ORRVILLE, OHIO — Earnings at the J.M. Smucker Co. soared 132% in the first quarter buoyed by the acquisition of the Folgers coffee business from Procter and Gamble this past year. Net income in the first quarter ended July 31 was $98,063,000, equal to 83c per share on the common stock, up from $42,291,000, or 77c per share.
Sales for the quarter increased 58%, primarily due to the Folgers acquisition, to $1,051,526,000, which compared with $663,657,000 during the previous year.
Excluding Folgers, The J.M. Smucker Co.’s net volume increased 2%, led by Pillsbury flour, baking mixes, frostings, Crisco oils, Jif peanut butter, and Smucker’s fruit spreads, which were partially offset by decreases in the special markets segment. Volume gains were more than offset by price declines taken in calendar 2009, primarily in the U.S. retail oils and baking segment, and higher promotional spending in certain categories, according to the company. Excluding acquisitions and foreign exchange, net sales of $659.5 million, were down 1% in the first quarter of 2010, compared with 2009.
Smucker’s U.S. retail coffee business contributed $366,229,000 to net sales in the first quarter of 2010. Compared to the same three-month period last year, prior to the acquisition, volume increased approximately 9%. The expansion of the Dunkin’ Donuts brand in the gourmet category and growth in traditional roast and ground led to the growth compared to the previous year.
The U.S. retail coffee market segment added $127,311,000 in segment profit for the first quarter of 2010, representing a 34.8% segment profit margin. Margins in the coffee segment were above expected long-term levels due to favorable commodity costs and volume related operating efficiencies, according to the company.
The U.S. retail consumer unit net sales for the quarter were up 6% compared with the prior year, primarily due to a 7% volume gain led by Jif peanut butter, Smucker’s fruit spreads, and Hungry Jack pancakes and syrups. Smucker's Uncrustables were down for the quarter.
The segment’s profit increased 12% to $66,979,000 for the first quarter of 2010 compared with the same period in 2009, mainly due to sales growth, product mix, and supply chain efficiencies. Segment profit margin for the quarter improved from 21.8% of net sales in the first quarter of 2009 to 23% in 2010.
Net sales in the U.S. retail oils and baking market segment were $194,416,000, down 2% for the first quarter of 2010 compared with 2009, reflecting the impact of higher promotional spending and price declines in shortening, oils, flour, and canned milk, the company said. Total volume in the U.S. retail oils and baking market was up 8%, with double-digit gains in Crisco oils and Pillsbury flour, baking mixes, and frostings, offsetting declines in canned milk. U.S. retail oils and baking market profit was $28,616,000, up 2% from the first quarter of 2009.
The company reaffirmed its outlook for the year. For fiscal 2010, net sales are expected to approximate $4.5 billion. Income per diluted share, excluding merger and integration costs of 17c to 19c per diluted share, is expected to range between $3.65 and $3.80.