J.M. Smucker Company (SJM) reported mixed first quarter results, but raised its profit forecast. CEO Mark Smucker tells Yahoo Finance Live that "results were strong" across all of the company's business units. One of the big areas of growth for the company has been its Uncrustables business, which Smucker says is "on fire" and set to deliver $800 million in sales this year. "We're still in growth mode, even on core peanut butter and jelly," Smucker says. "In the future, we will launch more products in that same format," Smucker explains, adding that they are looking how combinations of things like meat and cheese or egg and cheese could be part of future products.
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- J.M. Smucker reporting some mixed results for its first quarter before the bell. A miss on net sales but profit beating expectations. The company also boosted its profit guidance for the full year as higher prices on its peanut butter and jelly offset rising costs. Joining us now on these results and more is Mark Smucker-- J.M. Smucker Company CEO. Appreciate you joining us this morning here. So break down the results for us here. Obviously, we saw some strength in that peanut butter market. How surprising was that?
MARK SMUCKER: You know, actually Rachelle, we had great results. And we did actually meet expectations on the top and bottom line and actually raised our guidance both for gross profit and our EPS. So results were strong across every one of our categories. That would be coffee and our pet foods, pet snacks, as well as our spreads and Uncrustables business. We had fantastic results both growing sales, as well as our volume. So great quarter for us.
- Mark, I'm glad you said that. Uncrustables business. It's my favorite part of the business. It's easy. You just throw it in your bag, you pick one out later, and then you're good to consume. But at the end of the day, when you think about how this continues to kind of be a core staple in the broader lineup of Smucker's products out there, what is the next Uncrustables moment? What is that next product innovation that the team is zeroing in on to try and drive another type of product that has the same type of fanfare than the Uncrustables has had?
MARK SMUCKER: Yeah. Uncrustables is on fire. You know, we're going to hit $800 million in sales this year. We're building our third plant, and we're still in growth mode, even on core peanut butter and jelly. Obviously, we offer peanut butter and honey, peanut butter only, we have a chocolate hazelnut execution.
And in the future, we will launch more products in that same format. You know, we're thinking about meat and cheese, egg and cheese, that would be a couple of years down the road, but it will be supported by this third plant we're building in Alabama. So lots of growth to come.
- And Mark, we have to talk coffee here. Because, I mean, that portfolio continuing to do well. You know, a lot of consumers, they're discerning. They're trying to see, maybe, I should make more coffee at home, look at some other options here. How is that market playing out? Especially when you look at the cost of food inflation?
MARK SMUCKER: Yeah. Great question. Actually, our roasting ground business has been strong this quarter. We have seen a little bit of cost relief, which we've passed along to consumers by sharpening prices. But we just launched cold brew under the Dunkin' brand. And consumers are customizing making their own-- often cold coffee drinks at home these days. And so that concentrated already brewed coffee plays into them making those coffee cocktails in the morning at home.
- Mark, you can have jelly or jam at any time of the day. But what you just said is, particularly, striking here in that it might give our viewers a sense that you want to play more in breakfast when you're talking about an egg and cheese potential. Is that something that you're looking to do more of? Playing more in breakfast and at the start of the day?
MARK SMUCKER: Yeah. It's all about occasions, right? And so breakfast is clearly an occasion that our products definitely cater to-- whether that's coffee or Uncrustables. And as you point out, potentially in the future, some other iterations on Uncrustables. But yes, breakfast is one of our key occasions. Peanut butter and jelly sandwiches are the number 1 sandwich consumed at lunch. So breakfast and lunch are big for us.
- I mean, certainly getting ready for back to school. Packing these school lunches. You want that quick go to that PB&J. Talk about the back to school influx that you're seeing, especially, as parents prepare. I mean, some parents are still going to be loyal to their brands. You know, kids are very picky, especially. How much does that help, when you're looking at the back to school market?
MARK SMUCKER: Well, back to school is a key period for us, right? And our brands perform very well during this time period. And of course, PB&J, as we just discussed, is key in that. Our business has continued to grow in schools. You know, we're selling Uncrustables in schools, we're selling Uncrustables as well at universities, golf courses, and now convenience stores. So again, that product is really just a really great success story for us.
- Mark, the reality right now too on the climate front, and something that, perhaps, you consider as well is that this is one of the hottest years on record. It's changed farming, it's changed getting the commodities for companies like yourselves and the natural resources to allow you to be able to create a lot of these products too. You know, how is this shifted the operations over at Smucker and where you kind of envision the future under a climate change challenged.
MARK SMUCKER: You know, our operations are performing well. But we have to continue to be focused on doing the right thing for this planet. And, you know, we recently launched new climate goals. We've been very successful in, you know, reducing emissions, obviously, offsetting water, you know, almost zero waste to landfill and renewable energy. So we really want to do our part. It's really important as a company, you know, that we continue to minimize our footprint and we will continue to focus there.
- And has it changed the way that you source any of the ingredients?
MARK SMUCKER: A little bit with coffee. You know, coffee comes from 40 plus countries. We have invested in initiatives to help find different coffee trees that can perform better at hotter or lower altitudes without actually introducing new genetics into that. And so there's a nonprofit called World Coffee Research that we helped to fund and continue to support. So that's just one example of ways that we can support, more globally, some of those climate initiatives.
- And Mark, obviously, it's a tough time for a lot of shoppers right now, not to mention you've got student loan repayments set to restart. A lot of shoppers looking to trade off or trade down. How do you keep a competitive edge when-- if you're looking at, say, prices inside a Walmart for a different brand or off brand or pet food or cheaper, how do you manage the competition there?
MARK SMUCKER: Well, I think the most important thing to do for us is to make sure that we're playing in all segments of our category. So if you think about coffee and even milk-bone dog biscuits, we have offerings that reach the value consumer all the way to the premium consumer. So we're offering products, whether it's Folgers or Dunkin' as a more premium offering. Consumers have choice, and we're able to meet consumers where they need to be met and make sure that we're offering products that fit their budget and fit their lifestyle.
- We do appreciate you taking the time to join us this morning. Mark Smucker, J.M. Smucker Company CEO. Thank you so much.