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J.M. Smucker, Hormel Foods, Best Buy and Children's Place report quarterly earnings

Yahoo Finance’s Emily McCormick joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss quarterly earnings reports from J.M. Smucker, Hormel Foods, Best Buy and Children's Place.

Video Transcript

ALEXIS CHRISTOFOROUS: We've got a lot of earnings we want to get to this morning, including some consumer favorites. Want to bring back Emily McCormick for a breakdown of this one. So, Emily, Hormel, the company behind Spam and Skippy peanut butter, had a pretty nice quarter.

EMILY MCCORMICK: Absolutely, Alexis. We did see Hormel top expectations on both the top and bottom lines for the fiscal third quarter. These were boosted by ongoing strength in its retail business now being supplemented by a pickup in its food-service business as restaurants and other businesses reopen during the quarter.

Now, we saw revenue in the third quarter at a record at $2.38 billion, better than the $2.35 billion that had been expected. Those were up 4% over last year. We also saw adjusted earnings of $0.37 a share, better by $0.02.

Now that profit beating even as the company absorbed about $40 million in incremental supply-chain costs in the quarter, primarily due to lower production volumes, employee bonuses, and enhanced safety measures in its facilities due to COVID-19.

Now looking ahead, CEO Jim Snee said in a statement this morning he expects the fourth quarter will mirror the trends seen in the fiscal third quarter in terms of the strength in the retail business along with the ongoing recovery in food service. Now he did note, though, that the magnitude of additional recovery in the food-service industry, the performance of the entire food supply chain, and state of the broader economy remain highly uncertain.

Now we do see shares here of Hormel down just slightly lower in early trading here. They had been trading higher in the premarket. Alexis.

ALEXIS CHRISTOFOROUS: All right, we should mention that we're going to be speaking with Hormel Foods CEO Jim Smee-- Snee, rather, tomorrow morning right here on "The First Trade," so be sure to tune in for that.

Want to get to J.M. Smucker. That company also putting in a pretty strong performance last quarter. What stood out to you?

EMILY MCCORMICK: Well, taking a look here, similar trends that we saw with Hormel, getting a boost here from increased at-home consumption for J.M. Smucker. They highlighted that their coffee and consumer-food portfolios were particularly strong during the quarter. We saw US retail coffee net sales up 23%. Retail-consumer-food sales were up 22% with profit in that segment up 62%.

Now, the company also raised its guidance and now sees full-year net sales increasing by as much as 1% versus a previous outlook for a decline of as much as 2%. We also saw a raise on the bottom line for adjusted earnings per share of as much as $8.60. That was up $0.30 on the high end here. So also getting a boost here for J.M. Smucker. Alexis.

ALEXIS CHRISTOFOROUS: All right, want to move away from food companies for a minute and talk a little Best Buy, the electronics retailer. How were things last quarter for them?

EMILY MCCORMICK: Strong quarterly results here for Best Buy, Alexis. Also getting a beat on the top and bottom lines. Now, the company really got a boost here from products that help people work, learn, connect, and cook at home. That's according to CEO Corie Barry this morning. Noting that most categories and services improved materially throughout the second quarter as Best Buy opened up stores broadly for shopping. They saw strength in their large appliances, and home theater getting benefits as well.

Now, also want to highlight that the company said enterprise sales growth was about 16% in the last seven weeks of the second quarter after the company reopened its stores. Growth accelerated into August with sales up about 20% in the first three weeks of the third quarter. And on that news, we are seeing Best Buy shares actually trading lower now. Had been reversing some of the trends that we've seen in premarket trading here.

But again, better-than-expected results for that fiscal quarter. Alexis.

ALEXIS CHRISTOFOROUS: All right, thanks, Emily. I want to bring in Brian here because, Brian, I know that you watch Best Buy closely. Anything stick out to you in this report? Did they talk at all about what they expect the holidays to look like?

BRIAN SOZZI: Well, theoretically top of mind, Alexis, should have been August sales, up 20%. That's very strong, a lot stronger than what we heard from Target and Walmart last week, but I think this is why you're seeing the stock fall here in the early bit of trading. No guidance out of the company, still not providing that. They did signal, I think, that perhaps sales have started to slow a bit towards the back end of August because we have no stimulus plan.

Also, inventory down 20% year over year. Now, I go into my Best Buy stores, and they do feel empty. A lot of products such as appliances, this stuff is made in China, and those factories are only now ramping up. So perhaps some concern they may not have the inventory to match the strong demand they're seeing in the stores.