Campbell biscuit and snack unit slips on strong U.S. dollar, weak demand

by Monica Watrous
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Goldfish crackers and Kelsen cookies, Campbell Soup Co.
Declines in Kelsen were offset partly by gains in Pepperidge Farm Goldfish crackers.

CAMDEN, N.J. — Operating earnings for the Campbell Soup Co.’s Global Biscuits and Snacks segment in the third quarter ended May 1 declined 8% to $86 million, and sales decreased 2% to $608 million. Excluding foreign currency translation, sales fell 1%, as declines in Kelsen were offset partly by gains in Pepperidge Farm Goldfish crackers. Campbell net earnings in the quarter were $185 million, or 60c per share on the common stock, which compared with $179 million, or 58c per share, in the previous year’s first quarter. Net sales fell to $1,870 million from $1,900 million.

Denise Morrison, Campbell
Denise Morrison, president and c.e.o. of Campbell

“Despite what continues to be a very challenging consumer environment, Campbell remains focused on becoming a leaner, more effective and efficient company,” said Denise Morrison, president and chief executive officer of Campbell. “We’re unsatisfied with our third-quarter organic sales growth, which was largely due to a weaker U.S. soup season, some challenges in V8 beverages and a weather-related disruption to our fresh carrot supply. Importantly, we understand the factors affecting our top-line performance and are addressing them.

“Year-to-date organic sales are down slightly. We expect organic sales to grow in the fourth quarter and next fiscal year, behind more robust innovation and marketing. Third-quarter adjusted EBIT declined, but was better than expected. Our year-to-date adjusted EBIT increase of 15% reflects our improved gross margin performance and the benefits of our three-year cost-savings program and organization redesign.

“Today we updated our guidance, raising our outlook for adjusted e.p.s. We continue to stay focused on driving sustainable, profitable net sales growth and creating shareholder value.”

Campbell net earnings in the nine months ended May 1 were $644 million, or $2.08 per share, down from $649 million, or $2.07 per share, in the same period of the previous year. Net sales declined to $6,274 million from $6,389 million.
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