Quarterly net sales fell 6% year over year to $1.78 billion, including a 4% decline in comparable net sales. On the bottom line, that translated to an 11% drop in adjusted net income, to $1.58 per share. Analysts on average were expecting earnings of $1.74 per share on revenue of $1.87 billion.
CEO Mark Smucker said the company's performance suffered because of a combination of "deflationary pricing" and shipment timing for coffee and peanut butter products, as well as competition in the premium dog food market.
"We have continued momentum in many key product categories," he added, "and we are already taking decisive actions and prioritizing initiatives that strengthen our business."
Even so, the company also lowered its full fiscal-year outlook to call for net sales to be flat to down 1% from last year (compared with its previous target for growth of 1% to 2%), and for adjusted EPS of $8.35 to $8.55 (down $0.10 per share from both ends of its prior range).
Until Smucker's strategic initiatives begin to bear tangible fruit by returning the company to sustained, profitable growth, I suspect its stock will remain under pressure.