PORTLAND, Ore. — Price increases helped J.M. Smucker Co.'s first-quarter profit rise 8 percent, but the company is struggling to balance its higher costs against what it charges customers.
Most major food and beverage companies have raised their prices in the past two years to offset soaring costs for ingredients, packaging and fuel. J.M. Smucker's earnings report Thursday showed that those moves can come at a cost.
Its revenue rose 14 percent to $1.19 billion but fell short of analysts' average forecast for $1.26 billion, and its sales volume dropped as shoppers resisted higher prices.
The company said its net income for the quarter rose to $111.5 million, or 98 cents a share, from $102.9 million, or 86 cents a share last year. Excluding one-time items, it earned $1.12 a share.
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That beat analyst expectations of $1.08 a share, according to FactSet.
Company leaders said Thursday that they had anticipated softer sales volume because of higher prices, but the magnitude of the decline was greater than anticipated.
A 6 percent coffee price cut announced this week reflects a recent drop in bean prices, but it's not enough to offset all the increases before that. The company hopes, though, that it will win back some shoppers and make Smucker's prices more attractive in time for the winter holidays.
"As we navigate our way through uncharted economic waters, we continue to believe that our strategy of focusing on leading brands, combined with excellent implementation in the marketplace, will continue to yield long-term, sustainable growth," chief executive Richard Smucker said during a conference call with investors.