J. M. Smucker (NYSE: SJM) reported Q1 EPS of $1.90, $0.06 better than the analyst estimate of $1.84. Revenue for the quarter came in at $1.86 billion versus the consensus estimate of $1.77 billion.

GUIDANCE:

J. M. Smucker sees FY2021 EPS of $8.25-$8.65, versus the consensus of $8.84.

The Company updated its full-year fiscal 2022 guidance as summarized below:

The pandemic and related implications, along with cost inflation and volatility in supply chains, continue to impact financial results and cause uncertainty and risk for the fiscal year 2022 outlook. Any manufacturing or supply chain disruption, as well as changes in consumer mobility and purchasing behavior, retailer inventory levels, and macroeconomic conditions could materially impact actual results. While the broader 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 and any business or labor disruption. This guidance reflects performance expectations based on the Company's current understanding of the environment.

Net sales are expected to decrease 1.5 to 2.5 percent 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 percent 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. The net sales guidance reflects incremental net pricing actions in response to higher costs versus previous expectations, offset by reduced volume/mix, inclusive of anticipated price elasticity and supply disruption for internationally sourced pet food products.

Adjusted earnings per share is expected to range from $8.25 to $8.65, based on 108.3 million shares outstanding. The earnings guidance reflects the decrease in net sales, adjusted gross profit margin of approximately 36.0 percent, and SD&A expenses down approximately 6 percent compared to the prior year. The adjusted effective income tax rate is expected to be 24.0 percent, and free cash flow is expected to be approximately $800 million, with capital expenditures of $380 million.

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