NEW YORK - The J.M. Smucker Co. (NYSE: NYSE:SJM) reported a robust profit in its fourth quarter, surpassing analyst expectations and sending its shares up 2.6%.
The company announced adjusted earnings per share (EPS) of $2.66, which was $0.31 higher than the consensus estimate of $2.35. However, revenue for the quarter fell short at $2.21 billion, missing the $2.24 billion estimate by analysts.
The company's net sales saw a slight decline of 1% compared to the same period last year, attributed to various divestitures and the acquisition of Hostess Brands (NASDAQ:TWNK). Despite these changes, comparable net sales, excluding these factors, increased by 3%. This growth was driven by a 2% increase from higher net price realization and a 1% increase from volume/mix.
Mark Smucker, President and CEO, highlighted the company's performance, stating, "Our fourth quarter and full-year results underscore the strength of our business and the demand for our leading brands."
He credited the company's disciplined cost management and execution for the positive results in a challenging operating environment.
"A ~15% margin driven Q4 EPS beat, although below consensus sales, notably in Pet and Sweet Baked Snacks," Jefferies analysts said in their analysis of the earnings report.
For the upcoming fiscal year 2025, J.M. Smucker anticipates an increase in net sales of 9.5 to 10.5 percent. The company's guidance for adjusted EPS is set at a range of $9.80 to $10.20, which is slightly below the analyst consensus of $10.18. The midpoint of this guidance range is $10.00, which is marginally below the consensus estimate.
Smucker's leadership remains confident in their strategy and the integration of Hostess Brands, expecting these initiatives to contribute to long-term growth and increased shareholder value.
In the fourth quarter, Smucker's gross profit rose by 15%, primarily due to the Hostess Brands acquisition and lower costs. Operating income saw a significant increase, mainly reflecting the prior year's divestiture-related loss and increased gross profit. Adjusted operating income, which excludes certain items, grew by 13%.
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