The J.M. Smucker Company (NYSE:SJM) continues to outperform the market. The company blew away earnings estimates, reporting $1.29 per share versus expectations of only $1.15. Gross margin improved to 36.1% from 33.7%. Sales for the entire year came in at $5.9 billion, 7% better than the previous year. All in all, it was a great report from the company and the outlook for the rest of the year looks favorable.
I like J.M. Smucker for more than just it’s products
The J.M. Smucker Company (NYSE:SJM) has products in every American pantry. The company produces Folger’s coffee, Smucker’s jam and preserves, Jif peanut butter, Crisco, Pillsbury, and Carnation milk. Over the past year, The J.M. Smucker Company (NYSE:SJM) launched 70 new products into the marketplace including hazelnut Jif, Smucker’s natural fruit spreads, and new flavors of Pillsbury frostings and baking mixes. The new line of foods and flavors allowed the company to increase market share in its key categories. For the upcoming year, the company plans to launch over 100 new products.
The J.M. Smucker Company (NYSE:SJM) continues to be a very shareholder-friendly company. Last year the company raised the annual dividend by 9% and spent $360 million to buy back shares. The annual dividend is now $2.08 per share for a yield of 2.1%. The dividend payout ratio is 42%. Over the past year, the stock is up over 34%, beating the return of the S&P 500 (INDEXSP:.INX).
The J.M. Smucker Company (NYSE:SJM) has two key partnerships in the coffee business that can provide serious growth for the company. The first is with Dunkin Brands Group Inc (NASDAQ:DNKN) and their Dunkin Brands Group Inc’ (NASDAQ:DNKN) Donuts franchise. J.M. Smucker produces the Dunkin’ Donuts brand coffee that is seen on supermarket shelves. As much as Dunkin’ Donuts is known for its donuts, the company is really a coffee company. More people go to Dunkin Brands Group Inc (NASDAQ:DNKN)’ Donuts for their coffee, and the donuts are an afterthought. With J.M. Smucker, devotees of Dunkin’ Donuts coffee can now brew their own at home.
The J.M. Smucker Company (NYSE:SJM) continues to innovate to grow the Dunkin Brands Group Inc (NASDAQ:DNKN)’ Donuts line of coffee. This year the company will incorporate a new “bakery series” that will have some of the Dunkin’ Donuts signature donut flavors. Among those flavors offered will be blueberry, jelly and chocolate.
The partnership with Dunkin Brands is showing solid growth for J.M. Smucker. In the latest quarter, sales for Dunkin’ Donuts coffee rose 11%. Sales for its Folgers coffee only rose 3%.