Quarterly performance
Product performance
JM Smucker posted sales growth across all its segments, on a reported basis, except for US Retail Consumer Foods where sales fell 5% due to the Jif peanut butter recall.
On its quarterly call, the company stated that strong demand for its brands supported overall market share gains during the quarter. Brands that are growing or maintaining dollar share accounted for 86% of its US Retail business in Q4, up from 57% in the prior-year period.
The US Retail Pet Foods segment benefited from double-digit growth in cat food and single-digit growth in both dog food and dog snacks. Within Pet Food, the Meow Mix brand gained nearly 3 points of share in Q4, growing over two times the category rate. In dog food, sales for the Nutrish brand grew 14%.
SJM is seeing strong momentum in its coffee portfolio as pandemic-fueled coffee habits continue and at-home coffee consumption remains high. In Q4, the company saw sales growth for its Café Bustelo, Dunkin and Folgers brands.
Sales growth in the Consumer Foods business was driven by gains in Smuckers fruit spreads, Uncrustables frozen sandwiches and Sahale snacks. Total net sales for Uncrustables was approx. $130 million in Q4 for the combined US Retail and Away From Home businesses and SJM believes it can grow to a $1 billion brand in annual net sales over the next five years. The International and Away From Home segment recorded 12% sales growth in the quarter.
Outlook
Looking ahead to FY2023, SJM believes headwinds from supply chain disruptions and cost inflation could take a toll on its performance. It also expects the Jif peanut butter product recall to impact its results for the year. Reported net sales are expected to grow 3.5-4.5% while comparable net sales are expected to grow 6% in FY2023. This includes a 2% impact related to the Jif peanut butter recall. Adjusted EPS is estimated to range between $7.85-8.25, including a $0.90 impact from the Jif product recall. In Q1 2023, net sales are expected to be flat while earnings are expected to decline around 35%, mainly due to negative impacts from the Jif recall.
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