Across J.M. Smucker’s chief lines of business, second-quarter revenue was impacted by lower net price realization. Excluding a $184.2 million contribution from the company’s acquisition of Ainsworth Pet Nutrition in May, net sales declined by 1% to $2 billion. As Belgya points out above, part of the company’s reduction of full-year fiscal 2019 revenue estimates from $8 billion to $7.9 billion is a result of diminished pricing realization.
However, lower pricing is resulting primarily as J.M. Smucker and its competitors pass on lower commodity costs (particularly in coffee) to customers. Thus, the diminished pricing power — while the result of a competitive environment in which most manufacturers feel compelled to pass on cost savings — impacted Smucker’s gross margin only “slightly” during the quarter.