J.M. Smucker Co (SJM.N) on Tuesday raised its full-year targets after beating Wall Street estimates for first-quarter earnings and revenue on strong demand for its coffee, frozen sandwiches and peanut butter from stuck-at-home consumers.
Shares rose as much as 9% as the Jif peanut butter maker posted a 23% jump in sales at its U.S. retail coffee business.
“It has been a long time since Smucker did anything but lower its revenue outlook after reporting fiscal Q1; so, today’s raise is rare,” J.P. Morgan analyst Ken Goldman wrote in a note.
Demand for packaged foods and coffee has remained strong, with extended work-from-home policies and the closure of schools as the COVID-19 pandemic prompted people to stick to eating at home rather than dining out.
“More consumers are purchasing our brands. They are repeating purchases at a higher rate and they are spending more than before,” Chief Executive Officer Mark Smucker said on an earnings call.
Smucker forecast fiscal 2021 adjusted earnings to be between $8.20 and $8.60 per share, up from its previous estimate of $7.90 to $8.30.
It also projected net sales to be flat or grow up to 1%, compared with prior expectations of a decline of 1% to 2%.
The company said it planned to boost production of its coffee, as it benefits from more people making their own coffees using its Folgers, Dunkin’ Donuts and Cafe Bustelo products.
Net sales rose about 11% to $1.97 billion in the first quarter ended July, beating estimates of $1.81 billion.
Excluding items, Smucker earned $2.37 per share, well above expectations of $1.67, according to IBES data from Refinitiv.