J.M. Smucker reported a better-than-expected quarterly profit as cuts in prices of its coffee brands helped sales in its U.S. coffee business to rise for the first time in 11 quarters.
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The biggest U.S. roaster, considered an industry trendsetter, reduced prices for its Folgers and Dunkin' Donuts coffee brands by 6 percent in the United States last month to woo back customers.
Smucker boosted prices last year, a move later described by the company as a "misstep" after sales volumes dropped as customers switched to cheaper brands and delayed purchases.
Sales in the company's U.S coffee retail business rose 12 percent in the first quarter ended July 31, helped by the introduction of the Dunkin' Donuts K-Cup pods and higher demand for its Folgers packaged coffee.
The company's net income rose to $136.4 million, or $1.14 per share, in the first quarter ended July 31, from $116 million, or $1.14 per share, a year earlier.
Excluding items, it earned $1.32 per share, above the average analyst estimate of $1.23, according to Thomson Reuters I/B/E/S.
Net sales at the company, also known for its Jif peanut butter, Martha White flour and Crisco shortening brands, rose 47.5 percent to $1.95 billion, beating analysts' average estimate of $1.90 billion.
The Orriville, Ohio-based company's shares closed at $109.15 on Wednesday, having risen 8 percent this year.
(Reporting by Nayan Das in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)