Net sales rose 7% to $1.90 billion, led by the addition of Ainsworth and the company’s growth brands. This reflects a contribution from the Ainsworth acquisition, partially offset by the impact of noncomparable net sales in the prior year attributed to the divestiture of the US baking business.
Excluding items impacting comparability, net sales decreased by $5 million, due to unfavorable foreign currency exchange. Lower net price realization, primarily in coffee and peanut butter, impacted net sales by 3 percentage points and was mostly offset by favorable volume/mix, as the lowered price points resulted in volume gains in their respective categories.
Looking ahead into the full year 2020, the company expects net sales growth in the range of 1% to 2% and adjusted earnings in the range of $8.45 to $8.65 per share. On a comparable basis, net sales are expected to increase by more than 2%. Free cash flow is predicted to be $875 million to $925 million and capital expenditures are anticipated to be $300 million to $320 million. The effective tax rate is projected to be 24.5% to 25% for the full year.
As the company transition to fiscal 2020, its organization is committed to delivering on its growth imperatives to lead in the best categories, build consumer loved brands, and be located everywhere the consumers want it to be. Disciplined investment in its brands across pet food, coffee, and snacking leaves J. M. Smucker well-positioned to drive sustainable financial growth and enhance shareholder value for the long term.
Also read: United Natural Foods Q3 earnings results
For the fourth quarter, sales from US Retail Coffee rose by 4% year-over-year as favorable volume/mix contributed 8 percentage points, primarily due to the Dunkin’ Donuts and Cafe Bustelo brands. However, sales from US Retail Consumer Foods fell by 15% due to non-comparable net sales in the prior year related to the divested US baking business.
Sales from US Retail Pet Foods jumped by 35%, reflecting the contribution from Ainsworth. However, sales from International and Away From Home declined by 7% hurt by a 3 percentage point decrease due to volume/mix, unfavorable foreign currency exchange, lower net price realization, and the impact of non-comparable net sales in the prior year related to the divested US baking business.
Shares of J. M. Smucker ended Wednesday’s regular session up 0.53% at $125.26 on the NYSE. The stock has risen over 18% in the past year and over 22% in the past three months.
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