J.M. Smucker Fiscal Half-Year Report 2023

Net Sales
Net sales increased 8 percent. Excluding noncomparable net sales in the prior year of$65.0 million from the divested natural beverage and grains and private label dry pet food businesses, as well as $7.0 million of unfavorable foreign currency exchange, net sales increased $227.1 million, or 11 percent. The increase in comparable net sales was primarily driven by a 17 percentage point increase from net price realization, primarily reflecting list price increases for each of the Company’s U.S. Retail segments and for International and Away from Home, partially offset by a 6 percentage point decrease from volume/mix primarily driven by the U.S. Retail Coffee segment.

Operating Income
Gross profit decreased $10.4 million, or 1 percent. The decrease reflects a reduced contribution from volume/mix and the noncomparable impact of the divested natural beverage and grains businesses, partially offset by a favorable net impact of higher net price realization and increased commodity and ingredient, manufacturing, transportation, and packaging costs, inclusive of costs related to a voluntary recall of Jif® peanut butter products in May 2022. Operating income decreased $18.4 million, or 6 percent, primarily reflecting the decrease in gross profit and a$6.6 million increase in selling, distribution, and administrative (“SD&A”) expenses.