J.M. Smucker Q1 Report 2022
Net Sales
Net sales increased 1 percent, including a 9 percent unfavorable impact related to theJif® peanut butter product recall. Excluding noncomparable net sales in the prior year of $58.5 million for the divested businesses, as well as$4.4 million of unfavorable foreign currency exchange, net sales increased $77.9 million, or 4 percent.
The increase in comparable net sales was primarily driven by a 14 percentage point increase from net price realization, primarily reflecting list price increases for the U.S. Retail Coffee, U.S. Retail Pet Foods, and International and Away from Home businesses, partially offset by the unfavorable impact of customer returns and fees related to the Jif® peanut butter product recall. The favorable net price realization was partially offset by a 9 percentage point decrease from volume/mix, primarily due to manufacturing downtime related to the Jif® peanut butter product recall and declines for mainstream roast and ground coffee.
Operating Income
Gross profit decreased $86.9 million, or 14 percent, including an unfavorable impact related to theJif® peanut butter product recall. The decrease also reflects the lower contribution from volume/mix, primarily due to manufacturing downtime related to the Jif® peanut butter product recall, unsaleable inventory related to the recall, and the noncomparable impact of the divested natural beverage and grains and private label dry pet food businesses. Higher costs, primarily driven by increased commodity and ingredient, manufacturing and packaging costs, were offset by higher net price realization, inclusive of the unfavorable impact to net price realization from customer returns and fees related to the Jif® peanut butter product recall. Operating income decreased $79.7 million, or 31 percent, reflecting the decrease in gross profit and a$19.8 million increase in selling, distribution, and administrative (“SD&A”) expenses, partially offset by an anticipated insurance recovery related to the Jif® peanut butter product recall.
