Analyst Note
| Rebecca Scheuneman, CFA |No-moat Smucker’s April-ending fiscal 2021 results generally topped our expectations, with organic sales growth of 4.6%, a 19.1% adjusted operating margin, and EPS of $9.12, compared with our forecast of 0.3%, 19.3%, and $8.56, respectively. Guidance for fiscal 2022 also exceeded our estimates, including organic sales growth of 2% and adjusted EPS of $8.70-$9.10, versus our forecast of 1% and $8.35. Smucker should experience lasting benefits from the pandemic, given the 3 million Keurig coffee machines purchased and the high-single-digit increase in pets adopted during the crisis. We think remote working arrangements will be more flexible moving forward, which should boost Smucker’s annual coffee sales by $135 million (2% of consolidated sales, including a $147 million boost at retail partially offset by a $12 million decline in away from home). We think the increased pet population will lift Smucker’s annual pet food sales by $200 million, or 3% of total sales.