The J. M. Smucker Company Reports 18% Increase in Net Sales to $2.13 Billion in Q3 2024

The J. M. Smucker Company reported significant financial performance for the three months ended July 31, 2024, with net sales reaching $2,125.1 million, an 18% increase from $1,805.2 million in the same period of 2023. This growth was primarily driven by the acquisition of Hostess Brands, which contributed $333.7 million to net sales. Excluding the impact of acquisitions and divestitures, net sales increased by 1% year-over-year.

Gross profit for the quarter was $797.2 million, up 22% from $654.8 million in the prior year, reflecting a gross margin of 37.5%, compared to 36.3% in 2023. Operating income also saw a 15% increase to $349.5 million, while net income rose slightly to $185.0 million from $183.6 million, marking a 1% increase. Earnings per share for the quarter were $1.74, down from $1.79 in the previous year.

The company’s strategic developments included the completion of the Hostess Brands acquisition on November 7, 2023, for a total purchase consideration of $5.4 billion, which included $3.9 billion in cash and the issuance of approximately 4.0 million shares valued at $450.2 million. The acquisition is expected to yield cost synergies of approximately $100 million by the end of 2026, with $25 million already achieved.

In terms of cash flow, net cash provided by operating activities was $172.9 million, a decrease from $217.9 million in the same quarter of 2023. Cash used for investing activities increased to $(172.4) million from $(151.9) million. The company reported a net decrease in cash and cash equivalents of $(22.5) million, down from $(414.7) million in the prior year, ending the period with $39.5 million in cash.

The company also undertook several divestitures, including the sale of its Canada condiment business and Sahale Snacks, which generated net proceeds of $25.3 million and $31.6 million, respectively. These divestitures, however, incurred pre-tax losses of $5.7 million and $6.7 million.

As of July 31, 2024, total debt stood at $8,471.8 million, with shareholders’ equity at $7,769.5 million. The effective income tax rate for the quarter was 24.8%, up from 23.0% in the previous year, attributed to share-based compensation impacts. The company continues to manage its financial obligations and is in compliance with all debt covenants.