The J.M. Smucker Co. Reports Strong Quarterly Profit Boosted by Hostess Brands Acquisition
Key Takeaways:
- J.M. Smucker reported better-than-expected quarterly profit on cost-cutting, higher prices, and the addition of Hostess Brands to its portfolio of foods.
- CEO Mark Smucker said the Hostess Brands acquisition strengthened its business for long-term growth.
- Smucker anticipates full-year revenue will jump 9.5% to 10.5% year-over-year.
Shares of The J.M. Smucker Co. (SJM) advanced Thursday after the food producer beat profit estimates as it cut costs, raised prices, and benefited from its purchase of Hostess Brands. The company behind the eponymous jelly, Jif peanut butter, and Folgers coffee posted fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $2.66, above the $2.32 consensus of analysts compiled by Visible Alpha. Revenue fell 1.3% to $2.21 billion, missing forecasts.
Smucker noted gross profit jumped 15.3% to $913.3 million, which it attributed primarily to “a favorable impact from the acquisition of Hostess Brands, lower costs, higher net price realization, and favorable volume/mix.”
Smucker CEO Says Results Driven by ‘Disciplined Cost Management’
Chief Executive Officer (CEO) Mark Smucker explained that the results were driven by “superior execution and disciplined cost management.” He said that Smucker’s transformed portfolio, including the addition of Hostess Brands, “has strengthened our business for long-term profitable growth across our key platforms of coffee, Uncrustables frozen sandwiches, dog snacks and cat food, and sweet baked snacks.”
Sweet baked snacks, a specialty of Hostess Brands, made up more than 15% of Smucker’s revenue in the quarter. Smucker completed its $5.6 billion purchase of Hostess Brands last November.
The company sees fiscal 2025 adjusted EPS of $9.80 to $10.20, with revenue up 9.5% to 10.5%. In 2024 the figures were $9.94 and a decrease of 4.1%, respectively.
Smucker shares surged 6% to $116.92 as of 10:37 a.m. ET Thursday but still are nearly 8% lower for 2024.
Conclusion
The J.M. Smucker Co.’s strong quarterly profit report showcases the positive impact of strategic acquisitions and cost-cutting measures on the company’s financial performance. With the addition of Hostess Brands to its portfolio of foods, Smucker has positioned itself for long-term growth and profitability across key product platforms.
CEO Mark Smucker’s emphasis on disciplined cost management and superior execution has driven the company’s success in the latest quarter. The significant contribution of sweet baked snacks from Hostess Brands highlights the value of diversification in revenue streams.
Looking ahead, Smucker anticipates continued growth in revenue for the full year, signaling a positive outlook for the company’s financial performance in fiscal 2025. Despite fluctuations in share price, investors remain optimistic about Smucker’s prospects in the food industry.
Overall, The J.M. Smucker Co.’s latest financial results underscore its resilience and adaptability in a competitive market environment, setting a solid foundation for future success.
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