ORRVILLE, OHIO — Uncrustables frozen sandwiches continued to propel growth in the Consumer Foods division of J.M. Smucker Co. in the company’s most recent quarter.
While overall adjusted sales for the division were flat compared with a year earlier, Uncrustables generated double-digit growth, hitting a pace suggesting the company’s target for half a billion dollars in annual sales may be in reach for fiscal 2022, a year earlier than the company had projected.
“Smucker’s Uncrustables frozen sandwiches continued to deliver exceptional growth, with net sales and household penetration each increasing 16% in the quarter,” Mark T. Smucker, president and chief executive officer, said in a June 3 conference call with investment analysts about results for the fourth quarter of fiscal 2021. “For our combined US Retail and Away From Home segments, the Uncrustables brand delivered nearly $130 million of net sales this quarter, recording its 28th consecutive quarter of growth.”
He said sales of the brand topped $400 million in the fiscal year ended April 30 and that Uncrustables were “on track to exceed our $500 million target in fiscal year 2023.”
Asked by an analyst whether Smucker is anticipating a $100 million, or 25%, increase in Uncrustables sales in fiscal 2022, the company executives did not answer directly. If sales were to rise $100 million in fiscal 2022 and average $130 million per quarter, the sales total for the most recent quarter, the $500 million mark would be breached.
Mr. Smucker said Uncrustables sales are “approximately a 70-30 split between retail and away from home.”
Overall sales of the Smucker Consumer Foods division fell 13% for the fourth quarter ended April 30, but sales were 1% higher excluding the divested Crisco business. Over the past two years, adjusted sales in the division have grown at a 9% annual rate.
Smucker executives in the past have blamed capacity constraints for inhibiting sales growth of Uncrustables. In December 2020, John P. Brase, Smucker’s chief operating officer, said an Uncrustables plant expansion was underway in Longmont, Colo., was about to be completed and that a second phase expansion would begin early in 2021.
While no specific update about Longmont was offered in the June 3 call, the company said capital expenditures for the fourth quarter were $108 million, with the increase over the prior year, primarily related to the capacity expansion for Uncrustables frozen sandwiches.
More dollars are earmarked for Uncrustables capacity in fiscal 2022. In the company’s initial financial guidance for the new year, Smucker said capital expenditures are expected to total $380 million, up from about $300 million in fiscal 2021.
“The increase for capital expenditures primarily relates to capacity expansion for Smucker’s Uncrustables,” said Tucker H. Marshall, chief financial officer, said.
Net income at J.M. Smucker for the year ended April 30 was $876.3 million, equal to $7.79 per share on the common stock, up 12% from $779.5 million, or $6.84 per share, in fiscal 2020. Fiscal 2021 sales also were higher, climbing 3% to $8 billion from $7.8 billion. In the fourth quarter, net income fell 35% and sales were down 8% from the same period a year ago.