J.m. Smucker Co. has a market cap of $8.67 billion; its shares were traded at around $76.15 with a P/E ratio of 16.2 and P/S ratio of 1.8. The dividend yield of J.m. Smucker Co. stocks is 2.5%. J.m. Smucker Co. had an annual average earning growth of 10% over the past 10 years. GuruFocus rated J.m. Smucker Co. the business predictability rank of 2.5-star.
Highlight of Business Operations:Net sales for the first six months were $2,702.8 million in 2012, and increased $376.6 million, or 16 percent, compared to the first six months of 2011, driven primarily by net price realization. The Rowland Coffee brands acquired during the first quarter of 2012 contributed approximately two percent to net sales for the first six months of 2012, and combined with favorable sales mix and the impact of foreign exchange, offset a two percent decline in volume, compared to the first six months of 2011. Volume gains were realized in Pillsbury® baking mixes, Santa Cruz Organic® beverages, Bicks® pickles, and Jif® peanut butter, but were more than offset by volume declines in Crisco® shortening and oils, Folgers® coffee, and Pillsbury® flour.
Operating income decreased $28.4 million, or 12 percent, in the second quarter of 2012, compared to 2011. Excluding special project costs in both periods, operating income decreased $21.7 million, or eight percent, and declined from 20.6 percent of net sales in 2011 to 16.0 percent in 2012. Both operating income measures include a loss of $11.3 million on the divestiture of the Europes Best® business in 2012.
Operating income decreased $12.9 million, or three percent, in the first six months of 2012, compared to 2011, driven by the $11.3 million loss on the sale of the Europes Best® business. Operating margin for the first six months of 2012 was 14.5 percent, compared to 17.4 percent in 2011. Excluding the impact of special project costs in both periods, operating income decreased $11.3 million, or two percent, and declined from 19.7 percent of net sales in 2011, to 16.5 percent in 2012.
The U.S. Retail Coffee segment net sales increased 29 percent in the second quarter of 2012, compared to the second quarter of 2011, primarily reflecting price increases taken over the last 12 months. Segment volume decreased four percent for the second quarter of 2012, excluding Rowland Coffee, compared to the second quarter of 2011. Volume declines for the Folgers® brand were in line with the overall segment while Dunkin Donuts® packaged coffee experienced a three percent decline. The acquisition of Rowland Coffee contributed approximately $26.7 million to segment net sales, representing six percentage points of the segment net sales increase. Contributing to favorable sales mix in the second quarter of 2012, net sales of Folgers Gourmet Selections® and Millstone® K-Cups®, increased $29.8 million, compared to the second quarter of 2011, also representing six percentage points of segment net sales growth, while contributing only one percentage point growth to volume.
Cash provided by operating activities in the first six months of 2012 was $59.9 million, compared to $19.5 million in 2011, as cash generated from earnings offset working capital requirements in both periods. The increase in cash provided by operations in the first six months of 2012, compared to 2011, was driven by a decrease in working capital requirements as the increases in commodity costs on higher inventory levels were more than offset by the timing of income tax payments and the collection of trade receivable balances. As the Easter holiday occurred later in 2011, more of the collection cycle occurred in the first six months of 2012, compared to the first six months of 2011. Cash provided by operating activities in the first six months of 2012 included the net proceeds from the settlement of interest rate swaps of $17.7 million.
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