ORRVILLE, Ohio, USA – The J.M. Smucker Co. announced results for the first quarter ended July 31, 2024, of its 2025 fiscal year. Financial results for the first quarter of fiscal year 2025 reflect the divestiture of the Canada condiment business on January 2, 2024, acquisition of Hostess Brands, Inc. (“Hostess Brands”) on November 7, 2023, and divestiture of the Sahale Snacks® business on November 1, 2023. All comparisons are to the first quarter of the prior fiscal year, unless otherwise noted.
Net sales of The J.M. Smucker Co. increased $319.9 million, or 18 percent, to $2.1 billion. Excluding $333.7 million of net sales in the current year related to the Hostess Brands acquisition, $28.6 million of noncomparable net sales in the prior year related to divestitures, and $2.1 million of unfavorable foreign currency exchange, net sales increased $16.9 million, or 1 percent.
The increase in comparable net sales reflects a 1 percentage point increase from volume/mix, primarily driven by increases for the Uncrustables, Café Bustelo, and Meow Mix brands, partially offset by lower contract manufacturing sales related to the divested pet food brands and a decrease for the Dunkin’ brand.
Net price realization was neutral to net sales, as higher net pricing for International and Away From Home and the U.S. Retail Frozen Handheld and Spreads segment was offset by lower net pricing for the U.S. Retail Pet Foods and U.S. Retail Coffee segments.
Net income per diluted share was $1.74. Adjusted earnings per share was $2.44, an increase of 10 percent.
Cash provided by operations was $172.9 million compared to $217.9 million in the prior year. Free cash flow was $49.2 million, compared to $67.6 million in the prior year.
The Company updated its full-year fiscal 2025 financial outlook.
U.S. Retail Coffee
Net sales decreased $1.7 million to $623.4 million. Net price realization reduced net sales by 1 percentage point, primarily driven by a net price decline for the Dunkin’ brand, partially offset by higher net pricing for the Folgers’ brand.
The decrease in net price realization was mostly offset by favorable volume/mix, reflecting an increase for the Café Bustelo brand, partially offset by a decrease for the Dunkin’ brand.
Segment profit increased $2.5 million, primarily driven by lower marketing spend and selling expense, partially offset by lower net price realization and higher commodity costs.
The J.M. Smucker Co.: Full-Year Outlook
The J.M. Smucker Co. updated its full-year fiscal 2025 guidance, as summarized below.
Net sales is expected to increase 8.5 to 9.5 percent compared to the prior year. Comparable net sales is expected to increase approximately 0.5 to 1.5 percent, which excludes noncomparable sales in the current year from the acquisition of Hostess Brands and noncomparable sales in the prior year related to the divestitures of the Canada condiment and Sahale Snacks® businesses. This guidance also reflects a decline of approximately $100.0 million of contract manufacturing sales related to the divested pet food brands as compared to the prior year.
The updated net sales guidance reflects an ongoing dynamic consumer environment driven by inflationary pressures and diminished discretionary income affecting the dog snacks and sweet baked goods categories, and the anticipated impacts of elasticity of demand within our coffee portfolio due to additional pricing actions as a result of higher than expected green coffee costs, partially offset by increased expectations for Uncrustables® sandwiches.
Adjusted earnings per share is expected to range from $9.60 to $10.00, based on 106.6 million weighted-average common shares outstanding. This guidance reflects the revision to net sales expectations, adjusted gross profit margin of approximately 37.5 percent reflecting higher than anticipated green coffee costs, partially offset by lower than anticipated SD&A expenses, which are expected to increase approximately 9.0 percent as compared to the prior year. Interest expense is expected to be $400.0 million, and the adjusted effective income tax rate is anticipated to be 24.3 percent. Free cash flow is expected to be approximately $875.0 million with capital expenditures of $450.0 million.
