J.M. Smucker has reported beat analysts’ estimates with its fourth-quarter growth, helped by demand for its coffee and pet foods brands.
The group swung back to a net profit of $191m, reversing last year’s loss, while sales were up a strong 25% to $1.81bn.
Sales of coffee in the US grew by 9% in the quarter, with profits surging up 39%, helped by lower commodity costs. Smucker however noted that it was facing growing competition in the K-cups market and will be offering more promotions and introducing new packaging to drive demand. It also noted that the promotions had reduced margins on K-cups to below that of regular ground coffee.
Meanwhile, the Consumer Foods division reported a 2% decline in sales, although this was up 5% on an underlying basis.
For the 2017 fiscal year, the company offered a forecast of adjusted earnings of $7.60 to $7.75 a share, significantly above analysts’ estimates ($6.37 a share), although it does expect sales to decline by 1% due to the sale of its US canned-milk business.