As many of us already know, International Multifoods is going to be acquired by J.M. Smucker
International Multifoods reported earnings of $2.7 million, or $0.14 per share, compared with $7.9 million, or $0.40 per share, in the same quarter last year. If you take out $0.09 per share related to merger costs, the company earned $0.23 per share. Net sales in the quarter decreased 2.6% to $212 million.
Soon, though, it seems it will be Smucker's job to navigate a tough market with this collection of brands. Though it's interested in grasping "icon brands" that hang out in the center of the store, that's a tough space considering current healthy eating trends and the Atkins revolution.
International Multifoods' conference call (transcript courtesy of CCBN StreetEvents) did include some wisdom that may apply to other food-oriented stocks as well. It noticed that its sales faltered because some dishes, such as potato sides and pancakes, suffered because of the low-carb trend. However, it said its cake mixes and frostings are actually doing all right -- likely because dieters will often break for cake for special occasions, such as birthdays.
I have often thought the same kind of principle applied to Krispy Kreme's
Given the trends at hand, Smucker may have its hands full with this newest acquisition. Hopefully, the icons it's gained will be worth it, just as soon as these dietary fads fade away.
Is Hungry Jack your enemy? Do you regularly tell the Doughboy to take a hike? That might mean you're an Atkins dieter. Find like-minded Fools on the Low Carb Way of Life discussion board.
Alyce Lomax does not own shares of any companies mentioned. She's almost always willing to break for cake.