After seeing a "material benefit" to its sales as demand rose due to the COVID-19 pandemic, J.M. Smucker (SJM 2.35%) says it believes sales will comparatively decline over the next year. In reporting its fiscal fourth-quarter 2020 results Thursday, the company said it benefited from $185 million on incremental sales during the period that ended April 30 as consumers stocked up to stay at home.
Smucker said it expects the decrease in comparable sales for its fiscal 2021 because of an estimated $120 million coronavirus-related reduction mostly due to what it expects will be "a significant and extended decline in the Company's Away From Home business." The company reported a 21% decline in revenue from this segment in the quarter, reflecting pandemic-necessitated restrictions on restaurants and other food-service providers.
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Smucker said it still expects increased sales in the upcoming fiscal year from at-home consumption, which will benefit its retail coffee and consumer foods segments. But overall guidance is for earnings per share of between $7.90 to $8.30 for fiscal 2021, while analysts expected $8.46 per share, on average, according to The Wall Street Journal.
Prior to impacts from the COVID-19 pandemic, the company said sales were in line with expectations. The stay-at-home restrictions imposed by governments across the country and around the world led to a significant boost in demand for both its domestic and international retail businesses, but a "significant decline" in the Away From Home segment. The net financial impact to the most recent quarter's earnings was a benefit of approximately $0.50 per share, including costs associated with pandemic-related initiatives related to safety and employee benefits.
