The fruit spread and packaged coffee company issued weak guidance for its fiscal second-quarter Wednesday when it reported preliminary earnings results. It also cut its full-year profit target, citing a sharp drop off in its Folgers coffee business. The lowered guidance comes on the heels of cuts in forecasts for General Mills (GIS) , which lowered its revenue and profit forecasts for its fiscal year 2015, while citing weak food-industry trends in the U.S. and slowing growth in key emerging markets.
For Smucker, the company projects $1.53 in adjusted earnings per share for the quarter ended in October. This is almost 8% below the consensus analyst estimate of $1.66, according to Thomson Reuters. Revenue, meanwhile, is projected to fall 5% year over year to $1.48 billion -- missing Wall Street estimates by 7.5%.
The company cited a 20% drop in volume for its Folgers brand coffee. The company raised coffee prices 9% in July, in an effort to boost revenue and better compete with the likes of Mondelez (MDLZ) and Nestle (NSRGY) .
Nevertheless, this execution setback may not prevent the stock, which is down 3.62% on the year to date, from rebounding.