Smucker hit by high coffee prices, helped by Uncrustables

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ORRVILLE, OHIO — The J.M. Smucker Co. faced a number of obstacles to its bottom line during the second quarter that ended on October 31. In addition to the larger headwinds faced by the industry as a whole, including higher input costs and supply chain difficulties, the company continued to feel the effects of the sale of its natural beverage and grains business in January, the voluntary recall of Jif peanut butter products in May, and lower volume across its premium coffee brands.

The company’s quarterly revenue increased due to the popularity of its Uncrustables frozen sandwiches, pet food, and snacks, as well as price hikes in its coffee business.

“Our strong top-line growth was led by our pet and coffee businesses, along with robust growth for the Uncrustables brand,” said Mark Smucker, president and CEO, in a prerecorded earnings call released alongside the company’s second-quarter results. “These platforms continue to be key growth enablers and demonstrate strong execution of our leadership strategy in the attractive categories of pet, coffee, and snacks.”

J.M. Smucker’s net income for the second quarter ended October 31 was $191.1 million, or $1.79 per share on the common stock, a 7% decrease from the second quarter of fiscal 2022, when it was $206 million, or $1.90 per share.

The gross profit decreased by 1% during the quarter. The company’s quarterly operating income decreased by $18.4 million, or 6%, primarily due to a drop in gross profit and a $6.6 million increase in selling, distribution, and administrative expenses.

Comparing the current quarter to the same period last year, sales increased 8% to $2.21 billion. The increase was primarily the result of pricing actions in the US Retail, International, and Away from Home segments, partially offset by a decrease in volume/mix in the US Retail Coffee segment.

US Retail Pet Food, the company’s largest business unit, saw its segment profit increase by 21% to $120.1 million in the second quarter. The sales for the quarter totaled $765.2 million, a 9% increase from the same period last year.

Mr. Smucker highlighted sales of cat food led by the Meow Mix brand, sales of dog treats led by the Milk Bone brand, and sales of dog food led by the Kibbles ‘n Bits and Nutrish brands.

The profit for the US Retail Coffee segment decreased 10% to $187.7 million. Coffee sales were $709.8 million, a 10% increase from the same period last year.

Mr. Smucker stated on a conference call with analysts on November 21 that the company observed a shift away from premium coffee in the second quarter.

Read more • foodbusinessnews.net

Source: Coffee Talk

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