US food maker JM Smucker has reported a drop in third-quarter profits, hit by higher costs of edible oils, peanuts, flour and green coffee.
For the three months to the end of January, net profit slumped 11% to US$116.8m, while operating income slid 6% to $200.4m. Smucker blamed the declines on an increase in commodity costs and a 10% drop in volumes.
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Sales in the period, however, amounted to $1.47bn, a 12% increase on the prior-year period.
Smucker president and COO Vince Byrd said that, despite having strong merchandising programmes, the company was “disappointed” with overall volumes and its impact on earnings.
The firm’s retail consumer foods segment reported a 4% increase in profit to $106.6m, as the impact of price increases offset an 11% decline in volume. Sales climbed 7% to $556.5m in the period.
“While it was a difficult quarter, we remain confident in the strength of our number one brands and our strategy to position the company for continued growth,” CEO Richard Smucker said. “Our focus remains on the long term and making strides in growing through product innovations, acquisitions, brand building, and productivity initiatives. We see economic indicators improving, and believe this will further consumer confidence, ultimately allowing consumers to adjust to market conditions.”
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