Smucker Q2 2021 Earnings Report
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
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