J. M. Smucker Co on Tuesday cut its full-year earnings forecast and missed Wall Street estimates for quarterly profit and sales, blaming competition in the pet food industry and its move to cut prices on its peanut butter and coffee.
Competition
Upstart brands are winning more shelf space in supermarkets across the United States from big packaged food companies, including Smucker, as more consumers are willing to experiment with new flavours and ingredients.
As a result, Smucker's overall sales fell 6.5% to $1.78 billion (€1.6 billion) in the first quarter ended 31 July, below Wall Street's estimate of $1.87 billion (€1.68 billion), according to IBES data from Refinitiv.
"Our first quarter performance fell short of our expectations primarily due to the timing of shipments and deflationary pricing in the coffee and peanut butter categories, as well as competitive activity in the premium dog food category," said chief executive officer Mark Smucker.
Outlook
The company cut its outlook for fiscal 2020 net sales, saying that it now expects sales in the range of a 1% drop to flat. It had previously estimated sales to rise 1% to 2%.
For the rest of the year, Smucker expects to earn between $8.35 per share to $8.55 per share, lower than its previous target of $8.45 to $8.65.
Excluding one-time items, the company earned $1.58 per share in the reported quarter, missing the estimate of $1.74.
Net income rose 16.2% to $154.6 million (€139.29 million) from a year earlier.
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