Sales of $1.56 billion in the fiscal second quarter 2014 declined 4% year over year, and fell short of the $1.61 billion that analysts had anticipated. GAAP earnings of $1.46 per diluted share were up 7% year over year yet still fell short of the consensus estimate of $1.60.
Smucker noted that "pricing actions" and a planned exit from "certain portions of the Company's business in its International, Foodservice, and Natural Foods segment" lay behind the revenue decline. Nevertheless, earnings increased as Smucker improved its operating profit margin by nearly one full percentage point, and concentrated its improved earnings among fewer shares outstanding -- a consequence of share buybacks undertaken over the course of the past year.
Looking forward, CEO Richard Smucker noted that despite an uncertain economy, U.S. shoppers are showing "resilience." Volume sales of the company's products have remained "solid," encouraging Smucker to stand (mostly) behind its previously stated guidance. Smucker anticipates that this current fiscal year, now more than half over, will end with net sales declining 2% in comparison with fiscal 2013. The company previously foresaw only a 1% decline in sales. Non-GAAP earnings are still expected to come in between $5.72 and $5.82 per share. Inclusive of the effects of certain "special project costs," management is predicting earnings of $5.52 to $5.62.