U.S.%20Retail%20Frozen%20Handheld%20and%20Spreads) U.S. Retail Frozen Handheld and Spreads Q4 net sales decreased 1% to $450.5 million, but comparable sales rose 1%, while segment profit fell 7% to $95.8 million due to pre-production expenses U.S. Retail Frozen Handheld and Spreads Q4 FY24 Performance | Metric | Q4 FY24 Results | Change vs. Prior Year | | :--- | :--- | :--- | | Net Sales | $450.5M | (1)% | | Segment Profit | $95.8M | (7)% | | Segment Profit Margin | 21.3% | -150bps | - Excluding the Sahale Snacks® divestiture, net sales increased **1%**; higher net pricing (up **4 points**) was offset by lower volume/mix (down **3 points**)[15](index=15&type=chunk) - Segment profit decreased due to higher pre-production expenses for the new Smucker's® Uncrustables® manufacturing facility, increased marketing, and unfavorable volume/mix[15](index=15&type=chunk) [U.S. Retail Pet Foods](index=4&type=section&id=U.S.%20Retail%20Pet%20Foods) U.S. Retail Pet Foods Q4 net sales decreased 42% to $452.6 million due to divestitures, but comparable sales grew 11%, while segment profit decreased 22% to $114.1 million U.S. Retail Pet Foods Q4 FY24 Performance | Metric | Q4 FY24 Results | Change vs. Prior Year | | :--- | :--- | :--- | | Net Sales | $452.6M | (42)% | | Segment Profit | $114.1M | (22)% | | Segment Profit Margin | 25.2% | +670bps | - Excluding **$379.2 million** in noncomparable sales from divested brands, net sales increased **$46.5 million**, or **11%**[16](index=16&type=chunk) - Comparable sales growth was driven by an **8 percentage point** increase in volume/mix (including contract manufacturing) and a **3 percentage point** increase from higher net pricing[16](index=16&type=chunk) [Sweet Baked Snacks](index=4&type=section&id=Sweet%20Baked%20Snacks) The newly formed Sweet Baked Snacks segment, from the Hostess Brands acquisition, contributed $337.0 million in Q4 net sales and $70.2 million in segment profit Sweet Baked Snacks Q4 FY24 Performance | Metric | Q4 FY24 Results | | :--- | :--- | | Net Sales | $337.0M | | Segment Profit | $70.2M | | Segment Profit Margin | 20.8% | - This segment's results are from the Hostess Brands acquisition, completed on November 7, 2023; prior year results are not provided[1](index=1&type=chunk)[17](index=17&type=chunk) [International and Away From Home](index=4&type=section&id=International%20and%20Away%20From%20Home) International and Away From Home Q4 net sales decreased 1% to $299.5 million, but comparable sales grew 8%, while segment profit surged 28% to $61.1 million International and Away From Home Q4 FY24 Performance | Metric | Q4 FY24 Results | Change vs. Prior Year | | :--- | :--- | :--- | | Net Sales | $299.5M | (1)% | | Segment Profit | $61.1M | 28% | | Segment Profit Margin | 20.4% | +470bps | - Excluding divestitures and foreign currency effects, net sales increased **8%**, driven by a **5 percentage point** increase in net price realization and a **3 percentage point** increase in volume/mix[19](index=19&type=chunk) - Segment profit growth was primarily due to higher net pricing, lower costs, and favorable volume/mix[19](index=19&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statements of Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) FY2024 net sales decreased 4% to $8.18 billion, while gross profit increased 11% to $3.12 billion, and net income recovered to $744.0 million or $7.13 per diluted share FY 2024 vs. FY 2023 Income Statement Highlights (in millions) | Metric | Year Ended April 30, 2024 | Year Ended April 30, 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $8,178.7 | $8,529.2 | (4)% | | Gross Profit | $3,115.4 | $2,801.8 | 11% | | Operating Income | $1,305.8 | $157.5 | n/m | | Net Income (Loss) | $744.0 | ($91.3) | n/m | | Net Income (Loss) per Diluted Share | $7.13 | ($0.86) | n/m | [Unaudited Condensed Consolidated Balance Sheets](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of April 30, 2024, total assets increased to $20.27 billion and total liabilities to $12.58 billion, primarily due to the Hostess Brands acquisition and related debt Balance Sheet Highlights (in millions) | Metric | April 30, 2024 | April 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $62.0 | $655.8 | | Total Current Assets | $1,966.9 | $2,858.7 | | Goodwill | $7,649.9 | $5,216.9 | | Other intangible assets - net | $7,255.4 | $4,429.3 | | Total Assets | $20,273.7 | $14,991.4 | | Total Current Liabilities | $3,761.1 | $1,986.7 | | Long-term debt, less current portion | $6,773.7 | $4,314.2 | | Total Liabilities | $12,579.8 | $7,700.6 | | Total Shareholders' Equity | $7,693.9 | $7,290.8 | [Unaudited Condensed Consolidated Statements of Cash Flow](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) FY2024 net cash from operations was $1.23 billion, while investing activities used $3.96 billion, primarily for the Hostess acquisition, leading to a $593.8 million net decrease in cash FY 2024 Cash Flow Highlights (in millions) | Metric | Year Ended April 30, 2024 | Year Ended April 30, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,229.4 | $1,194.4 | | Net Cash Provided by (Used for) Investing Activities | ($3,964.6) | $256.2 | | Net Cash Provided by (Used for) Financing Activities | $2,141.6 | ($964.6) | | Net (decrease) in cash and cash equivalents | ($593.8) | $485.9 | - Free cash flow for the full year was **$642.9 million**, down from **$717.0 million** in the prior year[4](index=4&type=chunk)[45](index=45&type=chunk) [Non-GAAP Financial Measures](index=13&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company reconciles non-GAAP measures like comparable net sales and adjusted EPS to provide clearer performance insights, with Q4 adjusted operating income up 13% and full-year comparable net sales up 8% - Non-GAAP measures are used to enhance understanding of performance by excluding items like amortization, special project costs, gains/losses on divestitures, and derivative impacts[35](index=35&type=chunk)[36](index=36&type=chunk) FY2024 Net Sales Reconciliation (in millions) | Description | Amount | | :--- | :--- | | Net Sales (GAAP) | $8,178.7 | | Less: Hostess Brands acquisition | ($637.3) | | Less: Impact of Divestitures | $1,565.5 | | Less: Foreign currency exchange | $6.8 | | **Net Sales Excluding Items (Comparable)** | **$7,548.2** | FY2024 Adjusted EPS Reconciliation | Description | Per Share Amount | | :--- | :--- | | Net Income (Loss) per Share (GAAP) | $7.13 | | Amortization | $1.83 | | Loss on divestitures | $0.12 | | Special project & other costs | $1.47 | | Other Adjustments | $0.39 | | **Adjusted Earnings per Share** | **$9.94** |

The J. M. Smucker Company (SJM) is likely to register top-line growth when it reports fourth-quarter fiscal 2024 earnings on Jun 6. The Zacks Consensus Estimate for revenues is pegged at $2.25 billion, which suggests an increase of 0.5% from the prior-year quarter's reported figure. The consensus mark for quarterly earnings has decreased by 1 cent in the past 30 days to $2.32 per share. This indicates a decline of 12.1% from the year-ago quarter's reported figure. SJM has a trailing four-quarter earnings su ...