US food manufacturer JM Smucker has posted a fall in fourth-quarter profits as sales growth was offset by increased input costs.

The company said today (9 June) that net income was down 21% to US$120.6m for the quarter ended 30 April despite an 11% rise in sales to $1.2bn.

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Smucker said costs were “significantly higher” for green coffee and soybean oil. Price increases taken over the year to offset higher commodity costs contributed to incremental gross profit but, the company admitted, “did not generate margin expansion”.

Gross margin declined from 40.6% in the fourth quarter of fiscal 2010 to 38.6% in the fourth quarter of 2011, excluding special project costs. Gross margin was also impacted by price declines on its Crisco oils during the first half of the quarter, despite higher costs.

For the full year, net income fell 3% to $479.5m. Sales rose 5% to $4.8bn.

“As we begin the new fiscal year, we remain focused on building our brands while navigating through this period of commodity cost volatility,” said executive chairman and co-CEO Richard Smucker.

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“We continue to demonstrate our ability to effectively manage these challenges while providing value to our consumers. With a number of key initiatives and new products planned for 2012, along with contributions from the recently acquired Rowland Coffee Roasters brands, we are confident in providing full year earnings per share guidance that is consistent with our stated long-term growth objectives.”

Smucker is forecasting that its cost of products sold will increase by 25% over the next financial year, driven primarily by “significantly” higher commodity costs. Smucker insisted that price increases had been taken in response to these higher costs.

The full-year impact of price increases taken during 2011 and early 2012, along with the acquisition of the Rowland Coffee Roasters brands are expected to result in a 20% increase in net sales, Smucker said.