J.M. Smucker Cuts Full-Year Forecast On Weak Pet Food Demand
J.M. Smucker Co cut its forecast for full-year profit and sales on Friday after missing Wall Street expectations for quarterly revenue that was dented by weakness in its pet foods business.
Smucker's pet food segment, in which the company has spent heavily to bolster market share, has come under pressure in recent months due to heightened competition.
The company bought Ainsworth Pet Nutrition last year, adding brands like celebrity chef Rachel Ray's Nutrish dog and cat food.
Sales in the segment, Smucker's biggest, fell 2% in the second quarter, while two analysts polled by Refinitiv on average had projected a 0.8% rise.
Chief executive officer Mark Smucker said the company expects softness for its premium dog food offerings to continue.
The company now expects to earn between $8.10 and $8.30 per share on an adjusted basis in fiscal 2020, compared with its prior forecast range of $8.35 to $8.55.
Smucker also forecast full-year net sales to fall 3%, lower than its previous guidance of a decline of 1% to flat.
Net sales fell to $1.96 billion from $2.02 billion (€1.83 billion) in the quarter ended 31 October. Analysts on average had expected sales of $1.97 billion (€1.78 billion), according to IBES data from Refinitiv.
Net income rose to $211.2 million (€191.01 million), or $1.85 per share, from $188.5 million (€170.48 million), or $1.66 per share, a year earlier. Excluding items, it earned $2.26 per share, above Wall Street estimate of $2.13.
The Orrville, Ohio-based company's shares, which have risen about 11% this year, were down 2% in premarket trading.