Campbell baking unit Q1 earnings climb 20%

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Baking and Snacking division of the Campbell Soup Co. totaled $100 million in the first quarter ended Nov. 1, up 20% from $83 million in the same period a year ago. The increase reflected margin-driven growth in Arnott’s and Pepperidge Farm, as well as the favorable impact of currency.

Sales rose 4% during the quarter to $530 million, up from $509 million. Currency added 3 percentage points to sales during the quarter, while price and sales allowances added 2 percentage points and volume and mix and acquisitions both added 1 percentage point. The gains were offset partially by increased promotional spending, which adversely affected sales by 3 percentage points.

"Pepperidge Farm sales were flat, as gains in the bakery business were offset by declines in the cookies and crackers business," Campbell said. "In the bakery business, sales increased due to the acquisition of Ecce Panis, Inc., mostly offset by increased promotional spending. In the cookies and crackers business, sales decreased as declines in cookies were mostly offset by the continued solid growth of Goldfish snack crackers.

"In Australia, sales increased due to the favorable impact of currency and significant growth in Arnott’s, led by higher sales of Tim Tam biscuits."

Overall, Campbell Soup Co. posted earnings of $304 million in the first quarter of fiscal 2010, equal to 87c per share on the common stock, up from $260 million, or 71c per share, in the first quarter of fiscal 2009. Net sales were $2,203 million, down 2% from $2,250 million.

The company revised its fiscal 2010 guidance, raising its earnings-per-share growth target to 9% to 11%, up from 5% to 7%. Sales growth was raised to 4% to 5%, up from 3% to 4%.

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