Jif peanut butter maker JM Smucker raised annual profit forecast and beat second-quarter estimates, benefiting from resilient demand for packaged and frozen foods and coffee price hikes.
Shares of the Ohio-based company were up about 5% in premarket trading, with it keeping its annual sales target intact.
With living costs continuing to remain high, consumers are increasingly opting to cook at home instead of dining out, which has led to a steady demand for the company's essential home goods, including coffee, jams, and spreads, even in the face of price increases.
The price hikes helped JM Smucker to counter soaring coffee prices, which have been pushed up by supply chain disruptions.
Smucker's US retail coffee business saw sales in the quarter rise 3% to $704 million (€672.5 million). Overall quarterly margins to rise 39% from 37.4% a year earlier.
The Dunkin' coffee maker's results came in contrast with packaged food peers Kraft Heinz and Conagra Brands, which reported disappointing sales as customers traded down for cheaper alternatives.
Performance Highlights
Smucker now expects annual adjusted earnings per share in the range of $9.70 to $10.10, compared with the prior forecast of $9.60 - $10.00.
In the quarter ended 31 October, on an adjusted basis, the company posted quarterly profit of $2.76 per share, above estimates of $2.51, according to data compiled by LSEG.
The company posted net sales of $2.27 billion (€2.2 billion) for the quarter, compared with analysts' average estimate of $2.26 billion (€2.2 billion), according to LSEG data.
J.M. Smucker said it would sell its cookie brand, Voortman, to US-based premium snacks maker Second Name Brands in a $305 million (€291.4 million) all-cash deal.
