J.M. Smucker reported good results for its most recent quarter, but warned that the recent recall of Jif peanut butter would weigh on future results.
Smucker’s income for the fourth fiscal quarter came in at $2 billion, a 6% increase over the same period last year. Adjusted operating income, which strips out the effects of divestitures and currency adjustments, was up 9%. Operating income for the quarter was $302 million, a 27% increase.
However, company officials warned of the effects of a recall of Jif peanut butter that took place last month. The recall was sparked by a salmonella outbreak that sickened consumers in 12 states and was traced to a production facility in Lexington, Ky. It has cascaded to include products that were made with Jif as an ingredient, by food retailers like Giant Eagle and others.
The recall could end up costing Smucker $125 million in fiscal 2023, due to insurance deductibles, manufacturing downtime, customer returns and unsaleable inventory, as well as other recall-related costs, the company said in a statement.
Higher pricing will increase net sales in 2023 by 3.5% to 4.5%, even with a projected drop in sales volume, company officials predicted.