Uncrustables sandwiches aided food segment sales

Uncrustables sandwiches aided food segment sales

J.M. Smucker has raised its full-year financial guidance due to an increase in home consumption despite the US food and beverages group citing uncertainty related to the coronavirus pandemic. 

The peanut butter and jams maker said today (25 August) its first-quarter sales rose 11% to US$1.97bn through 31 July, prompting the New York-listed business to predict an annual rate of flat to up 1%. The company had previously estimated sales would fall by 1-2%.

"The outbreak of Covid-19 continues to impact financial results and cause uncertainty for the full-year fiscal 2021 projections," Smucker said. "This guidance reflects expectations based on the company's current performance and understanding of the overall environment."

Smucker anticipates net sales growth will "moderate" through the rest of the year, partially as a result of a decline in its out-of-home business, and a $185m benefit on sales in the fourth quarter of the previous year related to Covid-19.

Adjusted earnings per share are now seen in a range of $8.20-8.60, up from a prior estimate of $7.90-8.30. That same metric climbed 50% in the first quarter to $2.37.

Elsewhere in the results, operating income increased 40% to $361.1m, while adjusted it was up 39% at $404.5m. In the company's retail consumer foods segment, sales rose 22% to $489.2m led by its own Smucker's brand but including Uncrustables frozen sandwiches and fruit spreads, Crisco oils and shortening, and Jif peanut butter.  

Commenting on the results, president and chief executive Mark Smucker said: "Our first-quarter results exceeded our expectations, particularly for the coffee and consumer foods portfolios. Consumers continued to seek out trusted and iconic brands as we achieved strong growth across nearly all our categories."

He added with respect to the outlook: "We expect continued momentum in the second quarter and are pleased to raise our full-year guidance. We remain confident in our ability to deliver on our fiscal year 2021 goals, advance our long-term strategy and deliver increased shareholder value."

In the out-of-home and international segment, sales fell 19% to $219.1m overall, although the latter recorded sales growth of 21%.