The J.M. Smucker Company has reported that supply chain disruptions have adversely affected its U.S. Retail Pet Foods segment during the third quarter of fiscal year 2025, which ended on January 31. Net sales for this division were $423 million, marking a 9% decrease from the same period last year. This decline was primarily due to reduced sales in dog snacks and lower contract manufacturing sales related to previously divested pet food brands, though there was a slight offset from increased cat food sales.
Despite the drop in net sales, the segment’s profit rose by 7% to $116.8 million, up from $109.5 million in the prior year. The company attributed this profit increase to lower costs, partially counterbalanced by unfavorable volume and mix. The segment’s profit margin also improved by 410 basis points, reaching 27.6%.
Over the nine months leading up to January 31, the pet food division’s net sales totaled $1.27 billion, down from $1.37 billion in the previous year. However, segment profit saw a significant rise to $353.5 million, compared to $288 million in the prior year.
Mark Smucker, the company’s Chair of the Board, President, and Chief Executive Officer, noted that supply chain disruptions had a $30 million negative impact on results for the Milk-Bone dog snacks and Meow Mix wet cat food brands. The company expects to return to full distribution for both brands in the fourth quarter. Additionally, Milk-Bone has been experiencing slowdowns in discretionary spending, which Smucker attributed to inflationary pressures.
“We remain confident in our portfolio as we continue to focus on driving growth for the Milk-Bone brand, with its strong leadership position in the category,” Smucker stated. “In cat food, we continue to see tailwinds as the cat population is projected to grow and anticipate further share growth for the Meow Mix brand. Dog snacks and cat food remain attractive categories, and e-commerce trends continue to be positive for our portfolio.”
Overall, the company’s net sales for the third quarter were $2.19 billion, a 2% decrease from $2.23 billion in the previous year. Operating income reported a loss of $594 million, a significant decrease of $891.4 million compared to the prior year. Gross profit, however, increased by $55 million, or 7%, which the company attributed to higher net price realization and lower costs.
“Our third quarter performance reflects the continued execution of our strategy and ability to deliver positive results in a dynamic operating and consumer environment,” Smucker commented. “Net sales for the quarter would have been above our expectations; however, we experienced certain supply chain disruptions that negatively impacted our results.”
The company is taking measures to address these challenges and anticipates improved performance in the coming quarters as supply chain issues are resolved.
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