Coffee Service

JM Smucker lifts Q1 2023 sales, product recall hammers earnings

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August 24, 2022

The J.M. Smucker Co., which owns Folgers and other consumer product brands, lifted its Q1 2023 sales driven by price increases while earnings got hammered by a Jif product recall, according to an earnings release. Net sales included:

• Net sales increased 1% from $1.86 billion in Q1 2022 to $1.87 billion for the quarter ending July 31, 2022, including a 9% unfavorable impact related to the Jif peanut butter product recall.
• The increase in comparable net sales was primarily driven by a 14% increase from net price realization, primarily reflecting list price increases for the U.S. retail coffee, U.S. retail pet foods and international and away-from-home businesses, partially offset by the unfavorable impact of customer returns and fees related to the Jif peanut butter product recall.
• Net sales excluding divestitures and foreign currency exchange increased 4%. Net sales reflect a 9% unfavorable impact related to the Jif peanut butter product recall.
• Net income fell 29% from $153.9 million to $109.8 million in the comparable quarters.
• Net income per diluted share fell 27% from $1.42 to $1.03 in the comparative quarters.
• Adjusted earnings per share fell 12% from $1.90 to $1.67, primarily as a result of the Jif peanut butter product recall.
• U.S. retail coffee sales increased 10% to $597.8 million.
• U.S. retail consumer foods decreased 29% to $311.1 million, including a 32% unfavorable impact related to the Jif peanut butter product recall.
• International and away-from-home sales rose 2% to $235 million, including a 10% unfavorable impact related to the Jif peanut buter product recall.

"We delivered another quarter that exceeded our expectations, as consumers' demand for our iconic brands continued in a rising cost environment, driving robust organic top-line growth for our key focus platforms of pet, coffee and snacking," Mark Smucker, chairman and CEO, said in the press release.

Shares traded at $142.35 Tuesday against a 52-week range of $118.55-$146.75.

The $1.87 billion in quarterly revenue was in line with analyst expectations, while the non-GAAP EPS of $1.67 beat analyst expectations by 40 cents, according to Seeking Alpha.

The company updated its full-year fiscal 2023 guidance.

Net sales are expected to increase 4% to 5% compared to the prior year.

Adjusted earnings per share is expected to range from $8.20 to $8.60, including an estimated 80-cent unfavorable impact related to the Jif peanut butter product recall.