Smucker lowers sales, earnings projections

Higher green coffee prices are hurting second quarter sales for J.M. Smucker Co.

The food company said Wednesday that preliminary results for the second quarter ended Oct. 31 show net sales will drop 5 percent in fiscal 2015 compared with 2014’s second quarter. But net income per diluted share is expected to be $1.55 for the second quarter of 2015, compared to $1.46 for the second quarter of 2014.

The company said second quarter results are impacted by volume declines in the U.S. Retail Coffee segment, driven by a 20 percent drop in volume for the Folgers brand. Sales dropped primarily because of customer response to higher prices for roast and ground coffee lines.

Aside from the coffee problems, the balance of Smucker’s business performed well, said Richard Smucker, chief executive officer. The company expects over all coffee volumes to improve during the second half of its fiscal year, but higher green coffee costs will continue to have an impact, he said.

Smucker’s adjusted its full year outlook — the fiscal year ends April 30 — for sales to drop 1 percent, after earlier projections of sales growth. Income per diluted share, excluding certain items affecting comparability, is expected to range between $5.45 to $5.65, which is less that previous projections of $5.95 to $6.05.

The company will release second quarter earnings next Wednesday.

Smucker shares took a hit following the announcement, closing at $100.38, down $3.70 in heavier than usual trading.