ORRVILLE, OHIO — The J.M. Smucker Company remains focused on enhancing its category-leading brands in the dog snacks and cat food segments, with plans for product innovation in 2025. The company revealed this and more in its financial results for the first quarter of its 2025 fiscal year ended July 31, 2024.
For its US Retail Pet Foods segment, net sales for the first quarter dropped $41.3 million, or 9%, to $399.7 million. Volume/mix decreases net sales by 6 percentage points, which the company attributed to decreased manufacturing sales related to the divesture of several pet food brands to Post Holdings, partially offset by increases in its cat food and dog snacks sectors. Lower net price realization decreased net sales by 4 percentage points, which the company mainly attributed to higher trade spend for its Jerky Treats® and Meow Mix® brands.
Segment profit increased $34 million, or 42%, to $115.3 million in the first quarter. According to The J.M. Smucker Company, this was driven by lower costs, favorable volume/mix and lower distribution expenses, partially offset by lower net price realization and increased marketing costs.
Segment profit margin was 28.8%, an increase of 1,040 basis points compared to the prior year.
“In Pet Foods, net sales were flat when excluding reduced contract manufacturing sales related to the divested pet food brands, as net sales growth in Meow Mix® cat food was offset by declines in Canine Carry Outs® and Pup-peroni® dog snacks,” said Mark Smucker, president, chief executive officer, and chair of the board at The J.M. Smucker Company. “The Milk-Bone® brand demonstrated favorable volume/mix, primarily driven by growth in soft and chewy snacks from innovation.”
Milk-Bone continues to lead the company’s dog snacks sector. According to Mark Smucker, the brand witnessed strong net sales growth of more than 60% compared to the prior year due to continued product innovations, like the launch of a new Milk-Bone Peanut Buttery Bites dog snack made with Jif peanut butter.
“This launch capitalizes on the continued humanization trends in the pet category and is already exceeding our expectations,” Mark Smucker said. “We are excited to launch the product nationally this coming January.”
Despite this, the company’s dog snacks sector is being impacted by slow-downs in discretionary spending, which was attributed to continued inflation, according to Mark Smucker.
“We remain confident in our portfolio as we continue to leverage our core strengths to drive growth for the Milk-Bone® brand through superior execution, drive trade-up and unlock households with innovation, and demonstrate the strength of our seasonal business as the leading seasonal dog snacks manufacturer,” he explained.
In cat food, Meow Mix continues to lead, witnessing mid-single-digit net sales growth and volume/mix growth during the first quarter.
“The brand has regained the #1 volume share position in the dry cat food category and is bringing exciting innovation to market early next calendar year,” Mark Smucker shared. “The category has lacked innovation the past few years, and with this upcoming launch, we plan to elevate the mealtime experience and deliver new unique flavors and textures.”
Within its pet food segment, The J.M. Smucker Company is lapping up supply chain challenges from the prior year, of which impacted the company’s product supply and margins. However, the segment’s profit margins for the first quarter remained strong, largely driven by operational improvements, according to Mark Smucker.
“Our transformed portfolio continues to highlight the benefits of focusing on brands and categories where we have a leading market share position,” he said.
Overall, first quarter net sales for the company were $2.1 billion, an increase of $319.9 million, or 18%. Excluding net sales related to the Hostess acquisition, as well as non-comparable net sales from prior year divestures, net sales increased $16.9 million, or 1%. Gross profit increased $142.4 million, or 22%. Operating income increased $46 million, or 15%.
In addition to its first quarter results, the company also updated its full-year outlook for 2025. Net sales are not expected to increase from 8.5% to 9.5%, down from the previous expectation of 9.5% to 10.5%. Adjusted earnings per share is now expected around $9.60 to $10, down from the previous expectation of $9.80 to $10.20. Capital expenditures are expected at $450 million, flat from previous expectations.
This updated guidance reflects a decline of about $100 million of contract manufacturing sales related to its divested pet food brands, according to the company.
“The updated net sales guidance reflects an ongoing dynamic consumer environment driven by inflationary pressures and diminished discretionary income affecting the dog snacks and sweet baked goods categories…” it shared.
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