Shares of JM Smucker fell after the food and beverage maker said the financial pain from the voluntary recall of Jiff peanut butter products was not over and indicated that earnings for the full fiscal year would be lower than Wall Street expected.
Shares of Smucker (ticker: SJM) were down 3.1% at $119.50 in premarket trading Tuesday as investors weighed in on the better-than-expected quarterly results for the company. The stock is down 9.3% in 2022 as of Tuesday’s trading.
Smucker said in may that it was recalling Jif peanut butter products sold in the US due to possible salmonella contamination.
The company now expects the impact from the recall to continue into fiscal 2023, with an additional adverse impact of approximately $125 million “the net of the remaining anticipated insurance recoveries, primarily the anticipated impact of manufacturing downtime, customer returns and unsoldable inventory.” as well as other recall related costs,” it said.
Smucker estimates its adjusted earnings for the full fiscal year 2023 will be between $7.85 per share and $8.25 per share, while the consensus call among analysts tracked by FactSet was for $8.89. The company also expects net sales to grow between 3.5% and 4.5% compared to the prior year.
In its earnings release, the company said, “The pandemic and its associated impacts, along with ongoing cost inflation and instability in supply chains, continue to impact financial results and cause uncertainty and risk to the outlook for fiscal year 2023.” Huh.” “Specifically, the recent Jiff peanut butter product recall will affect our financial results for the fiscal year.”
For its fiscal fourth quarter ended April 30, the company posted both earnings and revenue, beating Wall Street’s estimates.
According to FactSet, adjusted earnings for the fourth quarter were $2.23 per share, compared to $1.88 expected by analysts. Before Wall Street’s call for $1.9 billion, revenue was $2 billion.
Gross profit for the quarter decreased by $69 million, or 9%, which includes a 7% adverse impact of non-saleable inventory and projected customer returns related to the Jiff recall, according to Smuckers.
Write to Angela Palumbo at [email protected]
Credit: www.marketwatch.com /