Sales increased but profits slightly decreased at J.M. Smucker Co. in the most recent quarter, reflecting problems with two of the company’s mainstays: coffee and peanut butter.
Net sales for the quarter ending Oct. 31 were $2.21 billion, a 7.6% increase over the same quarter last year. Net income was $191.1 million, a 7.2% decline from last year. The operating margin was 13.3%, a decrease of 199 basis points from last year.
Pet food was especially profitable for Smucker, with sales up 9.1%, to $765.2 million, and profit up 21%. On the other hand, profit on coffee was down 9.7% year-over-year, even though sales were up 10%, to $709.8 million. Higher coffee bean prices accounted for most of this situation, along with “increased marketing investment,” according to company officials.
Smucker’s U.S. Retail Consumer Foods segment had a sales decline of 2%, to $432.2 million, and a drop in profit of 9.7%, to $100.3 million. Factors include the divestiture of Smucker’s natural beverage and grains business, higher prices for raw materials and packaging, and a recall of Jif peanut butter in a salmonella contamination incident.
However, the company raised its guidance and now expects net sales to be up 5.5% to 6.5% over last year.
“Enabled by the extraordinary contributions of our people, we delivered strong results that exceeded our expectations, reflecting the strength of our iconic brands, our focus on execution, and the continued advancement of our strategic priorities,” CEO Mark Smucker said in a statement.
