The J. M. Smucker Co. (SJM – Analyst Report) is set to report second-quarter fiscal 2015 results before the opening bell on Nov 19. Last quarter, this food products manufacturer posted a negative surprise of 2.19%. Let’s see how things are shaping up prior to the announcement.

Factors to Consider

The recent hike in green coffee costs is expected to impact volumes and thus the sales of the company’s coffee segment in the second quarter.

On Nov 12, the company announced preliminary results for the quarter. Smucker stated that adjusted earnings will be flat at $1.53 per share in the second quarter, while net sales will decline 5% from the year ago-quarter, significantly impacted by volume declines in the U.S. Retail Coffee segment.

The Retail Coffee segment is expected to report 10% decline in net sales in the second quarter due to an 18% decline in volumes. The volume decline is expected to come from a 20% decline in volume in its Folgers coffee brand as customers recoiled strongly due to rising prices. In Jun 2014, the company had increased its packaged coffee prices of Folgers and Dunkin’ Donuts branded coffee products by an average 9% in response to the continuous hike in green coffee costs. (Read: Smucker Raises Coffee Price).

Segment profit is also anticipated to decrease 16% on a year-over-year basis for the U.S. Retail Coffee segment during the second quarter due to higher coffee prices.

Though the company is positive that volume trends will improve in the second half of fiscal 2015, it continues to expect negative impact from higher green coffee costs.

Due to soft volume trend in the second quarter, the company had to cut down its fiscal 2015 forecast on Nov 12. For fiscal 2015, the company now expects net sales to decline approximately 1% from fiscal 2014 compared with the prior sales growth guidance of 3%-4%.

Smucker also lowered its earnings guidance for fiscal 2015 and now expects it in the range of $5.45 to $5.65 per share, compared with the prior guidance range of $5.95 to $6.05.