J. M. Smucker (SJM) reported Q4 EPS of $2.23, $0.35 better than the analyst estimate of $1.88. Revenue for the quarter came in at $2.03 billion versus the consensus estimate of $1.98 billion.
GUIDANCE:
J. M. Smucker sees FY2023 EPS of $7.85-$8.25, versus the consensus of $8.91.
The Company provided its full-year fiscal year 2023 guidance as summarized below:
Net sales increase vs prior year | 3.5% - 4.5% | |
Adjusted earnings per share | $7.85 - $8.25 | |
Free cash flow (in millions) | $500 | |
Capital expenditures (in millions) | $550 | |
Adjusted effective tax rate | 24.2% |
The pandemic and its related implications, along with ongoing cost inflation and volatility in supply chains, continue to impact financial results and cause uncertainty and risk for the fiscal year 2023 outlook. Any manufacturing or supply chain disruption, as well as changes in consumer purchasing behavior, retailer inventory levels, and broader macroeconomic conditions, could materially impact actual results. In particular, the recent Jif® peanut butter product recall will impact our financial results for the fiscal year. While the outlook remains uncertain, the Company continues to focus on managing the elements it can control, including taking the necessary steps to minimize the impact of cost inflation, the product recall, and any additional business disruption. This guidance reflects performance expectations based on the Company's current understanding of the overall environment, inclusive of the estimated unfavorable impact of the product recall.
Net sales are expected to increase 3.5 to 4.5 percent compared to the prior year. Excluding noncomparable net sales in the prior year for the divested private label dry pet food and natural beverage and grains businesses, net sales are expected to increase approximately 6 percent at the mid-point of the guidance range. This reflects higher net pricing to recover cost inflation across multiple categories, partially offset by the anticipated volume/mix impact of price elasticity of demand, and a 2 percent unfavorable impact related to estimated manufacturing downtime and customer returns from the Jif® peanut butter product recall.
Adjusted earnings per share is expected to range from $7.85 to $8.25, including a $0.90 estimated unfavorable impact related to the Jif® peanut butter product recall. This range reflects the benefits of higher net pricing actions and shares repurchased in the prior year being more than offset by cost inflation, the anticipated volume/mix impact of price elasticity of demand, the unfavorable impact of the Jif® peanut butter product recall, and increased SD&A expenses. This guidance assumes an adjusted gross profit margin range of 33.0 to 34.0 percent, including a 1 percent estimated unfavorable impact related to the Jif® peanut butter product recall, an adjusted effective income tax rate of 24.2 percent, and 106.5 million common shares outstanding. Free cash flow is expected to be approximately $500 million, inclusive of the estimated unfavorable impact related to the Jif® peanut butter product recall, with capital expenditures of $550 million.