J.M. Smucker is scheduled to release its fiscal second-quarter results before the market opens on Tuesday. Here are the key details to watch for:
According to estimates from five analysts polled by FactSet, the maker of Folgers coffee and Smucker's jam is expected to report a profit of $232 million for the quarter ended Oct. 31. This is an increase from $191.1 million in the same period last year.
Stripping out one-time items, adjusted earnings are projected to be $2.47 a share, based on a consensus of 11 analysts surveyed by FactSet.
Analysts predict that the Orrville, Ohio-based company will announce $1.94 billion in revenue for the quarter, down from $2.21 billion a year ago.
During the quarter, Smucker's stock fell 24.4% and recently traded at $112.01.
Key Focus Areas
During the earnings announcement, investors will be closely watching the following:
1. Impact of Hostess Brands Acquisition
Smucker recently acquired Hostess Brands and plans to utilize it as the foundation for its Sweet Baked Snacks business area. Analysts will be interested in seeing how this addition will affect the company's full-year guidance.
2. Comparison with Kellanova's Performance
Kellanova, formerly known as Kellogg until its spinoff, experienced lower earnings and sales in its most recent quarter due to consumer resistance to higher prices. Investors will be looking for any similar trends in Smucker's results.
3. Upside Potential in the U.S. Food Sector
Bernstein analysts believe that Smucker's stock was oversold by investors due to concerns regarding the popularity of weight-loss drugs and its impact on the food sector. However, the analysts recently upgraded Smucker's stock, stating that the near-term performance of the U.S. food sector now has upside potential.