A range of Smucker’s marmalade, preserves and jelly, a brand owned by The J.M. Smucker Company, is seen for sale in a store in Manhattan, New York City, U.S., November 22, 2021. REUTERS
June 9 (Reuters) – J.M. Smucker, the maker of Folgers coffee, forecast annual profit above Wall Street expectations on Tuesday as resilient demand and higher prices, particularly for coffee, helped deliver a fourth-quarter profit beat.
Shares of the company rose 3% in premarket trading.
Smucker has benefited from budget-conscious consumers choosing to eat out less and prepare more meals and coffee at home, lifting quarterly sales of its U.S. retail coffee segment 12% from last year, helped by a 21 percentage point increase in pricing.
The company said that overall quarterly net sales benefited from a 10 percentage point rise in pricing that offset a 4 percentage point dip in volume.
It expects full-year adjusted earnings to be between $9.75 and $10.25 per share, the midpoint of which is higher than analysts’ average estimate of $9.79 per share, according to data compiled by LSEG.
The packaged foods maker said it continues to face a “dynamic and evolving external environment, including geopolitical, economic and policy changes,” as well as evolving consumer behavior.
Besides weakness in spending, consumers are also gravitating towards cheaper private labels and healthier food options, accelerated by the rapid adoption of GLP-1 weight loss drugs.
The trend was evident in Smucker’s annual net sales forecast, which it expects will fall 3% to 4%. Analysts had expected annual net sales to rise about 1% to $9.10 billion.
Meanwhile, the Jif peanut butter maker’s net sales for the quarter ended April 30 rose about 6% to $2.27 billion from the year-ago period, marginally above analysts’ average estimate of $2.26 billion.
It earned a quarterly profit of $2.77 per share on an adjusted basis, above analysts’ estimates of a $2.64 per share profit.
On Monday, packaged food maker Campbell’s reaffirmed its annual forecast, after trimming it earlier this year, and flagged additional strain on consumers as a war-driven surge in fuel prices dampens sentiment.
Reporting by Koyena Das in Bengaluru; Editing by Diti Pujara
