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ORRVILLE, Ohio, USA – The J.M. Smucker Co. yesterday announced results for the third quarter ended January 31, 2025, of its 2025 fiscal year. Financial results for the third quarter of fiscal year 2025 reflect the divestiture of the Voortman business on December 2, 2024, divestiture of the Canada condiment business on January 2, 2024, and acquisition of Hostess Brands, Inc. (“Hostess Brands”) on November 7, 2023.
The company raised its annual profit forecast after higher product prices, especially for coffee, helped beat market estimates for quarterly earnings.
It now expects annual adjusted earnings per share in the range of $9.85 to $10.15, compared with the prior forecast of $9.70 to $10.10.
The J.M. Smucker Co.: Q3 Results – Executive Summary
- Net sales was $2.2 billion, a decrease of $43.2 million, or 2 percent. Net sales excluding the divestitures, acquisition, and foreign currency exchange decreased 1 percent.
- Net loss per diluted share was $6.22, reflecting noncash impairment charges attributable to the Sweet Baked Snacks reporting unit. Adjusted earnings per share was $2.61, an increase of 5 percent.
- Cash provided by operations was $239.4 million compared to $406.5 million in the prior year. Free cash flow was $151.3 million, compared to $249.6 million in the prior year.
- The Company updated its full-year fiscal 2025 financial outlook.
U.S Retail Coffee
Net sales increased $13.1 million, or 2 percent. Net price realization increased net sales by 9 percentage points, primarily driven by higher net pricing for the Folgers and Café Bustelo brands. Volume/mix decreased net sales by 7 percentage points, reflecting a decline for the Folgers and Dunkin’ brands, partially offset by an increase for the Café Bustelo brand.
Segment profit increased $0.8 million, primarily reflecting higher net price realization and favorable property taxes, mostly offset by higher commodity costs and unfavorable volume/mix.
Full-Year Outlook
The J.M. Smucker Co. updated its full-year fiscal 2025 guidance, as summarized below.
Net sales is expected to increase 7.25 percent compared to the prior year. Comparable net sales is expected to increase approximately 0.75 percent, which excludes noncomparable sales in the current year from the acquisition of Hostess Brands and noncomparable sales in the prior year related to the divested Voortman, Canada condiment, and Sahale Snacks businesses. This guidance also reflects a decline of approximately $100.0 million of contract manufacturing sales related to the divested pet food brands as compared to the prior year.
Adjusted earnings per share is expected to range from $9.85 to $10.15, based on 106.7 million weighted-average common shares outstanding. This guidance assumes an adjusted gross profit margin of approximately 38.0 percent and an increase of SD&A expenses of approximately 8.0 percent as compared to the prior year. Interest expense is expected to be $390.0 million, and the adjusted effective income tax rate is anticipated to be 24.1 percent. Free cash flow is expected to be approximately $925.0 million with capital expenditures of $400.0 million.
The full-year fiscal 2025 guidance does not reflect any impact related to the Company’s previously announced agreement to divest certain Sweet Baked Snacks value brands. The transaction is expected to close during the fourth quarter of the current fiscal year and the fiscal 2025 net sales impact is expected to be approximately $10 million and immaterial to adjusted earnings per share. The Company anticipates using the proceeds from the transaction to pay down debt.
The J.M. Smucker Co. announces change to U.S. Retail Pet Foods and Sweet Baked Snacks leadership, and supply chain and manufacturing oversight
The company also announced today that Judd Freitag will assume leadership of the U.S. Retail Pet Foods and Sweet Baked Snacks segments, effective March 7, 2025. The Company has also announced the evolution of the leadership structure for the supply chain and manufacturing organizations to strengthen oversight and execution.
As a part of the announcement, Freitag has been promoted to Senior Vice President and General Manager, Pet and Sweet Baked Snacks, an elected Officer of the Company. Freitag has held a series of leadership roles within Finance, Corporate Strategy, and Brand Marketing, and he currently serves as the Vice President, General Manager and Marketing for the U.S. Retail Pet Foods segment.
Freitag was instrumental in the turnaround of the Company’s U.S. Retail Pet Foods business. He will lead the advancement of the Company’s Sweet Baked Snacks strategy to drive growth for the Hostess brand including, delivering the base portfolio, expanding distribution, driving innovation, continuing our portfolio evolution, and establishing revenue synergies.
The J.M. Smucker Co. is also announcing the decoupling of its supply chain and manufacturing organizations to strengthen oversight and execution. Bryan Hutson will assume the expanded responsibility for the Company’s supply chain activities in the role of Senior Vice President, Information Services and Supply Chain. Hutson is currently an elected Officer of the Company and oversees Information Services, the Transformation Office, and Portfolio Operations. Randy Day is currently an elected Officer of the Company and will continue to have responsibility for manufacturing as Senior Vice President, Operations.
Dan O’Leary, Senior Vice President and General Manager, Sweet Baked Snacks and Pet, will exit the Company, effective March 7, 2025. The Company would like to thank Dan for his many contributions to the organization.
