Upcoming AWS Coverage on TreeHouse Foods Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 7, 2017 / Active Wall St. announces its post-earnings coverage on The J. M. Smucker Co. (NYSE: SJM). The Company posted its third quarter fiscal 2017 earnings results on February 17, 2017. The Company which manufactures Pillsbury baking mixes and Folgers coffee updated its full-year fiscal 2017 net sales, earnings, and free cash flow outlook. Register with us now for your free membership at:

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One of J. M. Smucker's competitors within the Processed & Packaged Goods space, TreeHouse Foods, Inc. (NYSE: THS), reported its Q4 2016 results and provided outlook for 2017 on February 09, 2017. AWS will be initiating a research report on TreeHouse Foods in the coming days.

Today, AWS is promoting its earnings coverage on SJM; touching on THS. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended January 31, 2017, J. M. Smucker's net sales decreased $95.1 million, including $46.3 million attributed to the divested US canned milk business to $1.88 billion versus $1.97 billion for the year ago same quarter. Excluding the non-comparable divested business and foreign currency exchange, the Company's net sales decreased $50.5 million, or slightly below 3%. J. M. Smucker's net sales missed analysts' consensus of $1.92 billion.

For Q3 FY17, J. M. Smucker's gross profit dropped 5% to $722.9 million, driven by volume/mix and the loss of US canned milk profits. Lower net price realization was partially offset by a reduction in commodity and manufacturing overhead costs. On a non-GAAP basis, adjusted gross profit decreased $37.6 million, or 5%. The Company's operating income decreased $80.6 million to $237.7 million in the reported quarter, primarily reflecting a $75.7 million non-cash impairment charge associated with certain indefinite-lived trademarks within our US Retail Pet Foods segment. Excluding $10.7 million of profit and the $25.3 million gain related to the divested US canned milk business, adjusted operating income increased 3%.

J.M. Smucker's net income fell 27% to $134.6 million, or $1.16 per share, in Q3 FY17 compared to $185.3 million, or $1.55 per share, partly attributable to a charge related to certain trademarks within its pet foods business. The Company's reported quarter earnings, adjusted for one-time gains and costs were $2.00 per share, matching Wall Street's expectations of $2.00 per share.

Segment Results

During Q3 FY17, J.M. Smucker's US Retail Coffee segment's net sales declined 7% to $537.6 million, primarily due to volume/mix, which reduced net sales by 5%. This was driven by lower volume for the Folgers® brand, which was partially offset by gains for the Dunkin' Donuts® and Café Bustelo® brands. Lower net price realization reduced net sales by 1%. The segment's profit dropped 12% due to the impact of volume/mix, lower net pricing, and higher commodity costs.

For J.M. Smucker's US Retail Consumer Foods, net sales for Q3 FY17 fell 9% to $517.3 million, primarily reflecting non-comparable net sales of $42.7 million in the prior year related to the divested US canned milk business. Excluding the impact of the divestiture, net sales decreased 2%. The segment's profit decreased 8% to $119.2 million. Excluding $9.4 million of profit and a $25.3 million gain related to the divested US canned milk business, the segment's profit increased 26%.

For the reported quarter, J.M. Smucker's US Retail Pet Foods segment reported net sales of $550.9 million, down 4% on a y-o-y basis, primarily due to lower net price realization. Volume/mix was neutral as gains for Nature's Recipe® and Kibbles 'n Bits® dog food were offset by declines in pet snacks. The segment's profit increased 2% to $126.3 million on lower marketing expense and incremental synergy realization.

During Q3 FY17, the Company's International and Foodservice segment's net sales grew 6% to $273.0 million. Volume/mix contributed 8% of growth to net sales and was slightly offset by lower net price realization and the impact of $3.6 million of non-comparable sales in the prior year related to the divested US canned milk business. The segment's profit decreased 7% to $45.5 million, primarily due to a $1.9 million write-off in the current year associated with the disposal of assets and $1.3 million of profit in the prior year related to the divested US canned milk business.

Cash Flow

J.M. Smucker's cash provided by operating activities was $419.5 million in the reported quarter compared to $542.3 million in the prior year, which benefited from the Company's working capital initiatives. The Company's free cash flow was $366.9 million in the quarter and $658.2 million through the first three quarters of fiscal 2017.

Outlook

For FY17, J.M. Smucker is forecasting comparable net sales to declined 3% compared with its previous estimate of flat to down 1%. The Company also trimmed the top end of its adjusted earnings guidance range by $0.05 per share, estimating adjusted earnings of $7.60-$7.70 per share for the year.

Stock Performance

J. M. Smucker's share price finished yesterday's trading session at $139.99, slightly down 0.36%. A total volume of 865.13 thousand shares exchanged hands. The stock has rallied 12.83% and 12.10% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 9.91%. The stock is trading at a PE ratio of 24.38 and has a dividend yield of 2.14%.

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SOURCE: Active Wall Street