The J.M. Smucker Co.
) hit a new 52-week high of $99.29 on Mar 28 and eventually
closed at $99.16, generating a return of approximately 11.2%
year-to-date. Smucker's shares have been riding high since it
reported solid fiscal third quarter results on Feb 15. Smucker
also slashed its packaged coffee prices on Feb 19, which further
boosted the share price.
This food and beverage company beat its previous 52-week high
of $97.75 attained on Mar 8. The company's long-term estimated
EPS growth rate is 8.93%. Average volume of shares traded over
the last three months came in at approximately 561K.
Solid Third Quarter Performance
Smucker posted strong fiscal third quarter results beating the
Zacks Consensus Estimate for both revenue and earnings. The
company's continued focus on its brands through innovations and
promotional offerings, strategic acquisitions, improving volumes
of K-cups, and effective utilization of cash through buybacks
drove the earnings.
The company's earnings of $1.47 per share jumped approximately
20% year over year in the third quarter, primarily driven by
increased sales growth and lower share count due to share
buybacks. Net sales growth of 6% was driven by favorable sales
mix and benefits from the acquisition of Sara Lee Corporation's
North American foodservice coffee and hot beverage business in
January last year. Volume gains in the higher priced K-Cups
coffee brand and peanut butter business also fueled growth.
In addition, the company managed to offset higher peanut costs
in the quarter by acquisition gains, favorable sales mix and
lower green coffee costs. This was also reflected in higher gross
and operating margins in the third quarter.
Smucker has also raised the lower end of its adjusted earnings
guidance to a range of $5.17 to $5.22 per share from 5.12 to
$5.22 per share announced previously. The company has also
increased its fiscal 2013 earnings guidance in the first and
second quarters, reflecting the company's potential to drive
profits in the coming quarters.
Slash in Coffee Prices
Following the third quarter earnings, Smucker slashed the list
prices by an average 6% for its flagship brand Folgers and
licensed brand Dunkin' Donuts and majority of its packaged coffee
products sold in the U.S. The company has cut its prices for the
third time since year 2011 in response to decline in green coffee
Other Stocks to Consider
Stocks in the food industry that are portraying strong upward
trend in the bourses are
Flower Foods Inc
Conagra Foods Inc
J&J Snack Foods Corp
). While Flower Foods and J&J Snack carry a Zacks Rank #1
(Strong Buy), Conagra holds a Zacks Rank #2 (Buy).
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
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