Price cuts weighed on net sales from Smuckers US food business

Price cuts weighed on net sales from Smucker's US food business

J.M. Smucker has posted a dip in second-quarter sales and flat profits from its US retail consumer foods arm, the company's largest business unit by revenue.

For the three months to the end of October, Smucker booked net sales of $644m from the division, down from $664.4m a year earlier.

Smucker pointed to an impact from prices, with price cuts on products sold under the Pillsbury and Jif brands in July and last November. It said "favourable volume/mix" in the quarter had a positive one percentage point impact on sales, with growth led by Uncrustables frozen sandwiches and Eagle Brand canned milk.

Segment profit stood at $125.4m, compared to $125.6m in the second quarter of the 2014/15 financial year, amid lower costs of commodities including milk, peanuts and oils.

For the first half of the financial year, net sales from US retail consumer foods, net sales fell 1.7% to $1.23bn. Segment profit reached $242.9m, against $243.7m a year earlier.

Group-wide net sales were up 44% at $4.03bn in the first half, thanks to Smucker's acquisition of pet products business Big Heart Pet Brands. Net income increased 14% to $312.4m. Operating income grew 30% to $580.9m.

Smucker also gave an update on its forecast for annual net sales and earnings per share in the wake of its move to sell its canned milk business to Eagle Family Foods Group, a deal announced earlier this month.

The company now forecasts net sales will reach $7.9bn, compared to its previous guidance of $8bn.

Smucker tweaked its forecast for non-GAAP income per common share - assuming dilution - to a range of $5.70 to $5.80, up from $5.65 to $5.80.