J. M. Smucker Co. (SJM) slashed prices across a majority of its coffee products, including the Folgers and Dunkin Donuts brands, marking a sharp turn back from price increases rolled out just months ago.
Smucker -- known for its namesake jams and jellies, Jif peanut butter and Pillsbury products -- said coffee prices will decrease an average of 6%. It said the cuts are driven by declines in the green coffee futures market. The company had raised prices at least four times since May 2010.
The food company, which gets most of its revenue from U.S. retail coffee, has struggled recently alongside peers with soaring commodity costs. In June, Smucker said retailers had accepted a fresh round of price increases from the company, including an 11% hike on coffee. Yet while food manufacturers are raising prices where they can, many are taking a cautious stance on how it will impact volume.
Those comments came as Smucker reported a 21% drop in fiscal fourth-quarter earnings, due primarily to a higher tax rate and a one-time gain from a divestiture last year. The company is expected to report its fiscal first-quarter results on Thursday.
Shares closed Monday at $75.91 and were inactive premarket. Through the latest close, the stock is up 16% since the start of the year.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; email@example.com