The J. M. Smucker Company (SJM) Bundle
A Brief History of The J. M. Smucker Company
The J. M. Smucker Company, known for its iconic brands, has undergone significant transformations and expansions over the years. As of 2024, the company is focused on enhancing its portfolio through strategic acquisitions and divestitures.
Recent Acquisitions
On November 7, 2023, Smucker completed the acquisition of Hostess Brands for a total purchase consideration of $5.4 billion. This included approximately $3.9 billion in cash and the issuance of 4 million common shares valued at $450.2 million. The integration of Hostess Brands is expected to yield cost synergies of approximately $100 million by the end of 2026. During the first quarter of 2025, the acquired business contributed net sales of $333.7 million .
Divestitures
In a strategic move to streamline operations, Smucker divested several non-core businesses in early 2024. On January 2, 2024, the company sold its Canada condiment business to TreeHouse Foods for $25.3 million, which included brands generating net sales of $43.8 million . Additionally, the Sahale Snacks brand was sold to Second Nature Brands on November 1, 2023, generating net sales of $24.1 million . Furthermore, on April 28, 2023, Smucker sold pet food brands to Post Holdings for a total of $1.2 billion, recognizing a pre-tax loss of $1 billion .
Financial Performance
For the three months ended July 31, 2024, Smucker reported net sales of $2,125.1 million, an increase of 18% year-over-year. The adjusted gross profit for this period was $832.5 million, reflecting a gross profit margin of 39.2% . The net income for this quarter was $185.0 million, with earnings per share (EPS) of $1.74 .
Cash Flow and Liquidity
As of July 31, 2024, Smucker's total cash and cash equivalents stood at $39.5 million, a decrease from $62.0 million at the end of April 2024. The company generated $172.9 million from operating activities during the same period . Additionally, free cash flow was reported at $49.2 million .
Debt and Financing
Smucker's total long-term debt as of July 31, 2024, was $7,774.8 million. The company has access to a $2.0 billion unsecured revolving credit facility, which it did not utilize as of the latest reporting date . Interest expense for the three months ended July 31, 2024, was $140.9 million, significantly higher than the $8.4 million reported for the same period in 2023 .
Market Position and Trends
As of 2024, Smucker continues to navigate a challenging macroeconomic environment characterized by input cost inflation. The company is focused on price adjustments and operational efficiencies to maintain its competitive edge .
| Financial Metric | Q1 2025 | Q1 2024 | Change (%) |
|---|---|---|---|
| Net Sales | $2,125.1 million | $1,805.2 million | 18% |
| Net Income | $185.0 million | $183.6 million | 1% |
| EPS | $1.74 | $1.79 | -3% |
| Adjusted Gross Profit | $832.5 million | $644.4 million | 29% |
| Free Cash Flow | $49.2 million | $67.6 million | -27% |
A Who Owns The J. M. Smucker Company (SJM)
Current Ownership Structure
As of 2024, The J. M. Smucker Company (SJM) has a diverse ownership structure that includes institutional investors, mutual funds, and individual shareholders. The company has approximately 106.2 million shares of common stock outstanding.
Major Shareholders
The following table outlines the significant shareholders of The J. M. Smucker Company as of early 2024:
| Shareholder Type | Number of Shares (millions) | Percentage Ownership |
|---|---|---|
| Institutional Investors | 67.9 | 63.9% |
| Mutual Funds | 21.3 | 20.0% |
| Individual Investors | 17.0 | 16.1% |
Top Institutional Shareholders
The top institutional shareholders of The J. M. Smucker Company are as follows:
| Institution | Shares Held (millions) | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10.5 | 9.9% |
| BlackRock, Inc. | 9.8 | 9.2% |
| State Street Corporation | 8.2 | 7.7% |
| Wellington Management Co. LLP | 5.4 | 5.1% |
| Invesco Ltd. | 4.9 | 4.6% |
Shareholder Composition Over Time
Shareholder composition has evolved due to various factors, including acquisitions and divestitures. The following table provides an overview of the ownership breakdown over the past three years:
| Year | Institutional Investors (%) | Mutual Funds (%) | Individual Investors (%) |
|---|---|---|---|
| 2022 | 60.5% | 22.0% | 17.5% |
| 2023 | 62.0% | 20.5% | 17.5% |
| 2024 | 63.9% | 20.0% | 16.1% |
Impact of Recent Acquisitions
In November 2023, The J. M. Smucker Company completed the acquisition of Hostess Brands, significantly impacting its shareholder structure. The acquisition cost approximately $5.4 billion, financed through a combination of cash and newly issued shares, resulting in the issuance of approximately 4 million shares to Hostess shareholders, valued at $450.2 million.
Market Capitalization
The market capitalization of The J. M. Smucker Company as of early 2024 is approximately $14.7 billion, based on a stock price of approximately $138.50 per share.
Dividends and Shareholder Returns
For the first quarter of fiscal 2025, The J. M. Smucker Company declared dividends totaling $112.1 million, with a quarterly dividend per share of $1.08.
Recent Changes in Ownership
Recent divestitures, including the sale of certain pet food brands and the condiment business, have also affected ownership dynamics. The divestiture of the pet food brands to Post Holdings resulted in net proceeds of approximately $1.2 billion.
Conclusion
The ownership structure of The J. M. Smucker Company continues to evolve, influenced by strategic acquisitions, market performance, and shareholder actions. The company maintains a strong institutional presence, which supports its long-term growth objectives.
The J. M. Smucker Company (SJM) Mission Statement
Overview of Mission Statement
The J. M. Smucker Company's mission statement focuses on delivering quality products that bring families together and enhance their moments of joy. This mission emphasizes their commitment to sustainability, innovation, and customer satisfaction.
Core Values
- Quality: The company prioritizes high-quality ingredients and products.
- Integrity: They operate with honesty and transparency.
- Innovation: Continuous improvement and innovation in product offerings are essential.
- Community: Commitment to corporate social responsibility and community engagement.
- Sustainability: Focus on sustainable sourcing and environmental stewardship.
Financial Performance Indicators
As of the first quarter ending July 31, 2024, The J. M. Smucker Company reported the following key financial metrics:
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Net Sales | $2,125.1 million | $1,805.2 million | 18% |
| Net Income | $185.0 million | $183.6 million | 1% |
| Earnings per Share (Diluted) | $1.74 | $1.79 | (3%) |
| Adjusted Gross Profit | $832.5 million | $644.4 million | 29% |
| Adjusted Operating Income | $447.9 million | $331.7 million | 35% |
Recent Strategic Initiatives
The J. M. Smucker Company has undertaken several strategic initiatives to align with its mission statement:
- Acquisition of Hostess Brands on November 7, 2023, to expand its product portfolio.
- Divestiture of non-core businesses, including the Canada condiment business and Sahale Snacks, to streamline operations.
- Investment in new manufacturing capabilities for Uncrustables sandwiches to meet growing consumer demand.
Market Position and Competitive Landscape
The J. M. Smucker Company operates in a competitive environment with a focus on the following segments:
- U.S. Retail Coffee
- U.S. Retail Frozen Handheld and Spreads
- U.S. Retail Pet Foods
- Sweet Baked Snacks
- International and Away From Home
As of July 31, 2024, the breakdown of net sales by segment was as follows:
| Segment | Net Sales (Q1 2025) | Net Sales (Q1 2024) | % Change |
|---|---|---|---|
| U.S. Retail Coffee | $623.4 million | $625.1 million | 0% |
| U.S. Retail Frozen Handheld and Spreads | $496.8 million | $464.0 million | 7% |
| U.S. Retail Pet Foods | $399.7 million | $441.0 million | (9%) |
| Sweet Baked Snacks | $333.7 million | N/A | N/A |
| International and Away From Home | $271.5 million | $275.1 million | (1%) |
Future Outlook
The J. M. Smucker Company aims to leverage its strong brand portfolio and operational efficiencies to drive growth. The ongoing focus on sustainability and innovation aligns with consumer trends towards healthier and more sustainable food options.
How The J. M. Smucker Company (SJM) Works
Business Overview
The J. M. Smucker Company operates primarily in the consumer goods sector, focusing on food and beverage products. As of 2024, the company has diversified its portfolio through acquisitions, including Hostess Brands, which has significantly impacted its operational structure.
Financial Performance
In the first quarter of fiscal year 2025, the company's financial metrics showed notable growth:
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Net Sales | $2,125.1 million | $1,805.2 million | +18% |
| Net Income | $185.0 million | $183.6 million | +1% |
| Earnings per Share (Diluted) | $1.74 | $1.79 | -3% |
| Adjusted Gross Profit | $832.5 million | $644.4 million | +29% |
| Adjusted Operating Income | $447.9 million | $331.7 million | +35% |
Segment Performance
The company operates through several segments, each contributing differently to the overall performance:
| Segment | Net Sales (Q1 2025) | Segment Profit (Q1 2025) | % Change from Q1 2024 |
|---|---|---|---|
| U.S. Retail Coffee | $172.6 million | $172.6 million | +1% |
| U.S. Retail Frozen Handheld and Spreads | $119.0 million | $119.0 million | +13% |
| U.S. Retail Pet Foods | $399.7 million | $115.3 million | +42% |
| Sweet Baked Snacks | $333.7 million | $74.4 million | n/a |
| International and Away From Home | $271.5 million | $48.6 million | -1% |
Acquisitions and Divestitures
In November 2023, Smucker acquired Hostess Brands, which has since contributed significantly to its revenue streams. The company also divested its Canada condiment business and Sahale Snacks, focusing on core brand strengths.
Debt and Financing
As of July 31, 2024, the company's long-term debt was structured as follows:
| Debt Type | Principal Outstanding | Carrying Amount |
|---|---|---|
| 3.50% Senior Notes due March 15, 2025 | $1,000.0 million | $999.5 million |
| 3.38% Senior Notes due December 15, 2027 | $500.0 million | $498.5 million |
| 5.90% Senior Notes due November 15, 2028 | $750.0 million | $744.8 million |
| 2.38% Senior Notes due March 15, 2030 | $500.0 million | $497.3 million |
| Total Long-term Debt | $7,850.0 million | $7,774.8 million |
Liquidity and Cash Flow
For the first quarter of 2025, the cash flow metrics are as follows:
| Cash Flow Item | Q1 2025 | Q1 2024 |
|---|---|---|
| Net Cash Provided by Operating Activities | $172.9 million | $217.9 million |
| Net Cash Used for Investing Activities | ($172.4 million) | ($151.9 million) |
| Net Cash Used for Financing Activities | ($23.0 million) | ($481.3 million) | Free Cash Flow | $49.2 million | $67.6 million |
Conclusion
The J. M. Smucker Company continues to evolve through strategic acquisitions and a focus on core brands, demonstrating robust financial performance and a commitment to enhancing shareholder value.
How The J. M. Smucker Company (SJM) Makes Money
Overview of Business Segments
The J. M. Smucker Company operates primarily in four reportable segments:
- U.S. Retail Coffee
- U.S. Retail Frozen Handheld and Spreads
- U.S. Retail Pet Foods
- Sweet Baked Snacks
In addition, the International and Away From Home segment encompasses sales distributed in foreign countries and foodservice operations.
Financial Performance
For the first quarter of fiscal year 2025 (ending July 31, 2024), J. M. Smucker reported:
| Financial Metric | 2024 (Q1) | 2023 (Q1) | % Change |
|---|---|---|---|
| Net Sales | $2,125.1 million | $1,805.2 million | +18% |
| Gross Profit | $797.2 million | $654.8 million | +22% |
| Operating Income | $349.5 million | $303.5 million | +15% |
| Net Income | $185.0 million | $183.6 million | +1% |
| Earnings per Share (Diluted) | $1.74 | $1.79 | -3% |
Revenue Breakdown by Segment
The revenue from each segment for the first quarter of 2025 is as follows:
| Segment | Net Sales ($ million) | Segment Profit ($ million) | Segment Profit Margin (%) |
|---|---|---|---|
| U.S. Retail Coffee | $623.4 | $172.6 | 27.7% |
| U.S. Retail Frozen Handheld and Spreads | $496.8 | $119.0 | 24.0% |
| U.S. Retail Pet Foods | $399.7 | $115.3 | 28.8% |
| Sweet Baked Snacks | $333.7 | $74.4 | 22.3% |
| International and Away From Home | $271.5 | $48.6 | 17.9% |
Key Acquisitions and Divestitures
In November 2023, J. M. Smucker acquired Hostess Brands for $5.4 billion, which included:
- $3.9 billion in cash
- Issuance of approximately 4 million common shares valued at $450.2 million
- Assumption of $991 million in debt
The acquisition contributed $333.7 million to net sales in the first quarter of 2025. In contrast, the divestiture of the Canada condiment business and Sahale Snacks resulted in losses and reduced sales.
Cost Management and Profitability
Adjusted gross profit for the first quarter of 2025 was $832.5 million, representing 39.2% of net sales, compared to 35.7% in the previous year. Adjusted operating income increased to $447.9 million, or 21.1% of net sales, up from 18.4% year-over-year. This improvement was driven by effective cost management strategies.
Cash Flow and Liquidity
For the first quarter of 2025, the cash flow metrics were as follows:
| Cash Flow Metric | 2024 (Q1) | 2023 (Q1) |
|---|---|---|
| Net Cash Provided by Operating Activities | $172.9 million | $217.9 million |
| Net Cash Used in Investing Activities | ($172.4 million) | ($151.9 million) |
| Net Cash Used in Financing Activities | ($23.0 million) | ($481.3 million) |
| Free Cash Flow | $49.2 million | $67.6 million |
Debt Structure
As of July 31, 2024, the company had the following long-term debt obligations:
| Debt Instrument | Principal Outstanding ($ million) | Carrying Amount ($ million) |
|---|---|---|
| 3.50% Senior Notes due March 2025 | $1,000.0 | $999.5 |
| 3.38% Senior Notes due December 2027 | $500.0 | $498.5 |
| 5.90% Senior Notes due November 2028 | $750.0 | $744.8 |
| 2.38% Senior Notes due March 2030 | $500.0 | $497.3 |
| 2.13% Senior Notes due March 2032 | $500.0 | $495.3 |
| 6.20% Senior Notes due November 2033 | $1,000.0 | $991.8 |
| 4.25% Senior Notes due March 2035 | $650.0 | $645.6 |
| 2.75% Senior Notes due September 2041 | $300.0 | $297.5 |
| 6.50% Senior Notes due November 2043 | $750.0 | $736.6 |
| 4.38% Senior Notes due March 2045 | $600.0 | $588.8 |
Outlook and Challenges
The company anticipates ongoing input cost inflation and may implement price increases across its product lines. The effective income tax rate is projected to be approximately 24.3% for the fiscal year 2025, up from previous levels due to various financial factors.
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