Corporate Profiles - 2024 - 82

COMPANY overview
The J.M. Smucker Co.
Looks to find footing within sweet baked snacks
after Hostess integration
I
n June, executives at The J.M. Smucker Co. said
the
Orrville, Ohio-based company
expected
sales growth of 9.5% to 10.5% in fiscal 2025,
a lofty growth target but one the company felt
would be supported by a full year of sales from the
Hostess Brands acquisition and added capacity and
marketing investments in Uncrustables.
Less than three months later, the sales growth
optimism was tempered by a slower-than-expected
first-quarter performance by its Sweet Baked
Snacks division, led by Hostess Brands.
Reduced shopping traffic in the convenience
store channel affected Sweet Baked Snacks results,
and shopper wariness also affected the Pet Snacks
" delivered net sales below our expectations in the
first quarter, " both he and chief financial officer
Tucker Marshall expect the division's performance
to improve over the balance of the fiscal year and
longer term.
" Sweet baked goods is a great category, and we
have the right brand in the portfolio within sweet
baked snacking, " Marshall said in the call. " We're
very pleased with that decision. The (Hostess) acquisition
is on track from an integration standpoint.
It's a strong brand, and we have the right focus and
tactics on the portfolio.
" What gives us confidence in the portfolio are
the ongoing opportunities to see a stabilization in
the c-store channel, ongoing merchandising and
distribution opportunities within traditional retail,
the ability to expand into the away-from-home
channel as well, along with the opportunity to have
synergies sort of come across from each business to
support one another. "
J.M. Smucker said it plans to increase advertising
spending around the Hostess business by 50%,
which is one part of a five-step plan to establish
Hostess as a major snack brand in the years ahead.
Other components of the plan include a focus on
Chairman and president -
Mark T. Smucker
division, said Mark T. Smucker, chairman, president
and chief executive officer, during a late-August
conference call.
" We did see a bit of an acceleration in consumers
shopping less or less frequently in convenience
stores, " he said. " And although we did see some
of that earlier, it did seem to accelerate a bit in
the quarter. I would highlight that, with our Sweet
Baked Snacks business, we do over-index in the
convenience channel and still are growing share
there. So our performance in that channel is good.
But as consumers have been a bit more cautious
and have less discretionary income to spend, that is
why we have seen a bit of an impact on both Sweet
Baked Snacks and Pet Snacks. "
Though Smucker said Sweet Baked Snacks
82 \ October 2024
innovation, expanding distribution, revenue growth
management and a focus on e-commerce.
As a result of the first-quarter stumbles, J.M.
Smucker trimmed its full-year 2025 guidance.
Adjusted EPS is now projected at $9.60 to $10,
compared with $9.80 to $10.20 previously, with
net sales growth pegged at 8.5% to 9.5% versus
the prior forecast of 9.5% to 10.5%.
Despite the optimism in Hostess Brands, J.M.
Smucker may not be fully vested in all the brands
that came on board in the November 2023 acquisition.
Specifically, rumors circulated in July that
J.M. Smucker is considering putting the Voortman
bakery business up for sale, according to Reuters.
Citing unnamed sources, Reuters said the company
has engaged Goldman Sachs to determine
interest in the wafer and cookie business. As of
mid-September, no more news on a potential sale
had surfaced.
One business that continues to be a standout
for J.M. Smucker is Uncrustables. Uncrustables had
J.M. Smucker Co.
net income (loss)
(fiscal years ended in April)
in millions
2024
2023
$744
($91)
Source: J.M. Smucker Co.
2022
$632
J.M. Smucker Co.
net sales
(fiscal years ended in April)
in millions
2024
2023
Source: J.M. Smucker Co.
2022
$8,179
$8,529
$7,999
J.M. Smucker Co.
share price
$90
$105
$120
$135
$150
Sept. Nov.
2023
Jan.
2024
HIGH =
Sept. 5, 2023 = $137.90
LOW =
Nov. 13, 2023 = $104.33
Sept. 4, 2024= $120.53
Sept.
July
March May
Source: New York Stock Exchange
J.M. SMUCKER CO.
Milling & Baking News * Food Business News * Baking & Snack * Meat+Poultry * Dairy Processing * Pet Food Processing
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