The company’s shares fell almost 6 percent in early trading on Tuesday. In the firm’s retail grocery business, which includes brands such as Pillsbury and Jif, net sales fell 8% to $537m.
Advertisement
However, the company is facing stiff competition from Mars Petcare and Nestle’s (NESN.S) Purina, the two dominant players that are vying for a bigger share of the $29 billion US pet-food pie by using promotions and discounts.
Smucker’s limited presence in the premium pet-food category has also weighed on its sales as more pet owners spend extra dollars to feed their cats and dogs high quality food that contain organic ingredients or higher protein.
In recent moves to diversify its business and respond to changing consumer preferences, Smucker previous year bought Big Heart Pet Brands for about $3.2 billion, and in November agreed to sell its canned-milk business. Previously the company had indicated it anticipates a 1% revenue drop in fiscal 2016/17.
J.M. Smucker Co reported lower-than-expected quarterly sales due to a drop in demand for its pet food brands such as Kibbles ‘n Bits and Meow Mix.
J.M. Smucker, the parent company behind the Smucker’s line of peanut butter, jellies and ice cream toppings as well as brands such as Folger’s Coffee and Pillsbury, reported revenue of $1.82 billion in the quarter, short of Wall Street’s expectation of $1.89 billion according to analysts polled by S&P Global Capital Intelligence. The stock has risen this year, up more than 16 percent.
J.M. Smucker’s shares fell to $146.85 on the New York Stock Exchange.
Advertisement
Smucker executives told analysts on an earnings call they expects softness in pet food sales to continue through the end of the year.
