J.M. Smucker (SJM), known for its famous fruit spreads and other foods, would be happy to top you off with a fresh cup of joe to get your day going. J.M. Smucker owners Folgers, Millstone, and has a license to manufacture and distribute Dunkin' Donuts coffee in the retail grocery stores.
Higher coffee prices plus good performance of Crisco oils, Jif peanut butter, and fruit spreads boosted sales and helped offset investments in company brands, higher tax payment, and input costs.
In the third quarter of the fiscal year 2011, net sales rose 9 percent on year to $1.31 billion, while operating income was up 1 percent at $213 million. Net income fell 3 percent to $132 million.
"These strong results reflect our disciplined approach to managing our business, the ongoing investments in the equity of our brands, and the benefit of a cultural commitment to making the highest-quality products," says CEO Richard Smucker.
"Our team continues to drive results, including volume growth and strong cash flow which have enabled us to repurchase over three percent of outstanding shares and declare a 10 percent quarterly dividend increase," adds co-CEO Tim Smucker.
Rise and shine
Going forward, the company expects fiscal year 2011 net sales to increase 4 percent compared to last year. Non-GAAP income per diluted share is expected to range between $4.60 and $4.65.
Coffee is expected to perk up business this year. List prices for the majority of Smucker's coffee products sold in the United States, mainly under the Folgers, Dunkin' Donuts, Millstone, and Folgers Gourmet Selections brands, have gone up by 11 percent.
The recent hike is the latest in a series of price increases designed to keep business in line with global economic dynamics. "The increase in price is driven by sustained increases in green coffee costs," the company says in a statement.
Analysts tracked by Thompson/First Call have a median target price of $82.50.
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