The J. M. Smucker Co.
) is set to report first-quarter fiscal 2015 results before the
opening bell on Aug 20. Last quarter, this food products
manufacturer posted a positive earnings surprise of 4.3%. Let's see
how things are shaping up prior to the announcement.
Factors to Consider this Past Quarter
For the past few years, J. M. Smucker's sales have been impacted
by a decline in net price realization, mainly in coffee and K-cups.
Although the company raised
in Jun 2014 in response to higher green coffee costs, it has not
done so for the K-cups.
Management expects sales to improve in fiscal 2015 backed by
strong performance of its K-cup business. However, margins are
expected to be under pressure in the to-be-reported quarter due to
overall cost inflation and incremental investments in marketing and
Moreover, per media reports, unseasonal rains in the last two
months have lowered coffee production thus increasing coffee prices
Our proven model does not conclusively show that J. M. Smucker
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
ESP for J. M. Smucker stands at -2.19% as the Zacks Consensus
Estimate stands at $1.37 per share while the Most Accurate estimate
stands at $1.34.
J. M. Smucker currently has a Zacks Rank #3 (Hold) which when
combined with a -2.19% ESP lowers the chances of an earnings
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Other stocks in the consumer staples sector that have both a
positive Earnings ESP and a favorable Zacks Rank are:
Sanderson Farms Inc. (
), with an Earnings ESP of +4.92% and a Zacks Rank #1 (Strong
Abercrombie & Fitch Company. (
), with an Earnings ESP of +20.00% and a Zacks Rank #2
Shoe Carnival Inc. (
), with an Earnings ESP of +5.88% and a Zacks Rank #2.
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ABERCROMBIE (ANF): Free Stock Analysis Report
SMUCKER JM (SJM): Free Stock Analysis Report
SHOE CARNIVAL (SCVL): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
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