J.M. Smucker Company (NYSE:SJM) reported sales rose 8.3% in FQ1 to $2.22B. Sales were up 11% after excluding the impact of divestitures and foreign currency exchange.
The increase in comparable sales during the quarter was driven by a 15 percentage point increase from net price realization, primarily reflecting list price increases for each of the company’s U.S. Retail segments and for International and Away from Home, partially offset by a 4 percentage point decrease from volume/mix primarily driven by the U.S. Retail Coffee segment.
Adjusted operating income fell 5% during the quarter to $357.6M vs. $340M consensus, reflecting the exclusion of amortization, other special project costs, and the intangible asset impairment charge and net gain on divestitures in the prior year as compared to GAAP operating income.
The food giant warned that ongoing cost inflation, volatility in supply chains and the overall macroeconomic environment continue to impact financial results and cause uncertainty and risk for the 2023 outlook. Looking ahead, J.M. Smucker (SJM) sees FY23 revenue growth of +5.5% to +6.5% vs. +5.88% consensus and expects FY23 EPS of $8.55 to $8.75 vs. a prior view for $8.35 to $8.75 and $8.60 consensus.
CEO update: “We will continue to advance our strategic priorities, which have supported our commitment to enhanced prioritization, improved profitability and product mix, and greater organizational agility, positioning us to deliver consistent top-and bottom-line growth and shareholder value. This includes our continuous work to optimize our portfolio, as reflected in the recently announced divestiture of several pet food brands, which will allow us to focus on those areas of the business with the greatest growth potential.”
Earlier in the month, J.M. Smucker Co. (SJM) announced an agreement to sell several pet food brands to Post Holdings (POST). The transaction was valued at approximately $1.2B, consisting of $700M in cash and approximately 5.39M shares of common stock of Post Holdings.
Shares of SJM fell 0.35% premarket to $147.54 on light volume.