The J. M. Smucker Company (SJM): The Disaster Was 'Jarring,' Says Jim Cramer
The J. M. Smucker Company (NYSE:SJM) is one of America's largest food products companies known for its well-known brands such as Folgers and Dunkin. The stock has bled 14% year-to-date primarily on the back of an unbelievable 15.6% share price drop in June. The J. M. Smucker Company (NYSE:SJM)'s shares tanked after the firm's midpoint annual earnings per share guidance of $9 missed average analyst estimates of $10.23 by a wide margin. During the call, the firm's management warned that its green coffee supply could be impacted by tariffs and added that it expects to continuously face demand and inflationary pressures. The J. M. Smucker Company (NYSE:SJM)'s quarterly revenue of $2.14 billion also missed analyst estimates of $2.19 billion. Cramer was shaken by the results:
'But the Smucker disaster yesterday was jarring. Including the gigantic charge they took on Hostess Twinkies. Mark Smucker should not have bought that.'
A wholesaler distributing peanut butter, fruit spreads and specialty spreads to a retailer.
Ahead of the earnings, Cramer warned that The J. M. Smucker Company (NYSE:SJM) was going 'nowhere':
'But let's look at the other way. Let's talk about what old folks were interested in. There's a company called J.M. Smucker. It makes coffee jams and pet food, Uncrustables, Twinkies. It's covered by 15 different firms… It's real. We've all bought their stuff. Two years ago, right at the time that the GLP-1 drugs came of age and we went nuts for the weight loss shots, J.M. Smucker didn't seem to notice. They ran into the fire, they bought Hostess, that's right, Hostess, maker of Twinkies, for $5.6 billion in November of 2023. Today, they took a $980 million impairment charge for that transaction. I doubt that'll be the last one, as Twinkies and Ho Hos may not turn very well. Let's just say they're going nowhere. They also took a big hit from tariffs and higher coffee costs. Smucker's talking about a 20% boost in coffee prices. That's not going to help demand. In the wake of the news, the stock plunged more than 15%. Nearly every analyst who covers it had tough things to say about the business, all major firms.'
While we acknowledge the potential of SJM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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