J.M. Smucker misses quarterly profit estimates as high coffee prices weigh

File photo of containers of Folgers instant coffee are seen on a supermarket shelf in Norwood, Mass. (AP Photo/Steven Senne, file)

Folgers coffee maker J.M. Smucker missed Wall Street estimates for first-quarter profit on Wednesday, hurt by a rise in commodity costs as U.S. tariffs weighed.

Higher inflation has prompted packaged food companies such as J.M. Smucker and Conagra Brands to raise product prices in a bid to offset elevated input costs, which have worsened due to tariff-led expenses since the start of the year.

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The rise in prices has led to weaker product demand for J.M. Smucker, whose shares fell about seven per cent following the results.

The company, which imports green coffee majorly from Brazil and Vietnam, had warned in June that the commodity’s heavy exposure to tariffs would hurt its profitability.

The Jif peanut butter maker buys about 500 million pounds of green coffee each year and could face the brunt of 50 per cent tariffs on Brazilian imports, which were raised in July from a prior level of 10 per cent.

J.M. Smucker’s cost of products sold in the three months ended July 31 rose 23 per cent to US$1.64 billion, leading a quarterly loss of $43.9 million on a GAAP basis.

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The company posted adjusted profit of $1.90 per share for the first quarter, missing analysts’ average estimate of $1.93 per share, according to data compiled by LSEG. It had reported a profit of $185 million a year ago.

However, J.M. Smucker raised its annual net sales growth forecast to a range of three per cent to five per cent up from a prior view of two per cent to four per cent.

(Reporting by Anshi Sancheti in Bengaluru; Editing by Shreya Biswas)