J.M. Smucker issued a warning on Tuesday about its annual profit performance which would fall short of Wall Street expectations because of rising product prices and trade tensions during the Trump administration.
The Jif peanut butter manufacturer experienced a 10% decline in stock value after it predicted full-year earnings between $8.50 and $9.50 per share which fell below the $10.26 average analyst prediction according to LSEG data.
The company’s CEO Mark Smucker identified higher tariffs on green coffee as the main obstacle because the company imports this ingredient in large quantities from Brazil and Vietnam. The current U.S. tariff impact on green coffee represents our biggest exposure according to Smucker who also noted that rising commodity prices reached record levels.
The price increases that packaged food manufacturers implemented to combat rising costs have resulted in decreased consumer demand for dog snacks and sweet baked goods. The company will maintain its price management approach but recognizes the difficulty of sustaining profit margins during uncertain market conditions.
The negative forecast strengthens concerns about how trade policy volatility affects American businesses and consumers because numerous companies face difficulties sustaining profitability as tariffs and inflation spread through their supply chains.
