ORRVILLE, OHIO — The integration of Folgers helped drive an 84% gain in earnings at J.M. Smucker Co. in the third quarter. Net income in the third quarter ended Dec. 31 totaled $77,941,000, equal to 68c per share on the common stock, up from $42,401,000, or 75c per share, in the same period a year ago. The most recent results included 20c per share in restructuring and merger and integration costs while year-earlier results included 4c per share in charges. Excluding those items, e.p.s. was 88c in the most recent quarter and 79c in the year earlier period.
Sales for the quarter were $1,182,594,000, up 78% from $665,373,000 in the same quarter of the previous year. The company said the acquisitions of Folgers, Carnation, Europe’s Best and Knott’s Berry Farm contributed approximately $491.7 million in net sales during the quarter (including $468.5 million from Folgers) while the foreign exchange impact reduced net sales by about $16 million. Excluding acquisitions and foreign exchange, net sales rose about 6%, J.M. Smucker said.
While acquisitions were key to sales growth, the primary driver was the implementation of price increases put in place to offset rising costs. Volume gains also contributed, including in such brands as Pillsbury baking mixes and frostings, Hungry Jack pancakes and syrups, and canned milk. Volume declines were limited to flour and oils, the company said.
"We delivered strong financial performance this quarter with solid results in our core Smucker business and the addition of Folgers," said Richard Smucker, chairman and co-chief executive officer. "The Folgers merger was completed early in the quarter and contributed to margin expansion and significantly increased cash flow."
The U.S. Retail Market posted a profit of $110,259,000 in the third quarter, up 39% from $79,379,000. Sales in the retail market were $549,258,000, up 9% from $502,174,000 a year ago. Within the consumer strategic area, sales increased 9% for the quarter, led by gains in Smucker’s fruit spreads, Jif and Hungry Jack. Acquisitions contributed about one-quarter of the consumer increase. Within the consumer oils and baking strategic business area, sales also rose 9% primarily due to the impact of price increases.
The newly formed U.S. Retail Coffee Market posted a profit of $90,218,000 on sales of $442,933,000. On a pro forma basis, J.M. Smucker said sales in the segment increased 4% for the quarter behind growth in Dunkin’ Donuts brand coffee.
The Special Markets unit posted profit of $26,982,000, up 7% from $25,206,000. Sales in the segment were $190,403,000, up 17% from $163,199,000 last year. J.M. Smucker said sales in the Canada strategic business area were up 3% while sales in the food service business area rose 64%.
Net income at J.M. Smucker for the first nine months ended Jan. 31 totaled $171,685,000, or $2.31 per share, up 29% from $133,328,000, or $2.35 per share, in the first nine months of fiscal 2008. Net sales were $2,689,393,000, up 39% from $1,934,776,000. The most recent results included 39c per share in restructuring and merger and integration costs while year-earlier results included 9c per share in charges. Excluding those items, e.p.s. was $2.69 in the most recent quarter and $2.42 in the year earlier period.
J.M. Smucker lowered its full-year e.p.s. outlook to $3.15 to $3.30 per share from $3.45 to $3.50 per share while cutting its sales outlook to a range of $3.6 billion to $3.7 billion from an earlier forecast of $3.8 billion to $4 billion. The company said the lower outlook reflects expectations for higher costs and a recall linked to the Salmonella outbreak. Although the recall did not involve the company’s Jif peanut butter brand, it is expected to continue to weigh on all sales of peanut butter.