J.M. Smucker Co. announces increase in third-quarter coffee sales and away from home segments

March 7, 2022

The J.M. Smucker Co. announced results for the third quarter ended January 31, 2022, of its 2022 fiscal year. Financial results for the third quarter of fiscal year 2022 reflect the divestitures of the Crisco business on December 1, 2020, the Natural Balance business on January 29, 2021, the private label dry pet food business on December 1, 2021, and the natural beverage and grains businesses on January 31, 2022. All comparisons are to the third quarter of the prior fiscal year, unless otherwise noted.

"Our strong third quarter results, including organic net sales growth of 4%, reflects the continued momentum of our business and underlying consumer demand for our iconic brands," said Mark Smucker, president and chief executive officer. "We delivered another quarter that exceeded expectations, reflecting our ability to execute on our strategy, while successfully navigating this challenging and dynamic environment. We continue to drive long-term growth by focusing on our key growth platforms of pet, coffee, and snacking, including the completion of two divestitures this quarter."

"Looking ahead, we are navigating a dynamic environment led by cost inflation and supply chain disruptions. We expect these pressures to continue in the fourth quarter. We are confident in our ability to work through these ongoing challenges, deliver on our fiscal year guidance, and support long-term shareholder value creation."

Third-quarter segment results

U.S. retail coffee

Net sales increased $35.9 million. Net price realization increased net sales by 7 percentage points, primarily reflecting list price increases across the portfolio and trade spend reductions for roast and ground products. Volume/mix decreased net sales by 1 percentage point, driven by the Folgers' brand, partially offset by growth for the Cafe Bustelo brand.

Segment profit increased $2.7 million, primarily reflecting higher net pricing and lower marketing spend, partially offset by higher commodity costs and the decreased contribution from volume/mix.

U.S. retail consumer foods

Net sales decreased $14.5 million. Excluding $31.7 million of noncomparable net sales in the prior year related to the divested Crisco business, net sales increased $17.2 million, or 4%. Higher net price realization contributed 7 percentage points of growth to net sales, primarily driven by Smucker's Uncrustables frozen sandwiches and Smucker's fruit spreads. Volume/mix decreased net sales by 2 percentage points, driven by Jif peanut butter and Smucker's fruit spreads, partially offset by an increase for Smucker's Uncrustables frozen sandwiches.

Segment profit decreased $11.4 million, reflecting the noncomparable segment profit in the prior year related to the divested Crisco business. Comparable segment profit growth from higher net pricing and lower marketing spend was mostly offset by higher ingredient, manufacturing, commodity, and packaging costs.

International and away from home

Net sales increased $31 million. Excluding $2.8 million of noncomparable net sales in the prior year related to the divested Crisco business and $1.8 million of favorable foreign currency exchange, net sales increased $32 million, or 14%. The comparable net sales increases for the Away from Home and International operating segments were 29% and 1%, respectively. Volume/mix for the combined businesses increased net sales by 10 percentage points, primarily driven by increases for portion control spreads and coffee products in the away from home channels. Net price realization contributed a 4 percentage point increase to net sales for the combined businesses.

Segment profit increased $9.7 million, primarily reflecting higher net pricing.


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