Great ResignationInflationSupply ChainsLeadership

Why J.M. Smucker’s Shares Are Up Today

June 9, 2016, 6:24 PM UTC
J.M. Smucker Company Announces Its Raising Coffee Prices By 9 Percent
SAN RAFAEL, CA - JUNE 05: Packages Dunkin' Donuts and Folgers coffee are displayed on a shelf at a grocery store on June 5, 2014 in San Rafael, California. Ohio-based J.M.Smucker announced that the increase in coffee bean prices due to severe drought in Brazil is prompting them to raise the price of Folgers and Dunkin' Donuts coffee by 9 percent. J.M. Smucker's fourth quarter earnings slipped 9 percent with profits of $118.5 million, or $1.16 a share, compared to$130.3 million, or $1.22 a share, one year ago. (Photo by Justin Sullivan/Getty Images)
Photo by Justin Sullivan—Getty Images

J.M. Smucker’s (SJM) quarterly net sales jumped 25 percent, beating analysts’ estimates, as demand rose for its Folgers and Dunkin’ Donuts branded coffee and the company benefited from the acquisition of pet foods maker Big Heart Pet Brands.

Shares of Smucker, which also makes Jif peanut butter, rose about 7 percent to $143 in trading on Thursday.

Smucker said its U.S. coffee sales rose 9 percent and profit surged 39 percent in the fourth quarter, mainly due to lower green coffee costs and higher sales of Dunkin’ Donuts K-Cup pods.

Last year, Smucker started selling Dunkin’ Donuts K-Cup pods, which yield higher margins than packaged coffee.

The biggest U.S. coffee roaster said last month that it would cut prices for its packaged coffee by 6 percent.

The company reported net income of $191 million, or $1.61 per share, for the quarter ended April 30. A year earlier, Smucker had a net loss of $90.3 million, or 82 cents per share.

Excluding a deferred tax benefit, Smucker earned $1.44 per share, beating the average analyst estimate of $1.20, according to Thomson Reuters I/B/E/S.

Net sales rose to $1.81 billion, topping the average estimate of $1.75 billion.

Smucker said its U.S. pet foods business, which includes Meow Mix and Milk-Bone pet foods maker Big Heart, accounted for a nearly a third of total sales.