The J. M. Smucker Company (NYSE:SJM) Q1 2024 Earnings Call Transcript

Steve Powers: Just a question on — as it relates to free cash flow. Given that you’ve raised your outlook $0.25, which implies a decent — I mean, if that is a cash EPS increase, I would expect a little bit of flow through, maybe $25 million or so, to free cash flow that we don’t seem to be seeing. So, maybe you can just talk about what’s driving that. Thank you.

Tucker Marshall: Steve, we are seeing some incremental cash taxes as we had a strong finish to our last fiscal year as we continue to look through certain activities through this fiscal year. And that has really been the driver of the change of why we didn’t raise our free cash flow guidance.

Operator: Next question is coming from Robert Moskow from TD Cowen. Perhaps your phone is on mute, Robert.

Robert Moskow: Can you hear me better?

Mark Smucker: Yes, Rob, welcome back.

Robert Moskow: Yes. Slow start, for sure. In the prepared remarks, you said that Meow Mix continues — the demand continues to exceed your capacity, and you’re beginning to replenish inventory. What’s the plan for improving your capacity for Meow Mix? You say in second quarter that you — it looks like you’re going to grow above consumption in second quarter. What are you doing at the plants to stretch your capacity to make that happen?

Mark Smucker: Rob, it’s Mark. We’re already in process, of course, on those efforts. And it’s all around productivity and making sure that the plants themselves are operating at their highest capacity. There’s some nominal capital investments to make sure that the equipment is running as best it can. And so, it’s really — it’s fundamentally around those types of things. And we do expect the improvement to continue through the second quarter and support the demand.

Robert Moskow: Okay. Any unusual impact in the back half of the year, will this be an easy comparison in the back half, or will it be kind of like normal ship-to-consumption?

Mark Smucker: It should be normal.

Operator: Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over for any further or closing comments.

Mark Smucker: Thank you. Thank you all for your time today for joining the call. We are really pleased with the positive start to our fiscal year. And of course, as we always say, our results were really made possible by our outstanding employees. So, I’d like to just take a moment to thank them for their hard work and dedication to the Company. We hope that many of you will be able to join us in Boston at the Barclays conference next week. A live webcast of our presentation on September 5th at 12:45 can also be accessed from our Investor Relations website. So, I hope to see you all there in person or virtually. Thank you.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.