J.M. Smucker Narrows Its Outlook Again, but Investors Don't Mind
Consumer packaged goods (CPG) giant J.M. Smucker (NYSE: SJM), which released its fiscal second-quarter earnings report on Friday, is both a beneficiary and a victim of broad product diversification.
The business model used by the very biggest consumer staples conglomerates can seem self-limiting. Including product variants with unique SKUs (stock-keeping units), the typical CPG multinational sells thousands upon thousands of products spread across consumer categories, brands, and geographical regions.
Smucker, which derives most of its sales from within the U.S., seems as fond as its peers of breaking into promising categories and continually innovating within product lines. Ongoing diversification helps stabilize revenue, and in theory, new revenue streams should benefit the top line. But exposure to an enormous array of markets means that leading CPGs rarely seem to issue quarterly results without highlighting at least one problem child.
Source Fool.com
