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Smucker lowers full-year forecast amid lower sales for third quarter

By Betty Lin-Fisher
Beacon Journal business writer

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Orrville-based food company J.M. Smucker Co. lowered its full-year net sales projection amid lower sales for the third quarter.

Shares fell sharply in reaction to the company’s news, but recovered during the day.

The company, which sells such brands as Jif and Folgers and its namesake Smucker’s jams and jellies, said its third-quarter net sales decreased 6 percent from a year ago. The company said the decrease reflected price declines, mostly in peanut butter and coffee.

The company lowered its full-year forecast to $5.55 to $5.60 from $5.72 to $5.82.

Analysts on average were expecting $5.78 per share, according to Thomson Reuters.

The company’s net income increased 8 percent to $166.7 million, or $1.59 per share, compared to $154.2 million or $1.42 per share a year ago.

Analysts on average had expected a profit of $1.68 per share on revenue of $1.53 billion.

The company said its peanut butter business has been hurt by competition and its fruit spreads category suffered from pricing pressure from competitors and a segment of consumers who are shifting away from artificially sweetened products. Company officials said they are encouraged with a recent launch of their Smucker’s natural fruit spread to expand on that market.

“We continue to navigate through a challenging operating environment,” Richard Smucker, chief executive officer, said in a news release. “This journey is supported by our leading market position with strong and healthy brands. Our innovation pipeline is extensive, and our new products are winning with customers. We continue to optimize our supply chain which, over time, improves our cost structure, margins, and cash flow, and positions us for future growth.”

Vince Byrd, president and chief operating officer said the overall retail business was “solid” for the quarter, led by growth in the U.S. retail coffee segment, the company’s largest business segment.

“We underperformed in our food service and spread businesses, but view these as near-term issues. While the fourth quarter will be a difficult financial comparison, we are optimistic about our prospect for growth as we head into the new fiscal year,” Byrd said.

Richard Smucker said that “while we expect our fourth-quarter earnings to be down compared to a strong quarter last year, we want to reiterate that our business fundamentals remain sound and our prospects for ongoing earnings growth continue.”

Smucker employs 1,540 at its company headquarters in Orrville. It reported last year that it employed 4,875 worldwide.

Smucker stock lost $3.33 per share Friday, or 3.5 percent, to close at $91.81. The stock was down as much as 6 percent early in the day and remains well below its 52-week high of $114.36 reached in August.

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her on Twitter at www.twitter.com/blinfisherABJ and see all her stories at www.ohio.com/betty.


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