Smucker Results Top Expectations
August 27 2015 - 8:40AM
Dow Jones News
J.M. Smucker Co. on Thursday reported better-than-expected
profit and revenue growth for its first quarter, helped by a jump
in U.S. coffee sales after a new-product launch and improvements in
pricing.
Like other big food companies, Smucker has been losing out to
smaller competitors that are positioning their products as fresher
and more natural, as Americans shy away from traditional
processed-and-packaged foods. Higher costs have also weighed on the
maker of Folgers coffee and Pillsbury baking mixes recently.
In its latest quarter ended July 31, Smucker's profit grew 18%
to $136.4 million from $116 million a year earlier. Per-share
earnings were flat at $1.14 a share amid an 18% increase in shares
outstanding.
Excluding acquisition costs, per-share earnings were $1.32,
topping expectations for $1.23 a share, according to Thomson
Reuters.
Overall pricing improved by 1 percentage point, as higher coffee
pricing offset lower pricing for peanut butter.
Total sales jumped 47% to $1.95 billion, coming in above
expectations for $1.9 billion in revenue. Sales were lifted by the
company's recent acquisition of Big Heart Pet Brands, which makes
Milk-Bone dog treats and Meow Mix cat food. The business
contributed $561.3 to sales in the quarter.
Excluding the acquisition and foreign currency impacts, sales
grew 6%.
Smucker has been struggling with weak sales of its coffee
brands, in part because it has had to raise prices to combat higher
costs while competition has become tougher.
The company's U.S. retail coffee sales grew 12% in the quarter,
driven by the U.S. retail launch of its Dunkin' Donuts K-Cup pods
in the quarter. Folgers also drove growth, as reduced promotions
and pricing actions offset lower volume.
In its consumer foods segment, which includes Smucker's namesake
fruit spreads, its Pillsbury products, and Crisco oil, sales were
flat at $582.2 million, weighed by lower prices for Jif brand
peanut butter.
The company backed its outlook for the fiscal year that will end
in April 2016.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 08:25 ET (12:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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