NEW YORK (AP) -- Annie's Inc. shares fell nearly 9 percent in premarket trading Tuesday after the natural and organic foods maker lowered its full fiscal year earnings outlook as organic wheat prices rise.
The company said it now expects earnings between 92 cents per share and 93 cents per share during the fiscal year that runs through March. That's down from its prior forecast between 97 cents per share and $1.01 per share. Analysts, on average, expected earnings of 97 cents per share, according to FactSet.
Annie's CEO John Foraker said costs in the fourth quarter will be higher than expected. He said a low supply of organic wheat is driving costs higher. Foraker made those comments during a conference call with analysts Monday.
The company, based in Berkeley, Calif., uses organic wheat to make its boxed macaroni and cheese, frozen meals and cheddar-flavored crackers that are shaped like rabbits.
Credit Suisse analyst Robert Moskow said higher organic wheat costs could spill into the fiscal year 2015, which begins in April. Moskow lowered the company's investment rating to "Neutral" from "Outperform." A "Neutral" rating is equivalent to a "Hold" rating and an "Outperform" is equivalent to a "Buy." He also dropped Annie's stock target price to $36 from $54.
Annie's Chief Financial Officer Zahir Ibrahim said in the conference call that he expects organic wheat prices to ease in the "second half of next year."
Shares of Annie's fell $3.63, or 8.7 percent, to $38.20 in premarket trading Tuesday. Annie's had its initial public offering in March 2012. Compared to Monday's closing price of $41.83, its shares have more than doubled from its IPO price of $19.