I remain upbeat about the shares of JM Smucker (SJM), one of the US largest food producers. The company financials for its fiscal 2017 first quarter ended July 31 were decent. Revenues decreased 7% y-o-y to $1.82 bn, reflecting the divestiture of the US canned milk business, and lagged consensus estimate of $1.88 bn. Excluding the divested business and currency headwinds, net sales declined 5%, mostly driven by the lower net price realization resulting from lower net pricing on coffee. Unfavorable volume/mix, driven by the US Retail Pet Foods segment, also contributed to lower net sales. However, adjusted operating profit increased 2% to $364 mn supported by lower selling, general and administrative expenses, and operating margin improved 180 basis points to 20%. Adjusted earnings per share jumped 16% to $1.86 comfortably beating analysts’ average projection of $1.75. In August, the company’s board raised a quarterly dividend by 12% to 75 cents per share, which offers a healthy annualized dividend yield of 2.2%.JM Smucker worsened its full fiscal year 2017 revenues guidance and expects them to decline 2-3% due to the divestiture of its canned milk segment and reduced net sales forecast for US Retail Pet Foods. However, management reiterated adjusted earnings per share outlook in the range of $7.60-7.75 compared with $5.67 in FY2016. Included in earnings guidance is $100 mn of incremental synergies in the current fiscal year. JM Smucker also expects to generate free cash flow of around $1 bn.My outlook for JM Smucker remains positive. The company continues to strengthen its portfolio of brands by investing in new capabilities and on-trend platforms that are essential to long-term sales growth. At the same time, management remains focused on sustainable cost reductions that are delivering significant bottom-line benefits despite deflated sales.I believe that lower sales expectations are already priced in, and shares of JM Smucker are well positioned for a rebound. Medium-term target is $150. $SJM, The J.M. Smucker Company / 1440