Reportable Segments

9 Months Ended

Jan. 31, 2023

Segment Reporting [Abstract]

Reportable Segments

We operate in one industry: the manufacturing and marketing of food and beverage products. We have three reportable segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The presentation of International and Away From Home represents a combination of all other operating segments that are not individually reportable.

The U.S. Retail Pet Foods segment primarily includes the domestic sales of Rachael Ray Nutrish, Meow Mix®, Milk-Bone®, 9Lives, Kibbles ’n Bits, Pup-Peroni®, and Nature’s Recipe branded products; the U.S. Retail Coffee segment primarily includes

the domestic sales of Folgers®, Dunkin’®, and Café Bustelo® branded coffee; and the U.S. Retail Consumer Foods segment primarily includes the domestic sales of Smucker’s® and Jif® branded products. International and Away From Home includes the sale of products distributed domestically and in foreign countries through retail channels and foodservice distributors and operators (e.g., health care operators, restaurants, lodging, hospitality, offices, K-12, colleges and universities, and convenience stores).

Segment profit represents net sales, less direct and allocable operating expenses, and is consistent with the way in which we manage our segments. However, we do not represent that the segments, if operated independently, would report operating profit equal to the segment profit set forth below, as segment profit excludes certain expenses such as amortization expense and impairment charges related to intangible assets, gains and losses on divestitures, the net change in cumulative unallocated gains and losses on commodity and foreign currency exchange derivative activities (“change in net cumulative unallocated derivative gains and losses”), certain divestiture, acquisition, integration, and restructuring costs (“special project costs”), as well as corporate administrative expenses.

Commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold. At that time, we reclassify the hedge gains and losses from unallocated derivative gains and losses to segment profit, allowing our segments to realize the economic effect of the hedge without experiencing any mark-to-market volatility. We would expect that any gain or loss in the estimated fair value of the derivatives would generally be offset by a change in the estimated fair value of the underlying exposures.

The following table reconciles segment profit to income before income taxes.

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022
Net sales:
U.S. Retail Pet Foods	$	758.6	$	696.6	$	2,252.8	$	2,046.2
U.S. Retail Coffee	735.1		661.8		2,042.8		1,850.1
U.S. Retail Consumer Foods	434.2		433.1		1,177.5		1,309.9
International and Away From Home	288.4		265.6		821.3		758.9
Total net sales	$	2,216.3	$	2,057.1	$	6,294.4	$	5,965.1
Segment profit:
U.S. Retail Pet Foods	$	109.0	$	95.7	$	349.4	$	275.2
U.S. Retail Coffee	204.0		213.4		537.6		572.5
U.S. Retail Consumer Foods	94.1		99.5		249.2		329.2
International and Away From Home	37.6		34.2		95.7		107.5
Total segment profit	$	444.7	$	442.8	$	1,231.9	$	1,284.4
Amortization	(55.6)		(55.3)		(166.8)		(166.1)
Other intangible assets impairment charge	—		(150.4)		—		(150.4)
Gain on divestitures – net	—		9.6		1.6		9.6
Interest expense – net	(37.9)		(39.5)		(116.7)		(122.9)
Change in net cumulative unallocated derivative gains and losses	17.5		(22.4)		(43.4)		(37.9)
Cost of products sold – special project costs (A)	(1.0)		(6.8)		(4.9)		(17.5)
Other special project costs (A)	(0.6)		(2.0)		(2.7)		(5.1)
Corporate administrative expenses	(87.1)		(64.9)		(224.7)		(195.2)
Other income (expense) – net	(4.6)		(1.5)		(4.9)		(15.3)
Income before income taxes	$	275.4	$	109.6	$	669.4	$	583.6

(A)Special project costs include certain restructuring costs, which are recognized in cost of products sold and other special project costs in the Condensed Statements of Consolidated Income. For more information, see Note 3: Restructuring Costs.

The following table presents certain geographical information.

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022
Net sales:
United States	$	2,080.8	$	1,921.8	$	5,902.8	$	5,574.2
International:
Canada	$	110.0	$	111.9	$	323.0	$	326.5
All other international	25.5		23.4		68.6		64.4
Total international	$	135.5	$	135.3	$	391.6	$	390.9
Total net sales	$	2,216.3	$	2,057.1	$	6,294.4	$	5,965.1

The following table presents product category information.

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022		Primary Reportable Segment (A)
Coffee	$	827.7	$	746.2	$	2,307.2	$	2,077.8	U.S. Retail Coffee
Cat food	271.3		243.7		821.4		707.5		U.S. Retail Pet Foods
Pet snacks	269.0		251.5		773.4		697.1		U.S. Retail Pet Foods
Dog food	241.8		219.9		729.8		696.7		U.S. Retail Pet Foods
Frozen handheld	172.6		120.2		501.4		380.9		U.S. Retail Consumer Foods
Peanut butter	184.6		194.6		438.1		606.7		U.S. Retail Consumer Foods
Fruit spreads	110.2		101.6		314.0		282.3		U.S. Retail Consumer Foods
Portion control	42.9		42.4		114.2		117.6		Other (B)
Baking mixes and ingredients	25.7		23.4		70.8		61.3		Other (B)
Juices and beverages	0.8		36.0		2.4		105.7		Other (B)(C)
Other	69.7		77.6		221.7		231.5		Other (B)
Total net sales	$	2,216.3	$	2,057.1	$	6,294.4	$	5,965.1

(A)The primary reportable segment generally represents at least 75 percent of total net sales for each respective product category.

(B)Represents the International and Away From Home operating segments, which are combined for segment reporting purposes.

(C)During the three and nine months ended January 31, 2022, the net sales within this category were primarily related to the divested natural beverage business included in the U.S. Retail Consumer Foods segment. For more information, see Note 4: Divestitures.