Coffee Service

Divestitures impact JM Smucker Q3 2022 results

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March 1, 2022

The J.M. Smucker Co., which owns Folgers and other consumer product brands, reported a sales and earnings decline for Q3 2022 reflecting several divestitures, according to an earnings release.

Divestitures included the Crisco business on Dec. 1, 2020, the Natural Balance business on Jan. 29, 2021, the private label dry pet food business on Dec. 1, 2021, and the natural beverage and grains businesses on Jan. 31, 2022.

Highlights include:

• Net sales decreased 1% from $2.07 billion in Q3 2020 to $2.05 billion. Net sales excluding divestitures and foreign currency exchange increased 4% due to higher net price realization for each of the company's U.S. retail segments and for international and away from home, partially offset by decreased contribution from volume/mix.
• Operating income fell 63% from $406.2 million to $150.6 million, while adjusted operating income fell 6% from $403.9 million to $377.9 million.
• Net income per diluted share fell 72% from $2.32 to 64 cents, primarily due to a noncash intangible asset impairment charge within the U.S. retail pet foods segment.
• Adjusted earnings per share was $2.33, a decrease of 5%.

Shares traded today at $128.21 against a 52-week range of $112.33-$145.82.

The quarterly revenue of $2.05 billion beat analyst expectations while the non-GAAP EPS of $2.33 beat expectations by 25 cents, according to Seeking Alpha.

"Our strong third quarter results, including organic net sales growth of 4%, reflects the continued momentum of our business and underlying consumer demand for our iconic brands," Mark Smucker, president and CEO, said in the release. "We delivered another quarter that exceeded expectations, reflecting our ability to execute on our strategy, while successfully navigating this challenging and dynamic environment."

Net sales for 2022 are expected to range from down 1.5% to 0.5% compared to the prior year. Adjusted earnings per share is expected to range from $8.35 to $8.65.