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Here's How J.M. Smucker Is Doing So Far This Year

William Bias profile picture
William Bias


  • J.M. Smucker’s higher pricing action due to higher green coffee bean costs resulted in lower coffee demand in the U.S.
  • Higher coffee prices reduced coffee demand within its international, foodservice, and natural foods division as well.
  • The U.S. retail consumer foods segment represents J.M. Smucker’s only segment to increase profitability due to lower capacity expansion costs.

On Nov. 26, food and beverage company J.M. Smucker (NYSE: NYSE:SJM) came out with its Q2 fiscal year 2015 10-Q which follows up in more detail on its earnings announcement released on Nov. 19. The company has performed terribly so far this year. Let's take a look to see what's happening.

Lousy fundamentals

J.M. Smucker saw its revenue and net income decline 3.6% and 2% respectively so far this year. Both the top and bottom lines were largely affected by the U.S. retail coffee segment (see table below). The company saw huge spikes in green coffee bean costs which compelled the company to raise its prices. Consumers revolted driving segment volume down 9% resulting in the material impact on revenue and net income. Management expects that higher prices will continue to have a negative impact on the U.S. retail coffee segment's operating income in the second half of the fiscal year.

Higher green coffee prices also affected coffee demand within J.M. Smucker's international, foodservice, and natural foods segment though the segment's impact on total revenue and net income was less significant.

J.M. Smucker Year-to-Date Revenue





U.S Retail Coffee





U.S. Retail Consumer Foods





International, Foodservice, and Natural Foods





Total Revenue





J.M. Smucker Year-to-Date Operating Income





U.S Retail Coffee





U.S. Retail Consumer Foods





International, Foodservice, and Natural Foods





Total Operating Income





Source SEC Filings and author's calculations

The U.S. retail consumer foods segment saw its year-to-date sales fall 2% due to lower prices vs. the same time last year. Overall, volume was actually flat. However, negative volume in its Pillsbury portfolio served as the primary

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

emhutchins profile picture
Good analysis. That said, SJM has provided me a yield on cost of 3.15% and a 30% capital gain, so while I'm not buying more at its current valuation, I'm not selling either.

Long SJM.
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