(Reuters) - Folgers coffee maker J.M. Smucker Co (SJM.N) reported a better-than-expected quarterly profit on Thursday, helped by cost-cutting, and said it would slash $100 million more in annual costs.
Smucker has resorted to cost cuts amid slowing demand for its coffee products and stiff competition in its pet foods business.
Sales in its coffee business dipped for the fourth straight quarter in the quarter ended April 30, hurt by weak demand for Folgers, while lower sales of cat food brands such as 9Lives and Meow Mix dragged down total pet foods sales by 5 percent.
But selling, distribution, and administrative expenses fell 5 percent to $334.4 million in the quarter, helped by a restructuring program announced last year, which includes job reductions and facility closures.
Smucker said it now expects annual cost cuts of $450 million by fiscal year 2020.
The company’s net income fell to $110.4 million, or 96 cents per share, in the fourth quarter ended April 30, from $191 million, or $1.61 per share, a year earlier.
Smucker recorded a $57.5 million impairment charge and a $21.5 million derivative loss in the fourth quarter.
Excluding items, the company earned $1.80 per share, beating analysts’ average estimate of $1.72, according to Thomson Reuters I/B/E/S.
Net sales dipped 1.3 percent to $1.78 billion, marking the fourth straight quarter of decline, but narrowly beat analysts’ estimates of $1.77 billion.
Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sai Sachin Ravikumar