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J.M. Smucker (NYSE:SJM) reported a 12.2% decline in sales in FQ2 to $1.94B. Excluding noncomparable sales in the prior year from the divested pet food brands, as well as $2.5M of unfavorable foreign currency exchange, sales increased 7% during the quarter off volume gains across all segments.
The food company said the increase in comparable net sales reflected a 4 percentage point increase from volume/mix, primarily driven by Smucker's Uncrustables frozen sandwiches and contract manufacturing sales related to the divested pet food brands, partially offset by Jif peanut butter. Comparable net sales growth was also supported by a 3 percentage point increase from net price realization, primarily due to list price increases for the U.S. Retail Pet Foods and U.S. Retail Consumer Foods segments and for International and Away From Home, partially offset by a net price decline for the U.S. Retail Coffee segment.
Segment profit was up 28% in the U.S Retail Consumer Foods segment, primarily reflecting higher net price realization and lower costs, inclusive of a favorable impact of lapping the recall, partially offset by increased marketing investments.
Overall, adjusted gross profit increased 3% during the quarter. Adjusted operating income was up 2%. EPS came in at $2.59 vs. $2.47 consensus and $2.40 a year ago.
CEO outlook: "We are confident in our ability to capitalize on synergies and growth opportunities across snacking, while also continuing to support our other growth platforms in coffee and pet. Our transformed portfolio improves our ability to deliver long-term sustainable growth and shareholder value."
Looking ahead, J.M. Smucker (SJM) sees full-year comparable net sales increasing 8.5% to 9.0% compared to the prior year and full-year EPS of $9.25 to $9.65 vs. a prior outlook for $9.45 to $9.85 and $9.62 consensus.
Shares of J.M. Smucker rose 3.34% in premarket trading on Tuesday to $116.18 vs. the 52-week trading range of $107.33 to $163.07.