CORRECTED: Smucker results lifted by robust coffee sales, pet food push

(Reuters) - Packaged food maker J.M. Smucker Co beat analysts' estimates for quarterly sales and profit on Tuesday, driven by higher demand for its Dunkin' Donuts-branded coffees and its purchase of premium pet foods maker Ainsworth.

Reuters February 27, 2019 03:06:22 IST
CORRECTED: Smucker results lifted by robust coffee sales, pet food push

CORRECTED Smucker results lifted by robust coffee sales pet food push

(Reuters) - Packaged food maker J.M. Smucker Co beat analysts' estimates for quarterly sales and profit on Tuesday, driven by higher demand for its Dunkin' Donuts-branded coffees and its purchase of premium pet foods maker Ainsworth.

Shares of the largest U.S. coffee roaster, which also reaffirmed its full-year forecast for the second time in a week, rose about 7.6 percent to $108.75 in morning trade.

Smucker's results come in contrast to those from other packaged food companies such as Kraft Heinz Co and Hershey Co which reported sales that fell short of analysts' estimates in their latest quarter.

Smucker has been doubling down on pet food and coffee, while offloading non-core businesses like its U.S baking unit, including brands such as Pillsbury.

To expand the pet foods portfolio, the company acquired Milk Bone-owner Big Heart Pet Brands for $5.8 billion in 2015. It also bought Ainsworth Pet Nutrition for $1.9 billion last year, adding premium brands such as Nutrish and Rachael Ray to its basket.

As a result, Smucker's U.S. retail pet foods business, the company's biggest, saw a 35 percent rise in sales in the third quarter.

The company's U.S retail coffee business sales increased 2 percent, supported by higher demand for its Dunkin' Donuts-branded coffee and its premium coffee line, 1850, launched in April last year.

Total net sales rose 5.7 percent to $2.01 billion, topping the average analyst estimate of $1.99 billion - the first beat in the last four quarters, according to IBES data from Refinitiv.

"We see the stock trading up strongly around this performance, which further validates the full-year view and ... distances Smucker from the recent Kraft Heinz controversy," Stifel analyst Christopher Growe said in a client note.

Packaged food companies have come under scrutiny after Kraft Heinz disclosed a $15 billion writedown on its marquee brands while reporting a quarterly loss last week, highlighting the tough environment for the industry.

Smucker's net income fell to $121.4 million, or $1.07 per share, in the quarter ended Jan. 31, from $831.3 million, or $7.32 per share, a year earlier, as it recorded a impairment charge related to its pet foods segment.

Excluding items, the company earned $2.26 per share, beating analysts estimate of $2.01 per share.

Last week, the Folgers coffee maker projected full-year adjusted profit for fiscal 2020 above Street estimates, betting on its upcoming product launches and price hike in the pet foods segment it implemented this month.

(This story corrects paragraph 3 to drop reference to Mondelez's results)

(Reporting by Soundarya J in Bengaluru; Editing by Maju Samuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son