Shares in JM Smucker closed down yesterday (17 November) after the US food group reported a fall in quarterly profits and cut its guidance for annual earnings.

JM Smucker booked a 15% drop in second-quarter profits amid higher commodity costs and a US$11.3m loss on the sale of its Europe's Best fruit and vegetable unit to Hain Celestial. It also cited "special project costs", which included charges from restructuring and M&A.

Net income was US$127.2m for the three months to 31 October, down from $149.7m a year earlier.

Smucker reported "significantly higher" green coffee costs during the quarter. Coffee is Smucker's largest business by sales and profits. The company owns coffee company Folgers.

Smucker said costs were also higher for edible oils, flour, milk, sweetener and peanuts. The company owns food brands including Jif peanut butter and Crisco cooking oils.

Operating income was down 12% to $211.6m. The fall in profits came despite an 18% rise in net sales to $1.51bn. Sales grew across Smucker's operations.

CEO Richard Smucker said the company's sales growth was a "record" and he insisted the group was managing the hike costs, pointing to a 1% increase in gross profit.

"We are effectively managing this period of significant cost inflation, where our cost of goods sold increased approximately 30% for the quarter, yet, we posted gross profit growth," Smucker said. "As always, our focus remains on effectively managing the balance between volume, market share, and profitability, while continuing to invest in our brands."

Nevertheless, Smucker lowered its forecast from annual earnings per share. It income per diluted share for its full financial year was now expected to be $4.90-5.00, exclduing special project costs of $0.60-0.65 a share.

In August, Smucker forecast income per diluted share of $5.00-5.15 before project costs of $0.55-0.60 a share.

Smucker's stock closed down 1.82% on the New York stock exchange yesterday at $71.85.

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