J.M. Smucker Co reported a bigger-than-expected drop in quarterly revenue, hurt by lower sales of its Folgers coffee and pet snacks.
Smucker's U.S. coffee sales fell 7 percent in the third quarter ended Jan. 31, while profit dropped 12 percent as lower pricing and higher commodity costs weighed.
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Cheaper private-label coffee is eating into demand for Smucker's Folgers brand, while its premium Dunkin' bagged coffee is facing fierce competition from McDonald's McCafe, Starbucks and single-serve brands.
Smucker's pet foods business, its biggest in terms of sales, has also been hit by competition as rivals Mars Petcare and Nestle's Purina use promotions and discounts to lure customers.
Sales in that business, which accounted for 29 percent of its total revenue, fell 4 percent in the quarter.
Smucker's net income fell to $134.6 million, or $1.16 per share, in the latest quarter from $185.3 million, or $1.55 per share, a year earlier.
The company took a $75.7 million non-cash charge in the quarter related to certain trademarks within its pet foods business.
Excluding items, the maker of Jif peanut butter earned $2.00 per share, in line with the analysts' average estimate, according to Thomson Reuters I/B/E/S.
The company's net sales fell 5 percent to $1.88 billion, their third straight decline, missing analysts' estimate of $1.92 billion. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva)