Yahoo Finance J.M. Smucker’s Segment Contributions and Activities since Fiscal 1Q16
J.M. Smucker's Results for Fiscal 2Q16: Will It Impress Again?
Coffee segment drove the profit margin
J.M. Smucker (SJM) operates through three segments. The US Retail Coffee segment contributed the most to the total net sales and profit margin. The coffee segment showed a net sales increase of $62.3 million in the first quarter fiscal 2016. It also recorded the highest profit margin of 27.40%. The segment’s profit rose by $17.5 million. The introduction of Dunkin’ Donuts K-Cup pods and the Folgers brand during the first quarter drove the performance.
Sale of US canned milk brands and operations
On November 3, J.M. Smucker entered into a definitive agreement of selling its US canned milk brands and operations to Eagle Family Foods Group. Eagle Foods is a subsidiary associated with Kelso & Company. The sale primarily includes milk products that are sold in US retail and foodservice channels under the Eagle Brand and Magnolia brands. It also consists of various other branded and private label trade names with annual net sales of ~$200 million. J.M. Smucker’s manufacturing facilities in El Paso, Texas, and Seneca, Missouri, will be a part of this deal—excluding the canned milk business in Canada.
The company expects to close the deal by the end of calendar year 2015. No additional terms and conditions of the transactions were mentioned in the press release. However, the company will provide the impact of this deal on its fiscal 2016 outlook when it releases its second quarter fiscal 2016 results on November 19.
Dividend declared
On October 16, the company announced that the board of directors approved a $0.67 per share dividend on the common shares. The dividend will be paid on Tuesday, December 1, 2015, to shareholders of record at the close of business on November 13.
Its competitors include Mondelez (MDLZ), Pinnacle Foods (PF), and Cal-Maine Foods (CALM). They reported returns of 20.1%, 15%, and 41.5%, respectively, as of November 13. The Power Shares Dynamic Market Portfolio (PWC) invests 0.40% of its portfolio in Cal-Maine Foods. As of November 13, PWC recorded YTD (year-to-date) returns of 0.72%, respectively.
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