J.M. Smucker (NYSE:SJM), the maker of Smucker's jams and Jif peanut butter, reported a better-than-expected 17.6% increase in fiscal first-quarter earnings, helped by strong sales in its U.S. coffee business. Shares jumped.
Net income rose to $136.4mln, or $1.14 per share, in the three months ended July 31, from $116mln, or $1.14 per share, a year earlier, the Orrville, Ohio-based company said in a statement on Thursday.
Stripping out items, earnings were $1.32 per share, topping the $1.23 average estimate of 15 analysts polled by Capital IQ.
First-quarter sales rose 47.5% to $1.95bn, above the Wall Street consensus of $1.9bn.
Shares gained 5.7% to $115.42 at 10:03 a.m. in New York, expanding this year’s rally to 13%.
Sales were helped by the company's recent acquisition of Big Heart Pet Brands, which makes Milk-Bone dog treats and Meow Mix cat food, and the U.S. retail launch of Dunkin' Donuts K-Cup pods during the quarter.
"Contributions from the Big Heart acquisition and new products were key drivers of this performance. Notably, our launch of Dunkin' Donuts K-Cup pods got off to a great start as we shipped over 100 million cups during the first quarter," chief executive officer Richard Smucker said in the statement.
Pricing improved by 1 percentage point, as higher coffee pricing offset lower pricing for peanut butter.
Smucker has been grappling with weak sales of its coffee brands, in part because it has had to raise prices to combat higher costs amid tough competition.
Sales in the U.S coffee retail business rose 12% to $565mln, while U.S. retail consumer foods net sales remained flat with last year at $582.2mln.
The company reaffirmed its outlook for the fiscal year ending in April 2016.