Dive Brief:
- The J.M. Smucker Company reported a 40% increase in revenue to $2.08 billion in the second quarter, boosted in part by its Big Heart Pet Brands acquisition, which contributed $576.7 million to sales in the quarter, and a strong performance in the coffee segment.
- Profit rose to $176 million from $158.3 million in the same period last year.
- The company also increased the lower end of its 2016 guidance for earnings to $5.70 to $5.80 per share.
Dive Insight:
In addition to a significant sales boost from the Big Heart acquisition, Smucker also saw its U.S. retail coffee sales increase by 10%, attributed to the U.S. retail launch of its Dunkin’ Donuts K-Cup pods. The Folgers brand also contributed to strong quarterly sales, with volume increases from mainstream roast and ground varieties. Smucker saw this same performance from its coffee business in the previous quarter.
Smucker's other packaged foods categories didn't deliver the same performances. Sales fell 3% to $644 million for the company's consumer foods segment attributed to lower prices for Jif brand peanut butter and Pillsbury products. The consumer foods category is seeing increasing competition from both other major companies as well as smaller food companies that are releasing products in the better-for-you category.
Smucker is expanding production capacity for its Uncrustables brand after double-digit volume growth for 14 consecutive quarters, which demonstrates promise for Smucker in this segment.
Smucker also announced earlier this month that it would be selling its U.S. canned milk business to Eagle Family. Lower milk prices haven't been enough incentive for Smucker, which is focusing instead on growing other segments.