In the eternal battle for peanut-butter preeminence, Jif recently received a gift from Peter Pan. The market clearly liked the outcome, sending shares of J.M. Smucker
Earlier this year, there was a salmonella scare for ConAgra's
The short-term boost clearly helped Smucker's beat fourth-quarter earnings estimates by a wide margin. However, full-year sales still fell slightly, even though the bottom line improved almost 13% as management kept a tight lid on expenses.
Smucker's has also been working to sell slower-growing food brands and acquire outside businesses to meet its long-term goal of 8% sales growth. Management has a stellar track record of right-sizing its food mix; sales and earnings have grown more than 20% on average over the past five years.
But because of the recent run in the shares, Smucker's now trades at more than 20 times forward earnings, and it "expects raw material costs to increase significantly over 2007 levels." Higher food input costs will undoubtedly hurt competitors such as Heinz
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.