Coffee Service

JM Smucker reaffirms 2021 outlook

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December 10, 2020

The J.M. Smucker Co., which owns Folgers and other consumer product brands, has reaffirmed its fiscal year 2021 outlook and shared long-term financial targets, according to a press release.

"We are implementing a focused strategic plan, including reshaping our portfolio, streamlining our organization and updating our commercial model to transform how we deliver for our customers and consumers, as well as deliver sustainable shareholder value," Mark Smucker, president and CEO, said in the release.

The four pillars of operational priorities for the next 12 to 18 months include:

• Driving commercial excellence: Transformation of both the marketing and sales model to increase focus on both the consumer and the customer, including the creation of a dedicated pet food sales organization.
• Streamlining cost infrastructure: A continued commitment to productivity and a focus on minimizing expenses that do not support sales or profit growth, generating $50 million of annual cost savings in each of the next three fiscal years.
• Reshaping portfolio: Reprioritization of investments in the areas of highest growth potential and exit of brands and businesses that are not consistent with the company's long-term strategic focus.
• Unleashing the organization to win: Delayering and streamlining the organization to improve decision making and achieve greater agility.

The company provided long-term annual growth targets, including:

• Net sales growth of 2%.
• Operating income growth of 5%.
• Adjusted EPS growth of 8%
• Total shareholder return of 10% or greater.

The company reiterated its fiscal year 2021 financial guidance of net sales growth to be flat to up 1%, adjusted earnings per share to range from $8.35 to $8.65, and free cash flow to range from $975 million to $1.025 billion. The guidance reflects the removal of five months of divested net sales of approximately $100 million and the removal of adjusted earnings per share of 20 cents, excluding any potential benefit from the use of proceeds from the sale.