The J.M. Smucker Company SJM appears to be in troubled waters. The company is encountering cost inflation of key commodities along with supply-chain volatility surrounding the availability of labor and transportation. These factors affected first-quarter fiscal 2022 results, which were also hurt by Crisco and Natural Balance business divestitures. Management curtailed its fiscal 2022 earnings view. Further, the sales guidance suggests a decline from the year-ago period.The Zacks Consensus Estimate for fiscal 2022 bottom line has declined from $8.91 to $8.46 per share over the past 30 days. Shares of the Zacks Rank #4 (Sell) company have declined 11.2% in the past three months compared with the industry’s 8.4% fall.The J. M. Smucker Company Price, Consensus and EPS Surprise The J. M. Smucker Company price-consensus-eps-surprise-chart | The J. M. Smucker Company QuoteSoft FYQ1 & 2022 ViewThe J. M. Smucker saw year-over-year declines in the top and bottom lines when it posted first-quarter fiscal 2022 results. The results were hurt by impacts of the Crisco and Natural Balance business divestitures as well as cost inflation. Adjusted earnings of $1.90 per share fell 20% year over year due to cost inflation and unfavorable timing of pricing actions (which came into effect toward the quarter-end).Net sales amounted to $1,858 million, which declined 6% year over year. Excluding non-comparable sales related to divestitures (of Crisco and Natural Balance businesses) as well as currency movements, net sales inched up 1% from a year ago. Lower volume/mix in the International operating unit and U.S. Retail Coffee segments were downsides. Volume/mix in the U.S. Retail Coffee segment was affected by tough comparisons with the year-ago period’s retailer inventory restocking.The company remains troubled by the pandemic-related disruptions, cost inflation and supply-chain volatility. These factors also cause uncertainty for management’s fiscal 2022 guidance, which may be affected by any manufacturing or supply-chain headwind; volatile consumer mobility and buying behavior; retailer inventory levels as well as macroeconomic factors. Management lowered its earnings per share guidance. While it increased its sales guidance, the projected figure still suggests a decline from the year-ago period.For fiscal 2022, The J. M. Smucker now anticipates net sales to decline 1.5-2.5% year over year compared with 2-3% decrease expected before. The net sales guidance includes an impact of $355.6 million associated with the Crisco and Natural Balance divestitures. That said, adjusted earnings per share for fiscal 2022 are now envisioned in the range of $8.25-$8.65, down from $8.70-$9.10 expected before. Adjusted earnings per share came in at $9.12 for fiscal 2021. The bottom-line view indicates lower net sales, adjusted gross margin of roughly 36%, and nearly 6% fall in SD&A costs. Owing to cost inflation and the timing of pricing actions, management expects earnings per share to decline in the second and third quarters of fiscal 2022.Image Source: Zacks Investment ResearchKey HeadwindsThe J. M. Smucker is encountering cost inflation of key commodities along with supply-chain volatility surrounding the availability of labor and transportation. Adjusted gross profit tumbled 15% year over year to $646.2 million for the first quarter of fiscal 2022. Adjusted gross profit margin declined to 34.8% from 38.5% reported in the year-ago quarter. This was accountable to elevated commodity and transportation costs, mainly in the Pet Foods segment. Also, adverse volume/mix and the impact of divestitures hurt the gross margin. Consequently, adjusted operating income declined 20% year over year to $323.4 million. Adjusted operating margin came in at 17.4%, down from 20.5% reported in the year-ago quarter.On first-quarter earnings call, The J.M. Smucker stated that it expects to encounter escalated raw material and logistic costs. Management expects supply-chain disruptions and cost inflation to persist throughout the rest of fiscal 2022. For fiscal 2022, management now expects gross profit margin to be 36%, down from 37-37.5% expected before. This can be accountable to escalated cost of commodities, ingredients, transportation and packaging. Cost inflation is now expected to have a high-single digit impact on the cost of goods sold.Wrapping UpThe J.M. Smucker is benefiting from the revival of the Away from Home division. Additionally, management is focused on pricing and saving initiatives to minimize the effects of the abovementioned cost headwinds. That said, the timing of these pricing actions is unlikely to completely offset cost inflation in fiscal 2022.3 Must-Have Food PicksZacks #1 (Strong Buy) Ranked J&J Snack Foods’ JJSF bottom line outpaced the Zacks Consensus Estimate by a wide margin in the preceding four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.Medifast, Inc. MED, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 16%, on average.Zacks #2 Ranked Celsius Holdings’ CELH bottom line outpaced the Zacks Consensus Estimate by a wide margin in the preceding four quarters. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The J. M. Smucker Company (SJM): Free Stock Analysis Report J & J Snack Foods Corp. (JJSF): Free Stock Analysis Report MEDIFAST INC (MED): Free Stock Analysis Report Celsius Holdings Inc. (CELH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research