Smucker Results Top Expectations

J.M. Smucker Co. on Thursday reported better-than-expected profit and revenue growth for its first quarter, helped by a jump in U.S. coffee sales after a new-product launch and improvements in pricing.

Like other big food companies, Smucker has been losing out to smaller competitors that are positioning their products as fresher and more natural, as Americans shy away from traditional processed-and-packaged foods. Higher costs have also weighed on the maker of Folgers coffee and Pillsbury baking mixes recently.

In its latest quarter ended July 31, Smucker's profit grew 18% to $136.4 million from $116 million a year earlier. Per-share earnings were flat at $1.14 a share amid an 18% increase in shares outstanding.

Excluding acquisition costs, per-share earnings were $1.32, topping expectations for $1.23 a share, according to Thomson Reuters.

Overall pricing improved by 1 percentage point, as higher coffee pricing offset lower pricing for peanut butter.

Total sales jumped 47% to $1.95 billion, coming in above expectations for $1.9 billion in revenue. Sales were lifted by the company's recent acquisition of Big Heart Pet Brands, which makes Milk-Bone dog treats and Meow Mix cat food. The business contributed $561.3 to sales in the quarter.

Excluding the acquisition and foreign currency impacts, sales grew 6%.

Smucker has been struggling with weak sales of its coffee brands, in part because it has had to raise prices to combat higher costs while competition has become tougher.

The company's U.S. retail coffee sales grew 12% in the quarter, driven by the U.S. retail launch of its Dunkin' Donuts K-Cup pods in the quarter. Folgers also drove growth, as reduced promotions and pricing actions offset lower volume.

In its consumer foods segment, which includes Smucker's namesake fruit spreads, its Pillsbury products, and Crisco oil, sales were flat at $582.2 million, weighed by lower prices for Jif brand peanut butter.

The company backed its outlook for the fiscal year that will end in April 2016.

Write to Chelsey Dulaney at [e-mail]

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(END) Dow Jones Newswires

August 27, 2015 08:25 ET (12:25 GMT)

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