The J.M. Smucker Company shares are trading lower on Wednesday.

The company reported first-quarter adjusted earnings per share of $2.44 (+10% Y/Y), beating the analyst consensus estimate of $2.17. Quarterly sales of $2.125 billion (+18% Y/Y) slightly missed the Street view of $2.133 billion.

“These results are driven by the focus we have established and progress we have made in delivering our core business, successfully integrating Hostess Brands, and achieving our goals for transformation, cost discipline, and cash generation,” said Mark Smucker, Chair of the Board, President and Chief Executive Officer.

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Gross profit rose by $142.4 million, or 22%. Adjusted gross profit increased $188.1 million, or 29%.

This increase was largely due to the acquisition of Hostess Brands and positive volume/mix effects, though the impact of divestitures partially offset it.

Operating cash flow was $172.9 million, down from $217.9 million in the prior year, primarily due to increased cash needed for working capital, though partially offset by higher net income adjusted for noncash items.

Outlook: J.M. Smucker projects FY25 Adjusted EPS to range $9.60 to $10.00, compared to the prior estimate of $9.80 to $10.20 and the $10.03 estimate.

The company also expects net sales growth of 8.5% to 9.5%, down from the previous range of 9.5% to 10.5%. Comparable net sales is expected to increase approximately 0.5%-1.5%.

“The updated net sales guidance reflects an ongoing dynamic consumer environment driven by inflationary pressures and diminished discretionary income affecting the dog snacks and sweet baked goods categories, and the anticipated impacts of elasticity of demand within our coffee portfolio due to additional pricing actions as a result of higher than expected green coffee costs, partially offset by increased expectations for Uncrustables sandwiches,” the company said.

Price Action: SJM shares are trading lower by 4.59% to $115.16 at last check Wednesday.

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