Campbell baking unit earnings ease 11% in year

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Global Baking and Snacking division of the Campbell Soup Co. totaled $315 million in the fiscal year ended July 29, down 11% from $355 million in fiscal 2011. Campbell said the decrease in earnings reflected cost inflation, increased promotional spending and higher advertising, partly offset by higher selling prices and productivity improvements.

Sales rose 2% to $2,193 million, which compared with $2,156 million in fiscal 2011. Price and sales allowances added five percentage points and currency added one point, while higher promotional spending subtracted three points and volume and mix subtracted one point.

For the fourth quarter, earnings were $83 million, down 10% from $92 million, while sales eased 1% to $556 million from $559 million.

“Sales of Pepperidge Farm products increased, driven by higher selling prices across the portfolio and volume gains, partially offset by increased promotional spending,” the company said. “In cookies and crackers, sales benefited from double-digit growth in Goldfish snack crackers, partly offset by declines in cookies. Bakery sales increased slightly, while sales of frozen products declined.”

Campbell said sales at Arnott’s were comparable to the prior year, as strong growth in Indonesia was offset by declines in Australia.

Overall, sales declines in international beverages and global simple meals contributed to a 4% decline in earnings at Campbell Soup Co. in fiscal 2012. Net income in the year ended July 29 was $774 million, equal to $2.43 per share on the common stock, down from $805 million, or $2.44 per share, in fiscal 2011. Excluding items impacting comparability in both years, adjusted net earnings declined 7%.
Net sales for the full year totaled $4,715 million, up 2% from $4,616 million in fiscal 2011.

For the fourth quarter ended July 29, the company had earnings of $127 million, equal to 40c per share on the common stock, up 27% from $100 million, or 31c per share, during the same quarter of the previous year. The most recent quarter included transaction costs associated with the Aug. 6 acquisition of Bolthouse Farms. Sales for the quarter were $1,613 million, up slightly from $1,607 million during the same quarter of the previous year.
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