News Column

Smucker fourth quarter profit down, yearly profit up as company says innovation continues

June 5, 2014

By Betty Lin-Fisher, The Akron Beacon Journal

June 05--Orrville-based food and coffee company J.M. Smucker Co. on Thursday said its innovation on its products has increased as it introduced 100 new offerings and plans to introduce 125 new items next year.

Some of the new items this year include Jif Whips, Dunkin' Donuts bakery series and new Pillsbury frosting flavors, items this year, company Chief Executive Officer Richard Smucker told analysts during an earnings conference call.

The company reported a decline in its fourth quarter net income by 9 percent to $118.50 million from the same time frame a year ago. The company associated the decrease with pricing actions in its retail and foodservice segments. The company's full year profits were up 4 percent at $565.2 million.

The company said it expects net sales to increase 5 percent in the next year and earnings per share are expected to be between $5.95 and $6.05.

The company is expecting Canadian currency to negatively affect its Canadian business in 2015, since the majority of its goods are produced in the U.S.

Smucker had another successful year "as we overcame a number of challenges to deliver our 13th consecutive year of growth," Richard said.

Smucker said volume gains were achieved for the year for several of its brands, including Folgers (up 3 percent), Dunkin Donuts (up 7 percent), Jif and Smucker (up 2 percent) and Crisco and Pillsbury frosting, which were also up.

For the fourth quarter, U.S. retail coffee volume increased 1 percent, however K-cup net sales decreased by 10 percent compared to the previous year.

Vince Byrd, Smucker president and chief operating officer, said K-cup sales have exceeded the company's overall expectations since entering the market in 2011, but fell short of expectations this year due to the competitive landscape. Folgers' K-cup brands were up 10 percent, though the company's Millstone brand had significant declines, he said. Still, the company said it was still optimistic about next year, including introducing three new varieties, restaging two Folgers' lines and expanding its K-cup business.

The company on Tuesday announced a 9 percent increase to its packaged coffee, citing increases in green coffee costs. K-cup packs were excluded from the increase.

In the conference call, CEO Richard Smucker said the company's innovation included more than 250 new products introduced in the last three years. This impacted sales by more than $425 million, or 8 percent of net sales in 2014.

The company's first sponsorship of the U.S. Olympic team was also successful in reaching consumers, including expanding its reach to the "millenial" generation, with more than 1 billion "impressions," said Smucker. Plans for sponsorship of the 2016 summer Olympic games is already underway, he said.

Among the company's 2015 goals, Smucker said, is expanding its footprint of the Jif brand, focusing on simple ingredients and key labels and focusing on its cash strategy.

In a question and answer session, an analyst asked why the company had not had a major acquisition in the last few years and asked if the company was looking. Smucker said the company had looked at a few acquisitions, but did not find anything it was interested in.

Smucker said there are more brands and companies becoming available.

"There is more coming across the transom. We have the balance sheet to do a sizeable acquisition," he said. "We're still looking."

Betty Lin-Fisher can be reached at 330-996-3724 or Follow her on Twitter at and see all her stories at


(c)2014 Akron Beacon Journal (Akron, Ohio)

Visit the Akron Beacon Journal (Akron, Ohio) at

Distributed by MCT Information Services

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Akron Beacon Journal (OH)