Campbell baking unit profit climbs in '14

by Eric Schroeder
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CAMDEN, N.J. — Lower administrative expenses combined with growth in Pepperidge Farm and the addition of the Kelsen Group boosted earnings within the Global Baking and Snacking division of the Campbell Soup Co. in fiscal 2014. Earnings for the year ended Aug. 3 totaled $332 million, up 5% from $316 million in fiscal 2013.

Sales increased 7% to $2,440 million from $2,273 million in fiscal 2013. Sales benefited from the acquisition of the Kelsen Group, which contributed $193 million, or 8 percentage points, during the year. Price and sales allowances added 2 points, the 53rd week added 2 points, and volume and mix added 1 point. Promotional spending subtracted 3 points, and currency subtracted 3 points.

During the fourth quarter ended Aug. 3, operating earnings in the division totaled $98 million, up 17% from $84 million in the same period a year ago. Net sales increased 10% to $628 million,

“Sales of Pepperidge Farm products decreased, driven by increased promotional spending partly offset by volume gains,” the company said of fourth-quarter results. “Sales of cookies and crackers were comparable to prior year with gains in Goldfish snack crackers offset by declines in Pepperidge Farm adult cracker varieties.

“Sales of frozen and other products decreased. Sales of fresh bakery products increased, driven by volume gains in bread and rolls. Sales at Arnott’s decreased due to declines in Australia and the negative impact of currency, partly offset by strong gains in Indonesia.”

In a Sept. 8 conference call with analysts to discuss fiscal 2014 results, Denise Morrison, president and chief executive officer of parent Campbell Soup Co., said the company will drive growth at Pepperidge in fiscal 2015 “by executing against all the drivers of demand, including increased innovation, particularly in the back half of the year.”

Overall, net income at Campbell Soup in fiscal 2014 was $818 million, equal to $2.59 per share on the common stock, up 79% from $458 million, or $1.44 per share, in fiscal 2013. Net sales for the year were $8,268 million, up 3% from $8,052 million.
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