J.M. Smucker (SJM) Sells Fermented Brands to TreeHouse Foods
The J.M. Smucker Co. SJM has concluded the sale of its Bick's pickles, Habitant pickled beets, Woodman's horseradish and McLarens pickled onions brands to TreeHouse Foods, Inc. THS. THS is a leading private-label food and beverage manufacturer in North America.
This all-cash deal with TreeHouse Foods, initially announced on Oct 17, 2023, is valued at around $20 million.
J.M. Smucker anticipates this divesture to not significantly impact its adjusted earnings per share in fiscal 2024. This indicates a strong underlying financial health and diversification of the company’s product range.
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Revenue Contribution & Market Positioning
The divested brands collectively generated net sales of around $60 million in the fiscal 2023. This sales figure represents a strategic realignment, allowing J.M. Smucker to focus resources and investments on areas with higher growth potential and profitability. It is a testament to the company's adaptive strategy in response to the evolving market trends and consumer preferences.
As J.M. Smucker continues to evolve its business strategy, this divesture marks a significant shift in its portfolio management. The company is not only looking to consolidate its position in the key segments but also exploring opportunities for innovation and market expansion.
SJM aims to sharpen its focus on core categories, such as coffee, spreads, frozen handheld items and pet foods in the Canada market. By emphasizing growth in these areas, the company is positioning itself to leverage its strong brands like Folgers, Smucker's, Jif, Smucker's Uncrustables, Meow Mix and Milk-Bone. Additionally, the company is maintaining its leadership in the baking category with established brands such as Robin Hood, Five Roses, Carnation and Eagle Brand.
Wrapping up
J.M. Smucker has been progressing well with core priorities, which include driving commercial excellence, reshaping portfolio, streamlining cost structure and unleashing its organization to win. Strength in such strategies has been helping the company improve in-store fundamentals and the performances of the brands. The company is implementing inflation-justified pricing actions across all businesses.
The above-mentioned transaction highlights J.M. Smucker’s commitment to optimizing its brand portfolio. To this end, it is committed to increasing its focus and resources to reshape its portfolio to achieve sustainable growth across pet food and pet snacks, coffee, and snacking categories.
The Zacks Rank #3 (Hold) stock has gained 7.7% in the past three months compared with the industry’s growth of 9.7%.
Two Solid Picks
We have highlighted two better-ranked stocks, namely MGP Ingredients, Inc. MGPI and Ingredion Incorporated INGR.
MGP Ingredients produces and markets ingredients and distillery products to the packaged goods industry. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2%, on average.
Ingredion, an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Ingredion’s current financial-year sales and earnings suggests growth of 5% and 24.7%, respectively, from the year-ago reported numbers. INGR has a trailing four-quarter earnings surprise of 23.9%, on average.
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The J. M. Smucker Company (SJM) : Free Stock Analysis Report
TreeHouse Foods, Inc. (THS) : Free Stock Analysis Report
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