ORRVILLE, OHIO — For the first time in five years, volume for Smucker’s Uncrustables frozen sandwiches experienced a quarterly decline, Mark Smucker, president and chief executive officer of J.M. Smucker Co., said during an Aug. 23 conference call with analysts.
|Mark Smucker, president and c.e.o. of J.M. Smucker Co.|
“This was related to timing of customer shipments that have already rebounded in August,” Mr. Smucker said. “Overall consumption trends remain strong and we continue to expect double-digit growth for the full year. In addition, Uncrustables remain a key growth driver for our Foodservice business, where volume for the brand was up 40% during the first quarter.”
Commenting on the other parts of the Consumer Foods business, Mark Belgya, vice-chairman and chief financial officer of Smucker, said first-quarter sales were consistent with expectations.
“Net sales were down 2% excluding the impact of the canned milk divestiture,” Mr. Belgya said. “The decline reflected lower net price realization, which was impacted by the timing of certain trade program expenses compared to the prior year. Volume mix was flat with the prior year.
“Looking at key brands, sales for Jif and Smucker’s were down, generally in line with the overall segment. In the bake aisle, sales for both the Crisco and Pillsbury brands decreased 5% as lower net pricing was partially offset by volume gains. Lastly, the Sahale Snacks brands achieved strong double-digit sales growth in the quarter benefiting from distribution gains. Segment profit declined 7%, mostly attributable to lapping $6 million of prior-year earnings related to the divested milk business. In addition, favorable input costs did not fully offset lower net price realization.”
Overall, net income at J.M. Smucker in the first quarter ended July 31 was $170 million, equal to $1.46 per share on the common stock, up 25% from $136.4 million, or $1.14 per share, in the prior-year period. Net sales fell 7% to $1,815.8 million from $1,952 million. The decline in sales also reflected the impact of Smucker’s divestiture of its U.S. canned milk business.“While net sales fell slightly short of our projection for the quarter, earnings per share exceeded our expectations,” Mr. Smucker said during the earnings call. “This was mostly attributable to higher-than-anticipated segment profit for coffee and lower-than-anticipated spending in a number of areas.”