J M Smucker reports 25% increase in Q4 net income

American food company J M Smucker has reported that its net earnings for the fourth quarter of 2013 increased by 25% to $130.3m, compared with $104.1m for the same quarter last year.

The company stated that the net earnings reflect higher margins, despite a slight decline in net sales.

For the quarter – which ended on 30 April 2013 – net sales decreased 1% to $1.33bn, compared with $1.35bn for the same period in the previous year, primarily due to a price decline taken earlier in fiscal 2013, especially on coffee and peanut butter.

Gross profit increased by 7% to $29.9m due to favourable mix, lower manufacturing overhead driven by decreased costs and higher production volume, and an increase in sales volume.

J M Smucker chief executive officer Richard Smucker said that the record results were achieved while making significant investments towards the company’s future growth and creating value for shareholders.

"In 2013, we increased the annual dividend paid per share by nine percent, while also repurchasing nearly four percent of our shares," Smucker added.

"Our long-term focus, strong consumer-relevant brands, robust innovation, and dedicated employees are keys to this success."

J M Smucker president and chief operating officer Vince Byrd said: "Our fourth quarter results reflect the sustained momentum realized across our business, particularly in key categories such as coffee, peanut butter, and fruit spreads."

Segment-wise, the US Retail Coffee segment profit increased 18% to $147.7m, compared with $125m in 2012, while sales decreased 1% to $535.5m, compared with $542.2m in the previous year.

Retail Consumer Foods profit decreased 2% to $485.7m, compared with $463.2m in the previous year, while sales increased 5% to $485.7m, compared with $463.2m in Q4 2012.

International, Foodservice and Natural Foods reported 5% decline in net earnings to $49.5m, compared with $52m for the same period a year ago, while net sales declined 9% to $318.4m, compared to $349.9m in the earlier year.

For the full-year, the company reported an 18% rise in net earnings to $544.2m, compared with $459.7m in 2012, and net sales increased 7% to $5.8bn, compared with $5.5bn a year ago.

For fiscal 2014, the company expects net sales to be comparable to 2013, reflecting the full-year impact of price declines taken in 2013 and rationalisation of products and expected volume growth in key categories and non-GAAP net income per diluted share to be in the range of $5.65 to $5.75.

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Image: J M Smucker president and chief operating officer Vince Byrd said that the fourth quarter results reflect the sustained momentum realised across the business. Photo: Courtesy of PRNewsFoto/The J. M. Smucker Company.