NEW YORK (TheStreet) -- J.M. Smucker (SJM) disappointed Wall Street after falling prices across its products failed to inspire increased consumer spending. By early afternoon, shares toppled 6.7% to $101.32.
The owner of Folgers coffee, Jif peanut butter and Smucker's jams recorded second-quarter net income of $1.52 a share, 8 cents lower than analysts surveyed by Thomson Reuters estimated.
Revenue of $1.56 billion, 4% lower than a year earlier, missed consensus by $50 million. Smucker slashed prices on many of its products because of decreased commodity prices particularly for coffee and peanuts, but this failed to significantly increase sales volume.
Volume gains were seen in its Crisco oils, Jif peanut butter and Smucker's fruit spreads segments, offsetting weakness in sales of flour and canned milk. In its retail coffee segment, revenue fell 4%, due to price cuts, despite a 1% increase in volume sales for Folgers and 11% gain for Dunkin' Donuts-branded coffee.
"The benefit of lower commodity costs has provided us with the flexibility to further support our value proposition. We believe we have this combination solidly in place for the holiday season and beyond," said Chief Operating Officer Vince Byrd in a statement.
For the full year ending April, the Orville, Ohio-based business said it expects net sales to fall 2%. The company previously forecast a sales decline of 1%. Earnings are expected in the range of $5.72 to $5.82 a share, lower than analysts' expectations of $5.84 a share.
TheStreet Ratings team rates J.M. Smucker (JM) CO as a Buy with a ratings score of A. The team has this to say about its recommendation: