J M Smucker sees smaller decline in annual sales on higher prices, steady demand

(Reuters) - Jif peanut butter maker J M Smucker Co forecast a smaller-than-expected decline in annual revenue on Tuesday, betting on higher prices and steady demand for its ready-to-eat meals and snacks.

Packaged food product makers have been bumping up prices to combat elevated raw materials, supply chain, labor and freight costs.

Yet, they have faced little resistance from consumers who prefer to prepare meals at home rather than spending more on eating out amid mounting recessionary worries, also evident from the latest quarterly reports of peers Kraft Heinz, Kellogg Co and Hershey Co.

Besides, J M Smucker is looking to add specialized and less expensive products such as seasonal flavors of its packaged Dunkin' coffee to the shelves of dollar stores to attract budget-conscious shoppers.

The company expects its full-year net sales to decrease 10% to 11%, compared with analysts' average estimate of a 14% fall, according to Refinitiv data.

The Uncrustables sandwiches owner also sees full-year adjusted profit between $9.20 per share and $9.60 per share, the mid-point of which is below analysts' expectations of $9.46 per share.

The full-year outlook reflects the impact of the $1.2 billion divestiture of the company's certain pet food brands, including Rachael Ray and 9Lives, as well as its private-label pet food business.

For the fourth-quarter, J M Smucker's consumer foods business reported a 14% increase in net sales, the biggest among the company's three U.S. retail segments.

That lifted the company's overall net sales in the quarter by 10% to $2.24 billion, beating analysts' estimate of $2.17 billion. Its adjusted profit of $2.64 per share also topped expectations of $2.37.

Shares of the Ohio-based company up 1% in premarket trading.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)