J. M. Smucker Cuts FY Outlook - Update

(RTTNews) - J. M. Smucker Company (SJM) on Wednesday cut its outlook for the full-year 2015, hurt largely by lower coffee sales amidst higher prices. The company also detailed a weak financial outlook for the second quarter.

The Orrville, Ohio-based company now expects full-year 2015 adjusted earnings of $5.45 to $5.65 per share with sales to decrease about 1 percent. Analysts polled by Thomson Reuters currently anticipate earnings of $6.01 per share on sales growth of 4.10 percent for the year.

Earlier, the company had expected adjusted earnings of $5.95 to $6.05 per share on sales growth of 3 to 4 percent for the year 2015.

For the second quarter, the company expects adjusted earnings of $1.53 per share and sales to decline 5 percent. Analysts currently estimate earnings of $1.66 per share on sales growth of 2.70 percent for the quarter.

Coffee segment volume and sales for the second quarter are expected to drop about 18 percent and 10 percent, respectively. The company said lower sales reflects the 20 percent decrease in volume for its Folgers brand, reflecting consumer response to higher promoted price points for its roast and ground coffee offerings.

"Our second quarter fell short of expectations primarily driven by our coffee business. Our rapid ascent of coffee prices to reflect higher green coffee costs took its toll on volume," said CEO Richard Smucker.

"As we move into the second half, we anticipate overall coffee volume trends will improve compared to our second quarter, but the pricing impact of higher green coffee costs will continue through the remainder of the fiscal year," Smucker added.

SJM is currently trading at $101.19, down $2.89 or 2.77%, on the NYSE.