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During this quarter's earnings cycle, many companies have warned of cautious consumers due to high and persistent inflation. And it's not just big-ticket items such as cars and furniture on which consumers are cutting back.
J M Smucker Co (NYSE:SJM), the parent company of Smucker's jelly and jams, warned that people are cutting back spending at convenience stores.
Smucker's, which also owns the Jif peanut butter and Uncrustable brands, reported stronger-than-expected EPS in the company's first quarter, but the company's lower guidance and cautious commentary led to a sell-off in shares after the report.
Shares closed Wednesday's session down nearly 5%; on Thursday, shares were down 1.30% at $113.32 at publication.
See Also: Dollar General Q2 Earnings: Earnings Miss, Slashed Outlook And Shrinking Margins
Analysts adjusted their expectations on the packaged-food giant, with CitiGroup, BofA Securities and TD Cowen all lowering their price targets following the report. The company did highlight significant, double-digit growth in its Uncrustable brand, a packaged peanut butter and jelly sandwich found in the frozen section of grocery stores.
But, in other areas such as coffee, executives at Smucker's highlighted higher input costs caused the company to raise prices, thus weakening sales.
If consumers continue to cut back on spending at convenience stores and on brand-name products, it could be a headwind for other food companies such as Mondelez International (NASDAQ:MDLZ), Kraft Heinz (NASDAQ:KHC) and General Mills (NYSE:GIS).
Thursday morning, Dollar General Corp (NYSE:DG) reported earnings that came in below Wall Street estimates and warned of a “cash-strapped” customer, echoing the sentiment from Smucker's.
Price consumption expenditures data, the Federal Reserve's preferred gauge of inflation, will be released Friday morning and should shed more light on whether prices are rising or cooling.
Read Next: J.M. Smucker Cuts FY25 Outlook Following Q1 Earnings: Read Why
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