J.M. Smucker Co. (NYSE: SJM) is trading near a six-year high on Monday after the food and beverage company reported market-beating results for its second financial quarter.
Investors are also responding positively to the raised guidance. Smuckers is now calling for a 6.5% annualised increase in sales this year on $8.35 to $8.75 of adjusted per-share earnings. On CNBC’s “Squawk Box”, CEO Mark Smucker said:
We continue to be laser focused on our strategy. We’ve been very thoughtful about reshaping our portfolio. We’ve made a few divestitures and ensuring that the resources we have in dollars and people, we’re putting against our biggest bets.
Versus its June low, Smuckers stock is now up more than 20%. According to the Chief Executive, much of the second-quarter strength was related to strong demand and prices increases that helped offset the higher input costs.
We’ve been taking a very prudent approach to how we pass along pricing. We offer products and brands across the entire value spectrum, and so consumers can find something that fits their budget and their needs across our entire portfolio.
Cost of sales was 12.4% higher than the same quarter last year, resulting in a 290 basis points hit to gross margin.
Despite strong year-to-date performance amidst a challenging macro environment, Wall Street still rates Smuckers at “underweight” – something to consider if you want to invest in this stock.
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