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After a massive recall that affected nearly 50 types of Jif peanut butter products sold in the U.S. due to potential Salmonella contamination, parent company J.M. Smucker (SJM) is warning of a major loss in fiscal 2023.
The company said Tuesday that it would be hit with $125 million in losses in the full year due to the recall, Reuters reported.
J.M. Smucker’s shares were down 3% in premarket trading on Tuesday upon the news, according to the news outlet.
The Orville, Ohio-based company also said that its Folgers coffee brand would have a 90-cent impact on its profits, as reported by Reuters.
J.M. Smucker offered a refund for the recalled peanut butter products, which along with manufacturing downtime and unsaleable inventory, accounts for the $125 million loss to come in fiscal 2023, Cleveland.com reported.
The company does expect $50 million in costs of the May recall to be covered by insurance, the news outlet said.
The Food and Drug Administration and the Centers for Disease Control and Prevention are investigating the Salmonella outbreak, which they believe occurred at a J.M. Smucker facility in Lexington, Kentucky.
Mark Smucker, J.M. Smucker’s president and CEO , said during its earnings call on Tuesday that the company is working with the FDA to get the facility operational again, according to Cleveland.com
J.M. Smucker also has a facility in Memphis, Tennessee, that produces Jif peanut butter.
The multistate recall also impacted numerous other companies’ products that use the Jif peanut butter as an ingredient, forcing the recall of several more products due to possible Salmonella contamination.
J.M. Smucker reported a net sales increase of 6% for fiscal year 2022, up $113.6 million. Net sales for the full year were $8 billion.
Photo: Scott Olson/Getty Images
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