Coffee Service

JM Smucker lifts Q1 2024 earnings against sales dip

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August 31, 2023

J.M. Smucker Co., which owns Folgers, Dunkin' and other consumer brands, lifted its earnings for Q1 2024 despite a sales decline related to its pet foods divestiture and an unfavorable foreign currency exchange, according to an earnings report. Highlights include:

• Net sales decreased 4% from $1.87 billion in Q1 2023 to $1.81 billion in the quarter ending July 31, 2023, including a 9% favorable impact from Jif peanut butter primarily due to lapping the product recall in the prior year. Excluding noncomparable net sales in the prior year of $374.1 million from the divested pet food brands, as well as $3.8 million of unfavorable foreign currency exchange, net sales increased 21% to $310.1 million.
• Net income rose 67% from $109.8 million to $183.6 million in the comparative quarters.
• Net income per common share rose 74% from $1.03 to $1.79.
• Adjusted earnings per share rose 32% to $2.21.
• U. S. retail coffee sales rose from $597.9 million to $625.1 million.
• U.S. retail consumer foods sales rose from $311.1 million to $464 million.
• U.S. retail pet foods sales fell from $729 million to $441 million.
• International and away from home sales rose from $235 million to $275.1 million.
• U.S. retail coffee profit rose from $145.9 million to $170.1 million.
• U.S. retail consumer foods profit rose from $54.8 million to $105.7 million.
• U.S. retail pet foods profit fell from $120.3 million to $81.3 million.
• International and away from home profit rose from $16.6 million to $36.4 million.

"Our first quarter results reflect a positive start to our fiscal year, including volume growth in every business segment," Mark Smucker, chair of the board, president and CEO, said in the press release. "Our ability to continue delivering results in a dynamic environment is due to our talented employees, focused strategy and execution, cost and productivity savings, partnership with our customers and consumer demand for our leading brands."

Shares traded at $144.32 today against a 52-week range of $135.44 to $163.07.

The quarterly revenue of $1.81 billion missed analyst estimates by $30 million while the non-GAAP EPS of $2.21 beat expectations by 17 cents, according to Seeking Alpha.

Comparable net sales are expected to increase 8.5% to 9.5% in 2024. This reflects favorable volume/mix from underlying business momentum, as well as higher net pricing.

Net sales are expected to decrease 10% to 11% compared to the prior year, which reflects $1.5 billion of net sales in the prior year related to the divested pet food brands.

Adjusted earnings per share is expected to range from $9.45 to $9.85.