J.M. Smucker's (SJM) Sale of Sahale Snacks to Refine Portfolio
The J.M. Smucker Co. SJM is keen on optimizing its portfolio and resources to focus on continued growth. Management signed a definitive agreement to offload its Sahale Snacks brand to Second Nature Brands, a U.S.-based creator of premium, nutritional, better-for-you snacks and treats.
The deal is priced at a cash value of nearly $34 million. The transaction includes all trademarks and The J.M. Smucker’s leased production unit in Seattle, Washington. Management expects to close the deal in the third quarter of fiscal 2024. The J.M. Smucker anticipates the divestiture to have an immaterial effect on fiscal 2024 adjusted earnings per share (EPS).
The move will enable the company to increase focus on the continued growth of its Consumer Foods business. In addition, it will enable management to enhance investment in Smucker's Uncrustables brand and build leadership in spreads.
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What’s More?
The Zacks Rank #3 (Hold) company is 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 is helping The J. M. Smucker navigate complex supply chain challenges. These are also helping the company improve in-store fundamentals and brand performance. The company is implementing inflation-justified pricing actions across all businesses.
SJM is committed to increasing its focus and resources to reshape its portfolio and achieve sustainable growth. About reshaping the portfolio, management concluded the divestiture of certain pet food brands in the fourth quarter of fiscal 2023.
The J. M. Smucker concluded the divestiture of the Private Label Dry Pet Food and Natural Beverage and Grains business in the third quarter of fiscal 2022. Prior to this, management divested the Natural Balance premium pet food business in February 2021. The company sold its Crisco oils and shortening business in December 2020.
Cost Woes Persist
The J. M. Smucker is dealing with rising costs. The ongoing cost inflation, supply-chain bottlenecks and the broader macroeconomic landscape continue to affect the company’s results and cause risks for fiscal 2024.
SJM’s shares have dropped 14.3% in the past three months compared with the industry’s decline of 8.9%.
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The J. M. Smucker Company (SJM) : Free Stock Analysis Report
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