The J.M. The company was able to weather the headwinds in the U.S. Retail Pet Foods industry by using the Uncrustables brand of Smucker Co. The net income for the quarter ended January 31 increased 54% to $187.4million, which is equal to $1.64 per common stock share.
- Smucker’s third quarter is underpinned by coffee and uncrustables
- Smucker’s Dunkin’ coffee, and Uncrustables
- Source: The J.M. Source: The J.M.
- Quarterly Sales Declined by 2% to $1972.3 million
“Overall, our third quarter financial results were in line our expectations because our expected decline in net sales was offset with the benefits of our targeted actions in delivering adjusted e.p.s. Mark T. Smucker was the president and chief executive officer. He spoke on February 26 to analysts during a conference. “Net sales fell 2% in comparison to the previous year due to softness in the dog food business, especially with our private label products. The net sales of the rest of our portfolio were basically flat due to the lower prices for peanut butter and coffee, which was partially offset by volume growth.
Smucker’s U.S. Retail Coffee Business Unit sales fell slightly to $558.8million from $561.6 in the previous year. Segment profit increased to $189.5million from $183.7million.
“In coffee, segment profit grew even if net sales were comparable with the previous year because lower green coffee costs are being passed on to consumers,” Mr. Smucker stated. The Folgers brand saw its highest volume quarter for over three years, with the volume in this segment growing for the sixth consecutive quarter.
“Dunkin'” and Cafe Bustelo maintained their growth trends, increasing 4% and 13% respectively. This was due to expanded distribution, higher household penetration, and new marketing campaigns. K-Cup sales increased by 7%, with each brand experiencing growth.”
U.S. Retail Consumer Foods unit sales remained flat at $422.9 million in the third quarter fiscal 2020, compared to $422.7 million last year. Segment profit dropped to $84.2million from $95.9million.
Segment profit fell partially due to $7.5 million writeoff related to company’s discontinuance of Jif Power Ups brand. This was announced February 19.
“The Smucker’s Uncrustables brand saw 23% growth in quarter one and we anticipate similar growth in quarter four,” Mr. Smucker stated. “As we shared last week at CAGNY, we are excited by the Uncrustables brand’s potential, its trajectory for growth, and the upcoming innovation which will expand the platform beyond peanut Butter and jelly to convenient meat and cheese snacks.”
Mr. Smucker said that the company will have plenty of capacity to support brand expansion with the Colorado Uncrustables plant operating and phase 2 underway. Management set a goal to generate $500 million in sales through the Uncrustables brand before fiscal 2023.
Smuckers’ largest business unit U.S. Retail Pet Foods saw sales drop 5% to $721.9million. This was due to volume/mix issues with private label dog food and issues related to Nature Balance brand. Segment profit fell slightly to $146million, from $147.9million the year before.