ORRVILLE, Ohio, Nov. 17, 2016 /PRNewswire/ -- The J. M. Smucker Company announced results for the second quarter ended October 31, 2016, of its 2017 fiscal year. All comparisons are to the second quarter of the prior fiscal year, unless otherwise noted.
Executive Summary
- Net sales decreased 8 percent. Excluding the noncomparable divested U.S. canned milk business, net sales decreased 5 percent.
- Net income per diluted share increased 3 percent to $1.52.
- Adjusted earnings per share was $2.05, an increase of 7 percent, reflecting incremental synergy realization, a lower tax rate, and fewer shares outstanding.
- Incremental synergy realization was $28.5 million in the second quarter and $60.5 million through the first half of fiscal 2017. The Company remains on track to recognize $100 million of incremental synergies in fiscal 2017.
- Cash provided by operating activities was $136.4 million in the second quarter. Free cash flow was $102.6 million in the quarter and $291.3 million through the first half of fiscal 2017.
- The Company maintained its full-year fiscal 2017 net sales, earnings, and free cash flow outlook. Adjusted earnings per share are expected to range from $7.60 to $7.75.
Chief Executive Officer Remarks
"We delivered record adjusted earnings per share for the fiscal second quarter," said Mark Smucker, Chief Executive Officer. "We continue to make significant progress against our current year priorities and long-term goals. These include achieving sustainable cost reductions that both support the bottom-line and fuel investments in the continued growth of our brands. As an example, we are excited to announce the launch of Nature's Recipe® premium pet food into grocery and mass merchandise outlets later this fiscal year. We are aggressively pursuing a variety of growth opportunities and remain confident about enhancing shareholder value."
Second Quarter Segment Results
U.S. Retail Coffee
Segment net sales decreased $34.3 million, driven by lower net price realization, which was primarily attributed to the impact of the 6 percent list price decline taken across most of the coffee portfolio effective at the beginning of the fiscal year. Volume/mix reduced net sales by 1 percent as lower Folgers® roast and ground volume was partially offset by gains for the Dunkin' Donuts® and Café Bustelo®brands. Segment profit increased $6.1 million, as lower commodity and manufacturing overhead costs more than offset the impact of lower net pricing, volume/mix, and increased marketing expense.
U.S. Retail Consumer Foods
Segment net sales decreased $86.7 million, primarily reflecting the impact of $62.0 million of noncomparable net sales in the prior year related to the divested U.S. canned milk business. Excluding the impact of the divestiture, net sales decreased 4 percent. Volume/mix reduced net sales by 4 percent driven by the Jif® and Pillsbury® brands, partially offset by growth in Smucker's® Uncrustables® frozen sandwiches. Net price realization was also slightly lower. Segment profit decreased $8.4 million. Excluding the loss of U.S. canned milk profits, segment profit increased 3 percent as lower manufacturing overhead costs offset the impact of volume/mix, lower net pricing, and increased marketing expense. Full report.
