The J. M. Smucker Co. (SJM) Becomes Jammed Up on Weaker Q3 Volumes, Lowered FY12 Guidance
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Price: $103.66 +0.41%
EPS Growth %: +17.3%
Financial Fact:
Dividends declared per common share: 0.52
Today's EPS Names:
CO, JW-A, FDS, More
EPS Growth %: +17.3%
Financial Fact:
Dividends declared per common share: 0.52
Today's EPS Names:
CO, JW-A, FDS, More
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The J. M. Smucker Company (NYSE: SJM) shares are trading down more than 7 percent in pre-market trading amid a concerning third-quarter report and FY12 guidance which was lowered to well below the Street.
Net sales increased 12 percent year over year to $1.47 billion and topped the Street’s consensus of $1.54 billion. The overall impact of sales mix was favorable primarily due to K-Cups.
Selling, distribution, and administrative expenses rose 5 percent year over year, but decreased as a percentage of net sales from 16.3 percent to 15.3 percent. Marketing expenses also grew 4 percent over the same period.
Gross profit declined from 36.1 percent of total sales in the third quarter of 2011 to 31.7 percent this quarter.
Excluding special project costs in both periods, operating income decreased $8.1 million, or 3 percent, and declined from 18.4 percent of net sales in 2011 to 15.9 percent in 2012.
Non-GAAP income per diluted share was $1.22 and $1.27 for the third quarters of 2012 and 2011, respectively. The Street was forecasting earnings of $1.41 per share. A greater-than-anticipated decline in overall sales volume was the primary driver of the decrease in income per diluted share in the third quarter of 2012, compared to 2011.
The J. M. Smucker Company ended the quarter with $370.43 million in cash and cash equivalents, down from $549.58 million year over year.
"Although sales increased 12 percent for the quarter, we were disappointed with overall volume and its impact on earnings," commented Vince Byrd, President and Chief Operating Officer. "Despite having strong merchandising programs in place for the holiday period, our volume was lower than expected as a result of our higher price points coupled with lower consumer demand across the food industry. Looking forward, we are encouraged that our share of market remains strong and that commodity costs are moderating, providing opportunities to adjust pricing and promotional activities to better meet the needs of our consumers."
The company lowered its net sales and earnings guidance for the year as a result of lower volumes and sales. Net sales for the full year are estimated at $5.5 billion. Full year non-GAAP income per diluted share is expected to range from $4.60 to $4.65, down from the company's previous estimate of $4.90 to $5.00. While Smucker's current estimates reflect the expected net sales contribution from the Sara Lee business, its contribution to earnings is not expected to be material.
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Net sales increased 12 percent year over year to $1.47 billion and topped the Street’s consensus of $1.54 billion. The overall impact of sales mix was favorable primarily due to K-Cups.
Selling, distribution, and administrative expenses rose 5 percent year over year, but decreased as a percentage of net sales from 16.3 percent to 15.3 percent. Marketing expenses also grew 4 percent over the same period.
Gross profit declined from 36.1 percent of total sales in the third quarter of 2011 to 31.7 percent this quarter.
Excluding special project costs in both periods, operating income decreased $8.1 million, or 3 percent, and declined from 18.4 percent of net sales in 2011 to 15.9 percent in 2012.
Non-GAAP income per diluted share was $1.22 and $1.27 for the third quarters of 2012 and 2011, respectively. The Street was forecasting earnings of $1.41 per share. A greater-than-anticipated decline in overall sales volume was the primary driver of the decrease in income per diluted share in the third quarter of 2012, compared to 2011.
The J. M. Smucker Company ended the quarter with $370.43 million in cash and cash equivalents, down from $549.58 million year over year.
"Although sales increased 12 percent for the quarter, we were disappointed with overall volume and its impact on earnings," commented Vince Byrd, President and Chief Operating Officer. "Despite having strong merchandising programs in place for the holiday period, our volume was lower than expected as a result of our higher price points coupled with lower consumer demand across the food industry. Looking forward, we are encouraged that our share of market remains strong and that commodity costs are moderating, providing opportunities to adjust pricing and promotional activities to better meet the needs of our consumers."
The company lowered its net sales and earnings guidance for the year as a result of lower volumes and sales. Net sales for the full year are estimated at $5.5 billion. Full year non-GAAP income per diluted share is expected to range from $4.60 to $4.65, down from the company's previous estimate of $4.90 to $5.00. While Smucker's current estimates reflect the expected net sales contribution from the Sara Lee business, its contribution to earnings is not expected to be material.
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