Is The J. M. Smucker Positioned for a Beat in Q1 Earnings?

The J. M. Smucker Company SJM  is scheduled to report first-quarter fiscal 2027 earnings on Aug. 26. The Zacks Consensus Estimate for revenues is pegged at $2.1 billion, indicating a decline of 0.4% from the year-ago reported number. 

However, the earnings picture looks encouraging. The consensus mark for earnings has risen 1.4% over the past seven days to $2.21 a share, which suggests an increase of 16.3% from the figure reported in the year-ago period. SJM has a trailing four-quarter surprise of 1.5%, on average.

Factors Likely to Influence SJM’s Upcoming Results

SJM’s first-quarter performance is likely to reflect a mixed sales backdrop, with pricing providing support while volume/mix remaining soft. The company expects first-quarter net sales to be roughly flat year over year, with a low-single-digit increase in net price realization offset by unfavorable volume/mix.

Demand trends across the portfolio may have remained uneven. U.S. Retail Coffee and Sweet Baked Snacks are expected to face volume/mix declines in fiscal 2027, while U.S. Retail Pet Foods and Away From Home are expected to post volume/mix growth. The company also anticipates volume growth across its key platforms — Uncrustables, Cafe Bustelo, Meow Mix and Milk-Bone — supported by continued investments in these brands. Pricing is likely to have offered additional support in Sweet Baked Snacks, as a list-price increase on certain Hostess Donettes products began in the first quarter.

The earnings picture appears more favorable. SJM expects first-quarter adjusted earnings per share to increase in the mid-teens, primarily driven by higher adjusted gross profit in U.S. Retail Coffee and lower interest expense. These benefits, however, are expected to be partly offset by increased marketing investments behind key growth platforms.

Margins may also have benefited from improving cost dynamics. The company entered fiscal 2027 expecting lower commodity and tariff costs, primarily related to green coffee, along with productivity savings from its transformation initiatives. Meanwhile, continued marketing investments and low-single-digit inflation outside green coffee and tariffs may have limited some of the margin upside.

Earnings Whispers for SJM

Our proven model predicts an earnings beat for The J. M. Smucker this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

The J. M. Smucker currently carries a Zacks Rank #3 and has an Earnings ESP of +1.77%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.

Burlington Stores, Inc. BURL currently has an Earnings ESP of +1.84% and a Zacks Rank of 3. The consensus estimate for the quarterly revenues is pinned at approximately $3 billion, which indicates 11.8% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Burlington’s upcoming quarter’s EPS is pegged at $2.18, which implies 37.1% growth year over year. BURL delivered a trailing four-quarter earnings surprise of 14%, on average.

Ulta Beauty, Inc. ULTA currently has an Earnings ESP of +0.41% and a Zacks Rank of 3. The consensus estimate for Ulta Beauty’s quarterly revenues is pinned at about $3 billion, which implies 6.5% growth from the figure reported in the prior-year quarter. 

The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at $6.19, which indicates a 7.1% jump year over year. ULTA delivered a trailing four-quarter earnings surprise of roughly 10%, on average.

Costco Wholesale Corporation COST currently has an Earnings ESP of +1.45% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly revenues is pegged at $94.5 billion, which indicates an increase of 9.6% from the figure reported in the prior-year quarter. 

The Zacks Consensus Estimate for Costco’s upcoming quarter EPS is pegged at $6.51, implying 10.9% year-over-year growth. COST has a trailing four-quarter earnings surprise of 1%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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