ORRVILLE, Ohio, USA – The J.M. Smucker Co. – one of the leading competitors in the U.S. coffee market, with brands of the likes of Folgers, Dunkin’ (licensed to The J.M. Smucker Co. for packaged coffee products sold in retail channels), and Café Bustelo – announced results for the third quarter ended January 31, 2024, of its 2024 fiscal year.
Financial results for the third quarter of fiscal year 2024 reflect the divestiture of the Canada condiment business on January 2, 2024, acquisition of Hostess Brands, Inc. (“Hostess Brands”) on November 7, 2023, divestiture of the Sahale Snacks business on November 1, 2023, and divestiture of certain pet food brands on April 28, 2023. All comparisons are to the third quarter of the prior fiscal year, unless otherwise noted.
Net sales increased $12.9 million, or 1 percent. Excluding $393.6 million of noncomparable net sales in the prior year related to divestitures, $300.3 million of net sales in the current year related to the Hostess Brands acquisition, and $0.3 million of unfavorable foreign currency exchange, net sales increased $106.5 million, or 6 percent.
The increase in comparable net sales reflects a 4 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 2 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.
Net income per diluted share was $1.13. Adjusted earnings per share was $2.48, an increase of 12 percent.
Cash provided by operations was $406.5 million compared to $584.6 million in the prior year. Free cash flow was $249.6 million, compared to $442.7 million in the prior year.
The Company updated its full-year fiscal 2024 financial outlook.
Comparable net sales are expected to increase approximately 8.75 percent compared to the prior year. This reflects favorable volume/mix from underlying business momentum, as well as higher net pricing. Net sales are expected to decrease approximately 3.6 percent compared to the prior year, reflecting net sales of approximately $8.22 billion.
The J.M. Smucker Co.: U.S. Retail Coffee
Net sales decreased $7.6 million, or 1 percent. Net price realization reduced net sales by 4 percentage points, primarily driven by list price decreases, partially offset by reduced trade spend. Volume/mix increased net sales by 3 percentage points, primarily driven by the Café Bustelo and Dunkin’ brands.
Segment profit increased $3.8 million, primarily driven by favorable volume/mix, mostly offset by the unfavorable net impact of lower net price realization and lower commodity costs.
Net price realization reduced net sales by 4 percentage points, primarily driven by list price decreases, partially offset by reduced trade spend. Volume/mix increased net sales by 3 percentage points, primarily driven by the Café Bustelo® and Dunkin’® brands.
