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Apr 30, 2022
Smucker Q4 2022 Earnings Report
Smucker's financial performance reflected sustained consumer demand for at-home food and coffee, and the company demonstrated continued execution of its strategy amid a challenging environment.
Key Takeaways
Smucker Co. reported a 6% increase in net sales for the fourth quarter of fiscal year 2022. Net income per diluted share was $1.87, while adjusted earnings per share increased by 18% to $2.23. The company provided its fiscal year 2023 outlook, with an expected net sales increase of 3.5 to 4.5 percent and adjusted earnings per share to range from $7.85 to $8.25.
Net sales increased by 6 percent, or 9 percent excluding the impact of divestitures and foreign currency exchange.
Net income per diluted share for the quarter was $1.87, with adjusted earnings per share at $2.23, an 18 percent increase.
Cash from operations was $393.7 million, and free cash flow was $220.7 million for the quarter.
The company expects a net sales increase of 3.5 to 4.5 percent for fiscal year 2023.
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 provided its full-year fiscal year 2023 guidance. Net sales are expected to increase 3.5% - 4.5%. Adjusted earnings per share is expected to range from $7.85 - $8.25. Free cash flow is expected to be approximately $500 million.
Positive Outlook
- Net sales are expected to increase 3.5 to 4.5 percent compared to the prior year.
- Excluding noncomparable net sales in the prior year for the divested private label dry pet food and natural beverage and grains businesses, net sales are expected to increase approximately 6 percent at the mid-point of the guidance range.
- This reflects higher net pricing to recover cost inflation across multiple categories.
- Adjusted earnings per share is expected to range from $7.85 to $8.25, including a $0.90 estimated unfavorable impact related to the Jif® peanut butter product recall.
- Free cash flow is expected to be approximately $500 million, inclusive of the estimated unfavorable impact related to the Jif® peanut butter product recall, with capital expenditures of $550 million.
Challenges Ahead
- Guidance reflects an estimated unfavorable impact to sales of 2 percent and adjusted earnings per share of $0.90 related to the recall of certain Jif® peanut butter products.
- The pandemic and its related implications, along with ongoing cost inflation and volatility in supply chains, continue to impact financial results and cause uncertainty and risk for the fiscal year 2023 outlook.
- This range reflects the benefits of higher net pricing actions and shares repurchased in the prior year being more than offset by cost inflation, the anticipated volume/mix impact of price elasticity of demand, the unfavorable impact of the Jif® peanut butter product recall, and increased SD&A expenses.
- This guidance assumes an adjusted gross profit margin range of 33.0 to 34.0 percent, including a 1 percent estimated unfavorable impact related to the Jif® peanut butter product recall.
- This guidance assumes an adjusted effective income tax rate of 24.2 percent, and 106.5 million common shares outstanding.
Revenue & Expenses
Visualization of income flow from segment revenue to net income