Why J.M. Smucker Stock Is Up Today
Key Points
Higher sales and tariff refunds are boosting J.M. Smucker's free cash flow.
The company recently increased its dividend for the 25th consecutive year.
Shares of J.M. Smucker (NYSE: SJM) rose on Wednesday after the peanut butter and jelly maker reported higher-than-expected earnings and lifted its full-year financial outlook.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Tasty growth
J.M. Smucker's net sales grew 5% year over year to $2.2 billion in its fiscal 2027 first quarter, which ended on July 31.
The gains were driven primarily by price increases and higher sales volumes in several key product lines.
"We delivered volume growth across the Uncrustables, Café Bustelo, Meow Mix, and Milk-Bone brands," CEO Mark Smucker said during a conference call with analysts. "We continue to prioritize resources behind these platforms, which represent our largest growth opportunities."
These sales gains, along with tariff refunds, helped drive the consumer-packaged goods company's adjusted earnings up 71% to $3.24 per share.
J.M. Smucker's free cash flow also improved to $337.3 million, up from negative $94.9 million in the year-ago quarter.
Higher profits mean larger dividends for shareowners
These results and healthy ongoing sales trends prompted management to update its full-year financial targets.
Net sales are now projected to decline by 1% to 2% in fiscal 2027, compared to a previous forecast of down 3% to 4%. The expected decrease is due to the company's decision to pass on savings from lower coffee costs to its customers through price reductions.
J.M. Smucker also guided for adjusted earnings per share of $10.50 to $11 and free cash flow of roughly $1.1 billion, up from $9.75 to $10.25 and $1 billion, respectively.
This robust cash flow production is enabling the packaged food leader to pay down debt, while also rewarding shareholders with rising cash payouts and stock buybacks.
J.M. Smucker raised its quarterly cash dividend to $1.12 per share in July, marking its 25th straight year of dividend increases.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends J.M. Smucker. The Motley Fool has a disclosure policy.