Shares of J.M. Smucker (NYSE:SJM) slumped on Tuesday following a mixed fiscal first-quarter report. Adjusted earnings beat analyst expectations, but revenue came up a bit short. The company also reduced its guidance for fiscal 2019. The stock closed down 6.6%.
Smucker reported first-quarter revenue of $1.90 billion, up 9% year over year, but $50 million below the average analyst estimate. Excluding the acquisition of Ainsworth Pet Nutrition, revenue would have declined by about 1% thanks to lower pricing in the pet food, coffee, and oils categories. Non-GAAP (generally accepted accounting principles) earnings per share came in at $1.78, up from $1.51 in the prior-year period and $0.02 better than analysts were expecting.
Smucker now expects to produce $8.0 billion of revenue in fiscal 2019, down from previous guidance of $8.3 billion. Guidance for non-GAAP EPS remained unchanged at $8.40 to $8.65, while the company knocked $30 million off its guidance for free cash flow, which is now expected to be between $770 million and $820 million for the full year.
The revenue guidance cut reflects the company's divestiture of its U.S. baking business as well as lower-than-expected first-quarter sales.
Like many large packaged-food companies, Smucker is struggling to grow sales organically. The company's well-known brands include Jif, Folgers, Smucker's, Crisco, and many others, but some are dragging down sales. During the first quarter, weak Jif sales contributed to a 1% sales decline and a 12% operating profit decline for the U.S. retail consumer foods segment.
With organic growth in negative territory, investors punished the stock on Tuesday.