Analyst Note
| Rebecca Scheuneman, CFA |Smucker released lukewarm results for its January-ended fiscal 2022 third quarter, with organic sales growth of 4%, driven by a 6% contribution from price, partially offset by a 2% drop in volume/mix. The volume decline was driven by ongoing weakness in Smucker’s dog food business. Despite significant investment, Smucker has not successfully stabilized the Nutrish dog food brand. Until the problem is resolved, we are glad to see management redirect production and marketing investments toward products that are resonating with consumers, such as Meow Mix cat food, Uncrustables (on pace for $1 billion in sales by 2027, from $500 million in the most recent 12 months), and coffee, which we think will continue to benefit from a shift to at-home consumption (which currently stands at 70%, up from the prepandemic 67%) with flexible work arrangements exhibiting staying power.