Smucker gets boost from Folgers acquisition
February 24, 2010
ORRVILLE, OHIO — The 2008 acquisition of the Folgers Coffee Co. continues to pay dividends in financial results for the J.M. Smucker Co., as third-quarter income nearly doubled at the Orrville-based company, rising 74% to $135,479,000, equal to $1.14 per share on the common stock. This compared with earnings of $77,941,000, or 68c per share, in the third quarter of fiscal 2009.
Sales for the third quarter ended Jan. 31 were $1,205,939,000, up 2% from $1,182,594,000 during the same period of the previous year.
“We delivered record results once again this quarter, driven by a successful fall bake and holiday period with volume and sales gains across most of our brands,” said Richard Smucker, executive chairman and co-chief executive officer. “Our demonstrated ability to leverage multi-brand, promotional events during key periods enhances our performance and reaffirms the advantage we enjoy by owning our leading brands.”
The U.S. Retail Coffee Market posted a profit of $148,564,000 in the third quarter, up 62% from $91,886,000. Sales in the coffee market were $471,463,000, up 9% from $431,997,000 a year ago.
Smucker said the Folgers brand contributed to the majority of the volume increase, while the continued growth of Dunkin’ Donuts coffee in the gourmet category also contributed double-digit growth.
Within the U.S. Retail Oils and Baking Market, third-quarter operating profit totaled $39,244,000, down 17% from $47,509,000. Sales fell 12% to $244,175,000, reflecting the impact of price declines taken last year and increased promotional spending across the segment. Total volume in the segment rose 3% behind gains in the Pillsbury and Crisco brands, Smucker said.
The U.S. Retail Consumer market posted operating profit of $66,460,000 on sales of $273,837,000, up from $62,750,000 and $270,465,000, respectively, a year ago. Smucker said total volume in the segment rose 4% behind gains in Hungry Jack pancake mixes and syrups, Jif peanut butter and Smucker’s fruit spreads.
The Special Markets unit posted profit of $38,607,000, up 53% from $25,314,000. Sales in the segment were $216,464,000, up 8% from $201,339,000 last year. J.M. Smucker said gains in Canada’s baking and spreads categories, coffee in the food service and export businesses, and the natural foods business were partially offset by declines in food service portion control.
Tim Smucker, chairman and co-c.e.o., said the continued momentum J.M. Smucker is experiencing is a result of a solid strategy and the efforts of an outstanding team.
“The businesses have delivered strong performance, and we look forward to additional opportunities,” Tim Smucker said. “We have once again raised our outlook for the year and believe our brands have proven they are well-positioned for continued growth.”
The company raised its fiscal 2010 guidance to a range of $4.02 to $4.07 per share from $3.95 to $4.05 per share.
For the nine months ended Jan. 31, the company posted income of $373,532,000, or $3.14 per share, up 118% from $171,685,000, or $2.29 per share, during the same period of the previous year. Sales during the nine months were $3,536,210,000, up 31% from $2,689,393,000 during the same period of the previous year.