J.M. Smucker reported a noteworthy decline in third-quarter fiscal sales, primarily attributed to supply chain disruptions. Despite the drop in revenue, earnings showed a surprise increase year-over-year. For the quarter ending on January 31, the maker of Jif peanut butter experienced a revenue drop to $2.19 billion, down from $2.23 billion in the same period last year.
This figure fell short of the average analyst estimation of $2.22 billion, as noted by FactSet. Sales comparisons reflected a 1% decrease, influenced by a significant five-percentage-point decline in volume/mix, stemming from reduced sales in coffee, dog snacks, and the divested pet food brands. Nevertheless, higher prices contributed to some balance in comparable sales.
Chief Financial Officer Tucker Marshall highlighted that net sales did not meet expectations, largely due to $30 million in supply chain disruptions impacting US retail pet foods in the third quarter. In contrast to the sales decline, J.M. Smucker reported an uptick in adjusted earnings per share (EPS), rising to $2.61 from $2.48 year-on-year, surpassing the consensus estimate of $2.37.
CEO Mark Smucker remarked that despite the resolved supply chain issue, the company achieved an adjusted EPS that exceeded expectations, attributing this to disciplined cost management and execution strategies. The organization indicated that their operational strategy is yielding positive results amidst a shifting consumer environment.
Consequently, J.M. Smucker has lowered its full-year revenue growth target from a previous range of 7.5% to 8.5%, now estimating growth at 7.25%. For comparable net sales, an anticipated growth of nearly 0.8% is expected, adjusted for the impacts of various divestitures and the Hostess Brands acquisition.
Additionally, the company projects its fiscal 2025 adjusted EPS to lie between $9.85 and $10.15, an increase from the earlier forecast of $9.70 to $10.10. In comparison, the FactSet consensus anticipates a non-GAAP EPS of $9.89 for the ongoing year. Current trading price stands at 108.93 with a change of -0.23, reflecting a percent change of -0.21..