What Happened?
Shares of packaged foods company J.M Smucker (NYSE: SJM) jumped 6.4% in the morning session after the company reported fourth-quarter earnings that surpassed analyst expectations.
The company posted adjusted earnings of $2.38 per share, which was higher than analyst estimates. Net sales also saw an increase, growing 7% to $2.34 billion and topping forecasts. However, the company recorded a significant net loss under standard accounting principles. This loss resulted from a large non-cash impairment charge, which is a write-down in the value of its Sweet Baked Snacks business unit. Looking ahead, the company maintained its adjusted earnings guidance for the full year. Investors appeared to focus on the strong adjusted profit beat, driving the stock's positive performance.
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What Is The Market Telling Us
J. M. Smucker’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 14.3% on the news that the company reported underwhelming first-quarter 2025 results: its full-year EPS guidance missed, and its revenue fell short of Wall Street's estimates. The weak top line reflected soft demand for dog snacks, sweet baked goods, fruit spreads and lower contract manufacturing sales related to the divested pet food brands. On the other hand, J. M. Smucker beat analysts' gross margin expectations and its EPS and EBITDA outperformed. Full-year 2026 guidance also called for a 3% growth at the midpoint, which is a deceleration from the 7% growth in the previous year. Overall, this was a weaker quarter.
J. M. Smucker is up 18.2% since the beginning of the year, and at $114.25 per share, it is trading close to its 52-week high of $118.52 from March 2025. Investors who bought $1,000 worth of J. M. Smucker’s shares 5 years ago would now be looking at an investment worth $1,020.
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