J.M. Smucker (SJM) logged a stronger-than-expected 9.7% rise in fiscal fourth-quarter earnings on Thursday, but the maker of Folgers coffee issued a cautious view for the full year amid slipping demand.
The condiments maker said it earned $104.1 million, or 93 cents a share, last quarter, compared with a profit of $94.9 million, or 82 cents a share, a year earlier. Excluding one-time items, it earned $1.10 a share, easily topping the Street’s view of 99 cents.
J.M. Smucker, the parent of Jif peanut butter, said revenue climbed 14% to $1.36 billion, slipping by estimates for $1.35 billion. Overall volumes declined 7% and gross margins slipped to 33.2% from 35.5%.
"While higher food prices continue to pose a challenge to consumers, we believe that softening commodity costs should provide some relief to improve volume,” Vince Byrd, the company’s president and chief operating officer, said in a statement.
Looking ahead, J.M. Smucker forecasted fiscal 2013 sales rising about 7%, translating to non-GAAP EPS of $5.00 to $5.10. Analysts had been calling for more robust EPS of $5.23.
Management hinted at future price cuts, pointing to a recent 6% slash in the price of coffee.
"In this economic environment, it is important to continue to build our brands for the long term while maintaining our ability to quickly adjust our marketing tactics to meet ever-changing consumer needs,” said Byrd.
Shares of Orrville, Oh.-based J.M. Smucker slid 0.68% to $76.57 ahead of the opening bell on Thursday.