J.M. Smucker pet food, treat net sales down 40% in Q1 FY24

If one excludes net sales in the prior year related to the pet food brands the company sold, net sales actually increased.

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J.M. Smucker’s net sales of pet foods and treats declined to US$441 million in the first quarter of fiscal year 2024. Smucker’s pet product. Smucker’s pet food segment profits decreased US$39.0 million. While net sales dropped by US$288.0 million, or 40%, compared to the same period in fiscal year 2023, Smucker’s pet segment had a profit margin of 18.4% in the Q1 FY24. If one excludes US$367.7 million of noncomparable net sales in the prior year related to the pet food brands the company sold, net sales actually increased US$79.7 million, or 22%. Sales of the MilkBone brand increased, although this was partially offset by declines in the the Pup-Peroni brand.

“In pet foods, comparable net sales increased 22% versus the prior year, including a 14% benefit from contract manufacturing sales related to the divested pet food brands, and strong growth for Meow Mix cat food and Milk-Bone dog snacks,” Mark Smucker, president and CEO of J.M. Smucker said in an earnings call on Feb. 27. “In dog snacks, the Milk-Bone brand grew net sales 10%, as volume/mix and net price realization each contributed 5%. Milk-Bone continued to outpace the category, with consumer take-away up over 13%, and grew nearly two-times the category rate.”

“Mainstream dog snacks are driving category growth through favorable price-per-ounce economics and consumers’ desire for value,” he said. “Biscuits and soft-and-chewy offerings have generated the largest dollar share growth in the dog snacks category over the last year. Our portfolio benefits significantly from this, as we are the #1 manufacturer in both categories. In biscuits, Milk-Bone has a 62% dollar share and grew over 2 points of share in the quarter. In soft-and-chewy, we are the #1 manufacturer with twice the dollar and volume share of the nearest competitor, and we grew over 2 points of dollar share in the quarter.”

J.M. Smucker cat food sales in Q1 FY24

Meow Mix brand net sales grew 13%, he said. Demand for the cat food exceeded Smucker’s production capacity for dry cat food in the quarter.

“Following recent out-of-stocks due to supply constraints, we have begun to replenish retailer inventories,” Smucker said. “The brand has begun to recover share, and Meow Mix Original Choice is again #1 in dry cat food based on volume consumption. We expect continued improvement in supply catching up to demand through the second quarter.”

In 2023, J.M. Smucker sold several pet food and treat brands to Post Holdings, a consumer-packaged goods holding company. The transaction included the Rachael Ray Nutrish, 9Lives, Kibbles 'n Bits, Nature's Recipe, and Gravy Train brands as well as the Smucker’s private label pet food business. In 2021, the J.M. Smucker Co. sold its private-label dry pet food business, including its manufacturing facility in Frontenac, Kansas, USA, to Diamond Pet Foods, Inc., in a cash transaction valued at approximately US$33 million.

Overall, Smucker’s pet segment results in Q1 FY24 demonstrated the benefits of these divestitures, Smucker said.

“We anticipate margins to further improve over time after we fulfill contract manufacturing requirements and mitigate stranded overhead costs related to the recent divestiture.”

2 brands led J.M. Smucker pet division to US$1.5 billion in FY23

Milk-Bone dog snacks and Meow Mix cat food were particularly strong performers for J.M. Smucker in fiscal year 2023, Mark Smucker, president of J.M. Smucker said during the Consumer Analyst Group of New York (CAGNY) conference on Feb. 22 in Boca Raton, Florida, USA.

“With an improved operating environment for cat food, growth in high-margin dog snacks and the divestiture of low-margin pet food brands, we're experiencing margin improvement in our pet food segment,” Smucker said.

J.M. Smucker’s pet division reached US$1.5 billion in net sales during fiscal year 2023, excluding sales of pet food and treat brands divested in 2023. Cat food made up 39% of that total with pet snacks accounting for US$61%.

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