Campbell baking unit earnings, sales rise in quarter

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Baking and Snacking division of the Campbell Soup Co. were $82 million in the third quarter ended May 1, up 8% from $76 million in the third quarter of fiscal 2010. Campbell said the favorable impact of currency and growth within its Pepperidge Farm brand helped drive earnings during the quarter.

Sales rose 10% to $527 million, which compared with $477 million in the same period last year. Currency added five percentage points to the growth, while volume and mix added four percentage points and price and sales allowances added two points. Increased promotional spending had an adverse impact of one percentage point during the third quarter.

“Sales at Pepperidge Farm increased, reflecting higher selling prices and volume gains,” Campbell said. “In cookies and crackers, sales increases were driven by solid gains in Goldfish snack crackers and the launch of Milano Melts cookies.

“Sales growth in bakery products was driven by gains in whole grain and Swirl breads. Sales of frozen products increased double digits, fueled by the launch of Artisan Stone Baked rolls.”

Campbell said sales at Arnott’s increased behind currency and sales gains in savory crackers, led by Shapes, Cruskits and Vita-Weat, along with growth in Tim Tam chocolate cookies and in Tiny Teddy sweet varieties.
For the nine months ended May 1, operating earnings within Baking and Snacking were $263 million, up 6% from $249 million in the same period a year ago. Net sales were $1,597 million, up 7% from $1,496 million.

“In Baking and Snacking, our second-largest segment, we continued to deliver strong performance with double-digit sales increases and strong bottom-line results this quarter,” said Denise Morrison, chief operating officer.
Overall, Campbell Soup Co. posted earnings of $187 million in the third quarter, equal to 58c per share on the common stock, up 11% from $168 million, or 49c per share, in the same period a year ago. Net sales were $1,813 million, up narrowly from $1,802 million. For the nine months ended May 1, net income was $705 million, or $2.13 per share, down from $731 million, or $2.11 per share, in the same period a year ago. Net sales were $6,112 million, down from $6,158 million.

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