What to look for when J.M. Smucker (SJM) reports Q2 2024 earnings

Shares of the J.M. Smucker Co. (NYSE: SJM) rose over 1% on Friday. The stock has dropped 29% year-to-date. The branded foods company is set to report its earnings results for the second quarter of 2024 on Tuesday, December 5, before markets open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $1.95 billion for SJM in the second quarter of 2024. This compares to revenue of $2.2 billion reported in the same period a year ago. In the first quarter of 2024, net sales decreased 4% year-over-year to $1.80 billion.

Earnings

The consensus estimate for EPS in Q2 2024 is $2.47, which compares to adjusted EPS of $2.40 reported in the prior-year quarter. In Q1 2024, adjusted EPS rose 32% to $2.21.

Points to note

J.M. Smucker is expected to benefit from momentum in its coffee, convenient foods and pet snacks businesses in the second quarter. Its coffee brands – Café Bustelo, Folgers and Dunkin – continue to perform well and the company’s investments in product innovation and promotion are expected to drive sales and volume growth in this category.

Last quarter, the company saw strong growth in Uncrustables frozen sandwiches and Smuckers fruit spreads along with gains in Milk Bone dog snacks and Meow-Mix cat food. This momentum can be expected to continue into the second quarter.

SJM benefited from its pet foods divestiture as profit margins in Q1 improved around 200 basis points YoY, driven by improved product mix. The company anticipates margins to further improve over time. The second quarter is likely to see margin benefits from the divestiture.

J.M. Smucker has been reshaping its portfolio through acquisitions and divestitures. It announced the divestitures of its Sahale Snacks brand, and its Canadian fermented food condiment brands recently. The company has also acquired Hostess Brands, the owner of Twinkies and DingDongs, in an effort to expand into the fast-growing sweet baked goods category.

SJM has restructured its strategic business areas with the addition of Sweet Baked Snacks and the renaming of Consumer Foods to Frozen Handheld and Spreads. The company now has five strategic business areas – Coffee, Frozen Handheld and Spreads, Pet, Sweet Baked Snacks, and Away From Home and International. Updates on the acquisition, divestitures and new strategic business areas are key points to look for in the Q2 report.