J.M. Smucker sales down US$41.3 million in Q1 FY25, profits up

J.M. Smucker’s pet food segment net sales in the United States decreased by US$41.3 million during the first quarter of fiscal year 2025, or 9% compared to the same period last fiscal year. Nevertheless, profit increased US$34.0 million. Lower costs, favorable volume/mix and lower distribution expenses contributed to profitability, while lower net price realization and increased marketing reduced it.

• J.M. Smucker’s pet food segment net sales Q1FY25: US$399.7 million
• Segment profit: US$115.3 million
• Segment profit margin: 28.8 %

“In pet foods, dog snacks and cat food both contributed positive volume/mix in the quarter,” Mark Smucker, president and chief executive officer of J.M. Smucker said in prepared remarks. “In dog snacks, the Milk-Bone brand demonstrated strong net sales growth in soft and chewy snacks of over 60% versus the prior year, aided by innovation, with the launch of new Milk-Bone Peanut Buttery Bites featuring Jif peanut butter. This launch capitalizes on the continued humanization trends in the pet category and is already exceeding our expectations. We are excited to launch the product nationally this coming January. In cat food, the Meow-Mix brand continued its momentum with mid-single-digit net sales and volume/mix growth in the quarter. The brand has regained the #1 volume share position in the dry cat food category and is bringing exciting innovation to market early next calendar year…

“Profit margins in the quarter were strong for our pet portfolio, driven by operational improvements from our transformation office and the wind-down of our co-manufacturing agreement. Additionally, we are lapping supply chain challenges in the prior year that impacted product supply and margins across the business. Our transformed portfolio continues to highlight the benefits of focusing on brands and categories where we have a leading market share position.”

J.M. Smucker affected by divestures

In 2023, J.M. Smucker sold several pet food brands to Post Holdings, a consumer-packaged goods holding company headquartered in St. Louis, Missouri, USA. 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. Smucker’s current financial guidance reflects a decline of approximately US$100.0 million in contract manufacturing sales related to last year’s transaction.

“In Pet Foods, net sales were flat when excluding reduced contract manufacturing sales related to the divested pet food brands, as net sales growth in Meow Mix and cat food was offset by declines in Canine Carry Outs and Pup-Peroni dog snacks. The Milk-Bone brand demonstrated favorable volume/mix, primarily driven by growth in soft and chewy snacks from innovation. Overall, the dog snacks category continues to be impacted by a slowdown in discretionary spending largely driven by inflationary pressures…”