On February 16, the J. M. Smucker Company announced results for the third quarter ended January 31, 2018, of its 2018 fiscal year. Smucker's pet food sales increased by two percent, compared to the previous fiscal year’s third quarter, reaching US$561.9 million, an increase of US$11 million. For the nine months preceding January 31, 2018, pet food net sales were US$1,635.7 million, up from US$1,601.4 million during the equivalent period in fiscal year 2017.
However, Smucker's pet food segment profits dropped to US$118 million, which was a decrease of 7 percent or US$8.3 million, from the previous fiscal year’s third quarter. For the nine months preceding January 31, 2018, pet food segment profit was US$339.2 million, down from US$363 million during the equivalent period in fiscal year 2017.
The decrease in profitability partly resulted from an incremental US$7.1 million charge related to obsolete inventory. Higher marketing expense also contributed to the pet food profit decline.
Pet food segment profit margin was 21 percent in the third quarter of fiscal year 2018, compared to 22.9 percent in the previous third quarter.
Smucker’s third quarter results across all segments
Considering all Smucker’ segments, net sales increased US$24.5 million, or 1 percent, primarily driven by growth in pet food and coffee, partially offset by declines in the oils category. Net price realization slightly offset some of the volume/mix gains, driven by lower net pricing within pet food. Favorable foreign currency exchange contributed US$5.8 million to net sales.
"We had a strong third quarter, with sales growth for key brands in every business and strong earnings per share growth fueled by the benefits of U.S. income tax reform and ongoing cost discipline," said Mark Smucker, chief executive officer, in a press release.
