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Can J.M. Smucker Report Improved Fiscal 3Q18 Earnings?

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Part 3
Can J.M. Smucker Report Improved Fiscal 3Q18 Earnings? PART 3 OF 5

Could J.M. Smucker’s Sales Improve in Fiscal 3Q18?

Analysts’ expectation

Analysts expect J.M. Smucker (SJM) to report sales of $1.9 billion in fiscal 3Q18, up ~1.0% on a YoY (year-over-year) basis. The company’s sales are expected to benefit from its focus on merchandising and pricing. Its Folgers K-Cups are also expected to show improvement. 

J.M. Smucker is witnessing improved volumes in its U.S. Retail Pet Foods and International and Away From Home segments, with strength in its Jif, Smucker’s, and dry dog food brands.

Could J.M. Smucker’s Sales Improve in Fiscal 3Q18?

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However, continued softness in the U.S. Retail Consumer Foods segment could remain a drag on its growth. Within its Consumer Foods segment, the Pillsbury and Crisco brands are expected to underperform as distribution losses at a key retailer in the club channel could pressure the segment’s overall sales growth. Also, increased competitive activity could further hurt its sales growth rate.

The company’s U.S. Retail Coffee segment’s sales are expected to benefit from strength in the Dunkin’ Donuts and Café Bustelo brands. However, increased trade investments could restrain the segment’s growth.

How SJM’s peers are performing

Analysts expect sales for the company’s peers Kraft Heinz (KHC), General Mills (GIS), Conagra Brands (CAG), and Kellogg (K) to remain weak or show marginal improvement in the coming quarter.

These companies’ sales are expected to gain from new product launches and incremental sales from acquired brands. However, increased competition, retailers’ inventory adjustments, and moderating consumer demand for packaged foods could pressure its top-line growth rate.

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