* Q4 adj EPS $0.99
* Q4 sales $1.07 bln vs est. $1.04 bln
* Sees adj FY EPS $4.50-$4.60 vs est $4.42
* Expects pricing pressure to persist in current fiscal yr
* Shares rise 7 pct
(Recasts; adds comments from analyst and company executive,
updates share movement)
By Abhishek Takle
BANGALORE, June 17 J.M. Smucker Co (SJM.N)
posted a better-than-expected quarterly profit, helped by
strong peanut butter sales, and the maker of Jif peanut butter
and Folgers coffee forecast strong full-year earnings, sending
its shares up 7 percent.
The company also forecast sales to rise 3 percent,
excluding acquisitions, due to pricing, better product mix and
However, the company warned that it expects the strong
promotional pricing environment, which it began to face earlier
this year, to persist in the current fiscal.
"We've seen more pressure to offer deeper deals across the
board and we've factored certainly some of that into our
forecast for next year, but as the year goes on we're just
going to have to be responsive," a company executive said on a
conference call with analysts.
The biggest issue facing the company is that its major
customer, Wal-Mart Stores Inc (WMT.N), is rolling back prices,
Jefferies & Co analyst Scott Mushkin said.
"(Walmart is) selectively selling things at incredible
discounts and it is posing some challenges and that is the
biggest issue not only for Smucker but for the whole space,"
said Mushkin, who calls Smucker his "core holding" in the
A company executive said sales of Folgers coffee were being
hurt by pricing rollbacks by "a very large customer."
Smucker, which raised the list prices for the majority of
its Folgers, Dunkin' Donuts, Millstone and Folgers Gourmet
Selections coffees in May, is also keeping a close eye on
coffee prices, given the "historic highs" the commodity has
touched in the past week.
The company expects to earn $4.50 a share to $4.60 a share
for the year, ahead of expectations for earnings of $4.42 a
share on sales of $4.75 billion.
Shares of Smucker were up 6 percent at $61.20 Thursday
afternoon on the New York Stock Exchange.
For the quarter ended April 30, the company, which also
sells Pillsbury flour and Crisco oils, said sales at its U.S.
retail consumer segment rose 8 percent, excluding divestitures,
while segment margins improved to 26.1 percent.
In contrast, its coffee retail business, which had driven
earnings after the company acquired the Folgers packaged coffee
business in November 2008, fell 1 percent, with a 4 percent
decline in volume as the company lapped strong volumes last
Net earnings for the quarter were $120.6 million, or $1.01
a share, compared with $94.3 million, or 80 cents a share, last
Excluding items, the company earned 99 cents a share,
handily beating analysts' expectations for earnings of 80 cents
Sales in the quarter came in flat at $1.07 billion, but
still beat expectations for sales of $1.04 billion.
(Reporting by Abhishek Takle in Bangalore; Editing by Jarshad
Kakkrakandy, Anne Pallivathuckal)