Food maker J.M. Smucker Co. said Thursday that its fiscal third-quarter net income dropped 11 percent as it struggled to manage higher costs and sold less of its products.
For the three months that ended Jan. 31, the company said it earned $116.8 million, or $1.03 per share. That's compared with $132 million, or $1.11 per share, a year earlier.
The company's revenue rose 12 percent to $1.47 billion, compared with $1.31 billion a year earlier. The acquisitions of Rowland Coffee and part of Sara Lee Corp.'s North American coffee and tea foodservice operations contributed $33 million and $26.9 million, respectively. But Smucker said it was disappointed with overall volume, which fell 10 percent.
Excluding one-time costs related to restructuring and a merger, the company said it earned $1.22 per share, well short of what Wall Street analysts expected on average. Its revenue also missed forecasts.
Analysts were expecting adjusted profit of $1.41 per share and revenue of $1.54 billion, according to FactSet.
Shares of J.M. Smucker sank $7.03, or 9 percent, to $71.12 in morning trading Thursday.
The maker of Folgers coffee and Jif peanut butter, as well as its namesake spreads also lowered its outlook for its full fiscal year. It expected adjusted income of $4.60 to $4.65, down from an earlier forecast for $4.90 to $5 per share. Analysts expected a profit of $4.98 per share.
"Despite having strong merchandising programs in place for the holiday period, our volume was lower than expected as a result of our higher price points coupled with lower consumer demand across the food industry," said Vince Byrd, the company's president and chief operating officer.
Meanwhile, Smucker's costs rose to $988.8 million, up 20 percent from $821.1 million, in part because of higher costs for green coffee, edible oils, peanuts and flour.
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