The J.M. Smucker Co. got a bit more organic as it announced record first-quarter earnings and hiked its financial outlook.
The $5.9 billion Orrville-based coffee and food business said it purchased a privately-held California company, Enray Inc., that specializes in organic, gluten-free grain products under the brand name truRoots. The purchase price was not disclosed.
While Enray is a relatively small company with $45 million in sales over the last 12 months, Smucker expects it “has the potential to deliver significant growth for the foreseeable future,” said Vince Byrd, president and chief operating officer. Smucker said the gluten-free market that Enray specializes in is rapidly growing.
Not including Enray, Smucker on Wednesday reported first-quarter 2014 earnings of $131.5 million, or $1.24 a share, up from $129.4 million, or $1.17 a share, a year ago.
The company said net sales totaled $1.351 billion, down slightly from $1.368 billion. The company attributed the 1 percent decline to “price declines.”
The company beat analyst estimates on adjusted earnings and also exceeded revenue estimates.
In a prepared statement, CEO Richard K. Smucker said, “There is clearly momentum across our business as we experienced our strongest first-quarter earnings ever.”
The company said it expects fiscal 2014 sales to be down about 1 percent compared to 2013. Adjusted earnings are expected to range from $5.72 to $5.82 a share, up from previous estimates of $5.65 to $5.75 per share.
Shares of Smucker fell $1.31 to $107.79. Shares are up 26.9 percent, including dividends, since Jan. 1 and are up 30.9 percent from a year ago.
The company said it benefited from lower overall commodity prices, particularly raw coffee, compared to a year ago. Those benefits were partially reduced by price declines taken over the past year, the company said.
Retail coffee volume in the United States increased 4 percent compared to a year ago, led by a 4 percent increase in Folgers and a 6 percent increase in Dunkin Donuts packaged coffee. Sales of single-serve K-cup coffee packs increased by 14 percent, or $7.5 million compared to the first quarter a year ago.
Retail coffee sales totaled $514.4 million, down 1 percent from $520.8 million a year ago. Coffee segment profit margin totaled $146 million, up 16 percent from $126.4 million a year ago.
Consumer food sales totaled $536.4 million, up 1 percent from a year ago. Segment profit was $96.4 million, down 11 percent from a year ago.
International, foodservice and natural food sales totaled $300.1 million, down 6 percent from $320.5 million a year ago. Segment profit was $43.4 million, up 7 percent from a year ago.
Jim Mackinnon can be reached at 330-996-3544.