Factors Likely to Decide Smucker's (SJM) Fate in Q4 Earnings

The J. M. Smucker Company SJM is slated to release fourth-quarter fiscal 2019 results on Jun 6. The company’s earnings have underperformed the Zacks Consensus Estimate by an average of 2.2% in three of the trailing four quarters.

Let’s see how this provider of pet food and pet snacks, among other products, is positioned ahead of the upcoming quarterly results.

What to Expect?

The Zacks Consensus Estimate for fourth-quarter earnings has remained stable in the past 30 days at $1.97, indicating growth of 2.1% from the year-ago quarter’s reported figure. Further, the consensus mark for revenues is $1,936 million, suggesting a rise of 8.7% from the year-ago quarter’s reported figure.

The J. M. Smucker Company Price and EPS Surprise

The J. M. Smucker Company Price and EPS Surprise


The J. M. Smucker Company price-eps-surprise | The J. M. Smucker Company Quote

Factors Influencing the Stock

Smucker is focused on cost containment and optimization efforts to ensure higher profitability. Further, it is on track to generate cost savings and synergies from the Ainsworth buyout. Additionally, the company is committed toward investing in its growth brands. These factors are likely to have a positive impact on the fiscal fourth-quarter results. This apart, robust e-commerce growth in both coffee and pet food segments bodes well for Smucker’s top line in the impending quarter.

However, the company is seeing elevated marketing costs, which are anticipated to continue in the upcoming quarter. Moreover, the buyout of Ainsworth has led to rise in selling, distribution, and administrative (SD&A) expenses and interest expenses for quite some time now. These downsides may dent the company’s bottom-line performance to some extent.

What the Zacks Model Unveils

Our proven model doesn’t show a beat for Smucker this earnings season. For this to happen, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Smucker carries a Zacks Rank #3 (Hold) but has an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to beat on earnings in the upcoming releases.

General Mills GIS has an Earnings ESP of +1.18% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

J&J Snack Foods Corp JJSF has an Earnings ESP of +0.98% and sports a Zacks Rank #1.

Post Holdings POST has an Earnings ESP of +3.30% and carries a Zacks Rank of 3.

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The J. M. Smucker Company (SJM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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