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Oct 31, 2020
Smucker Q2 2021 Earnings Report
Smucker's performance was driven by strong sales momentum in the U.S. Retail Consumer Foods and U.S. Retail Coffee segments, benefiting from elevated at-home consumption trends.
Key Takeaways
The J.M. Smucker Co. reported a net sales increase of 4 percent and adjusted earnings per share increase of 6 percent. The company also increased its full-year fiscal 2021 net sales, adjusted earnings per share, and free cash flow outlook.
Net sales increased by 4 percent, primarily driven by growth in U.S. Retail Consumer Foods and U.S. Retail Coffee segments.
Net income per diluted share was $2.02; adjusted earnings per share was $2.39, a 6 percent increase.
Cash from operations increased by 69 percent to $378.7 million.
Free cash flow was $326.3 million, compared to $160.6 million in the prior year.
Smucker
Smucker
Smucker Revenue by Segment
Revenue by Segment
U.S. Retail Coffee Revenue
CapyFin.comU.S. Retail Pet Foods Revenue
CapyFin.comInternational & AFH Revenue
CapyFin.com Forward Guidance
The Company updated its full-year fiscal 2021 guidance. Net sales are expected to increase 1 to 2 percent. Adjusted earnings per share is expected to range from $8.55 to $8.85. Free cash flow is expected to range from $975 million to $1,025 million.
Positive Outlook
- Net sales are expected to increase 1 to 2 percent compared to the prior year, primarily reflecting elevated at-home consumption benefiting the U.S. Retail Coffee and U.S. Retail Consumer Foods segments.
- Adjusted earnings per share is expected to range from $8.55 to $8.85, based on 114.1 million shares outstanding.
- Earnings guidance reflects the contribution from sales at a gross profit margin range of 37.5 to 38.0 percent
- SD&A expenses to increase 1 to 2 percent compared to the prior year
- Free cash flow is expected to range from $975 million to $1,025 million with capital expenditures of $315 million.
Challenges Ahead
- Net sales guidance also reflects a decline for the Company's Away From Home business
- Net sales guidance also reflects the lapping of a $185 million incremental benefit to net sales related to COVID-19 in the fourth quarter of the prior year.
- The outbreak of COVID-19 continues to impact financial results and cause uncertainty for the full-year fiscal 2021 outlook.
- Changes in consumer purchasing behavior, retailer inventory levels, macroeconomic conditions, and any manufacturing or supply chain disruption could materially impact actual results.
- The full-year fiscal 2021 guidance does not reflect any impact related to the Company's previously announced agreement to divest the Crisco® oils and shortening business.
Revenue & Expenses
Visualization of income flow from segment revenue to net income