Coffee Service

JM Smucker suffers Q1 2021 sales and earnings declines

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August 26, 2021

The J.M. Smucker Co., which owns Folgers and other consumer product brands, reported sales and earnings declines for the first quarter of 2021 ending July 31, 2021, due to pandemic related factors, according to an earnings report.

Company net sales decreased 6% from $1.9 billion in Q1 2020 to $1.86 billion in Q1, 2021.

Operating income fell 28% from $361.1 million to $259.4 million in the comparable quarters, while net income per common share on a diluted basis fell 32% from $2.08 to $1.42, and adjusted earnings per share on a diluted basis fell 20% from $2.37 to $1.90.

The pandemic and related implications, along with cost inflation and volatility in supply chains, continued to impact financial results and cause uncertainty and risk for the fiscal year 2022 outlook.

Net sales are expected to decrease 1.5% to 2.5% for the full year compared to the prior year, which incorporates an impact of $355.6 million related to the divested Crisco and Natural Balance businesses. On a comparable basis, net sales are expected to increase approximately 2.5% at the mid-point of the net sales guidance range, reflecting a deceleration in at-home consumption trends, more than offset by higher net pricing across multiple categories, continued double-digit net sales growth for the Smucker's Uncrustables brand, and a recovery in away-from-home channels.

Adjusted earnings per share is expected to range from $8.25 to $8.65, based on 108.3 million shares outstanding.

The quarterly EPS of $1.90 beat analyst estimates of $1.88, according to Zacks.

Shares traded today at $123.49 against a 52-week range of $108.10-$140.65.

"Our first quarter results reflected organic net sales growth, while lapping double-digit growth in the prior year, and continued to demonstrate consumers' desire for our brands, while earnings were in line with our expectations," Mark Smucker, president and chief executive officer, said in a prepared statement. "Our industry continues to navigate a period of significant supply chain volatility, disruption and cost inflation. In the near term, we expect to experience higher raw material and logistics cost increases."

Retail coffee net sales decreased $27.7 million in Q1, 2021. Net price realization reduced net sales by 3 percentage points, reflecting increased trade spend related to the lapping of suspended promotions in the prior year.

Retail consumer foods net sales decreased $53.6 million in Q1, 2021, while international away-from-home net sales increased $12.1 million.

For an update on how the coronavirus pandemic affected convenience services, click here.