Smucker Beats Profit Estimates On Coffee Buzz, Pet Food Struggles
Jams and peanut butter maker J. M. Smucker Co reported quarterly profit above market expectations on Wednesday, powered by its coffee business which sells Folgers and Dunkin' Donut brands, even as its pet food unit continued to struggle.
As more premium coffee brands and single-serve coffee pods flood the market, Smucker diversified its coffee portfolio by adding high-end options with gourmet flavours to win young customers.
Chief executive officer Mark Smucker said continued investments, including on product development and marketing, improved volumes for coffee and peanut butter brands, which helped offset the anticipated decline in its pet food unit.
Profit in its coffee business rose 3%, but in pet foods, which includes brands like Nutrish and Milk-Bone, it fell 1%.
The company said the fall in its largest unit was mostly related to the Natural Balance brand and private-label dog food.
Excluding items, the company earned $2.35 per share, beating Wall Street estimates of $2.23 per share, according to IBES data from Refinitiv.
Net sales fell about 2% to $$1.97 billion in the third quarter ended 31 January 2020, in line with analysts' estimates.
Net income rose to $187.4 million, or $1.64 per share, from $121.4 million, or $1.07 per share.