The Orrville, Ohio, company made $45.6 million, or 80 cents a share, for the quarter ended Oct. 31, compared with the year-ago $46.4 million, or 79 cents a share. Excluding certain items, earnings fell to 83 cents a share from 86 cents a year earlier.
Sales slipped to $605 million from $606 million a year ago. Analysts surveyed by Thomson Financial were looking for an 85-cent profit on sales of $613 million.
"Despite escalating raw material costs, we delivered earnings growth consistent with our sales growth," said co-CEO Tim Smucker. "We expect this difficult cost environment to continue, and we remain focused on taking actions to mitigate these costs."
Gross margin fell 2 percentage points to 31.6%, partly due to higher manufacturing expense and increased raw material costs, primarily soybean oil, wheat, and certain fruits. Freight related costs were also up over the prior year. The company said continues to take pricing actions to offset a portion of the increased input costs. Due to the timing of these pricing actions, current cost increases have not been fully offset.
Smucker reaffirmed its full-year outlook, saying it expects earnings and sales to rise 4% from a year ago.