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The J.M. Smucker Company (NYSE:SJM) reported a 0.5% increase in sales in FQ3 to $2.23B. Sales excluding the acquisition of Hostess Brands, divestitures, and foreign currency exchange increased 6%.
The food company said the increase in comparable net sales reflected a four percentage point increase from volume/mix, primarily driven by Meow Mix cat food, contract manufacturing sales related to the divested pet food brands, and the Café Bustelo brand. Comparable net sales growth was also supported by a two percentage point increase from net price realization, primarily due to list price increases for the U.S. Retail Pet Foods and U.S. Retail Frozen Handheld and Spreads segments and for International and Away From Home, partially offset by lower net price realization for the U.S. Retail Coffee segment.
U.S. Retail Coffee segment sales were down 1% year-over-year and segment profit was up 2%. U.S. Retail Frozen Handheld and Spreads segment sales rose 1% and segment profit was 11% higher. U.S. Retail Pet Foods segment sales dropped 39% due chiefly to a divestiture.
Overall, adjusted gross profit increased 12% during the quarter. Adjusted operating income was up 28%. EPS came in at $2.48 vs. $2.27 consensus and $2.21 a year ago.
CEO update: "We are pleased to have delivered another quarter of strong financial results, including organic sales and earnings growth, driven by focused execution on our strategic priorities, sustained customer and consumer loyalty to our iconic brands, and volume growth across our business. During the quarter, we completed the acquisition of Hostess Brands and two divestitures, supporting our priority to drive growth by focusing our portfolio and resources toward coffee, snacking, and pet foods."
Looking ahead, J.M. Smucker (SJM) sees comparable sales increasing approximately 8.75% compared to the prior year. The sales forecast reflects favorable volume/mix from underlying business momentum, as well as higher net pricing. Net sales are expected to decrease approximately 3.6% compared to the prior year, reflecting net sales of approximately $8.22B. Adjusted earnings per share is expected to range from $9.45 to $9.65 vs. prior forecast of $9.25 to $9.65 and the consensus mark of $9.53.
Shares of J.M. Smucker fell 0.40% in premarket trading on Tuesday to $124.75 vs. the 52-week trading range of $107.33 to $159.92.