Coffee Service

JM Smucker lifts Q3 2023 sales, earnings

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March 1, 2023

The J.M. Smucker Co., which owns Folgers, Dunkin', Smucker and other brands, lifted its sales and earnings for Q3 2023, according to an earnings report. Highlights include:

• Net sales rose 8%, from $2.06 billion in Q3 2022 to $2.16 billion for the quarter ending Jan. 31, 2023.
• Net income rose from $69.7 million to $208.5 million in the comparable quarters.
• Net income per common share rose from 64 cents to $1.96.
• Adjusted EPS was $2.21.
• Excluding non-comparable net sales in the prior year of $45.5 million from the private label dry pet food and the divested natural beverage and grains businesses, as well as $7.2 million of unfavorable foreign currency exchange, net sales increased 11%.
• The increase in comparable net sales was driven by a 15 percentage point increase from net price realization, primarily reflecting list price increases for each of the company's U.S. retail segments and for international and away from home, partially offset by a 4 percentage point decrease from volume/mix primarily driven by the U.S. retail coffee segment.
• U.S. retail coffee net sales increased $73.3 million, or 11%. Higher net price realization increased net sales by 19 percentage points, primarily reflecting list price increases across the portfolio. Volume/mix decreased net sales by 8 percentage points driven by the Folgers and Dunkin' brands.
• U.S. retail consumer foods net sales increased $1.1 million. Excluding $34.7 million of non-comparable net sales in the prior year related to the divested natural beverage and grains businesses, net sales increased $35.8 million, or 9%. Higher net price realization increased net sales by 6 percentage points, primarily reflecting list price increases across the portfolio. Volume/mix increased net sales by 3 percentage points, primarily driven by Smucker's Uncrustables frozen sandwiches.
• International net sales increased $22.8 million, or 9%. Excluding $7.2 million of unfavorable foreign currency exchange and $1.4 million of non-comparable net sales in the prior year related to the divested natural beverage and grains businesses, net sales increased $31.4 million, or 12%.

Shares traded today at $144.65 against a 52-week range of $119.82-$163.07.

The approximately $2.22 billion in quarterly revenue was in line with analyst expectations, while the non-GAAP EPS of $2.21 beat expectations by 8 cents, according to Seeking Alpha.

"Our third quarter results reflect the strong underlying momentum of our business, supported by robust demand for our leading brands and the continued focus on executing with excellence," Mark Smucker, president, CEO and board chairman at J.M. Smucker Co., said in the press release.

Net sales for 2023 are expected to increase approximately 6% compared to the prior year. Excluding non-comparable net sales in the prior year for the divested private label dry pet food and natural beverage and grains businesses, net sales are expected to increase approximately 8%. This reflects higher net pricing to recover cost inflation across multiple categories, partially offset by the anticipated volume/mix impact of price elasticity of demand, and an estimated 2% unfavorable impact related to manufacturing downtime and customer returns and fees from the Jif peanut butter product recall.

Adjusted earnings per share is expected to range from $8.55 to $8.75.