Sales of J.M. Smucker pet foods and treats declined in fiscal year 2020 (Q3 FY20). Net sales for Smucker’s pet segment fell to US$721.9 million, a year-over-year decline of 5% or US$37.1 million. Smucker pet food and treat segment profit dropped by 1% to US$146. Natural Balance brand and private label dog food were largely responsible for the decline, along with Rachael Ray Nutrish. Smucker executives discussed the company's Q3 FY20 financial results in an earnings call on Feb. 26.
“As anticipated, Nutrish pet food net sales declined due to the impact of retailer inventory build related to new distribution in the prior year and competitive activity in the premium dog food category,” said Mark Smucker, president and CEO of J.M. Smucker, during the Q3 FY20 earnings call.
Dog snacks also declined slightly overall primarily due to the shift of a large retailer promotional event, he said. However, other Smucker pet foods and treats performed grew their sales. Smucker’s cat food brands grew by low single-digits, the brands’ 9th consecutive quarter of year-over-year sales growth. MilkBone brand also grew by low single-digits. MilkBone benefited from expansion of the brand into new treat segments, including rawhide alternatives.
Although, Smucker’s pet segment profit declined, the loss was mitigated somewhat by an US$8.1 million recovery from a legal settlement related to a prior year supplier issue, synergy realization and reduced marketing expense.
Smucker discusses his company’s plans for addressing the declines of the past quarter.
“As we discussed on last quarter's call, the team is executing a set of targeted actions to improve the Nutrish brand's consumer value proposition and reinvigorate performance,” Smucker said.
During the past quarter, pet food buyers responded positively to these actions, he said. The brands’ household penetration improved and consumer takeaway across all channels grew by 5% sequentially from the second quarter, including online and the pet specialty channel.
In the coming quarter, Smucker has more plans for Nutrish, such as a new marketing campaign that leverages Rachael Ray’s fame and “real food” ingredients.
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