Campbell baking unit profit up sharply in '09

by Bakingbusiness Staff
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CAMDEN, N.J. — Operating earnings within the Baking and Snacking division of the Campbell Soup Co. totaled $262 million in the year ended Aug. 2, up 118% from $120 million in fiscal 2008. The most recent year included $3 million in costs related to initiatives to improve operational efficiency and long-term profitability compared with $144 million in such costs in fiscal 2008. Excluding these items, operating earnings increased, as earnings growth in Pepperidge Farm and Arnott’s was offset mostly by the negative impact of currency and one less week.

Sales fell 10% during fiscal 2009 to $1,846 million, compared with $2,058 million in fiscal 2008. Price and sales allowances that added 7 percentage points to sales were more than offset by divestitures and acquisitions, down 6 percentage points; currency, down 6 percentage points; increased promotional spending, down 2 percentage points; one less week, 2 percentage points; and volume and mix, down 1 percentage point.

For the fourth quarter, earnings fell 4% to $69 million from $72 million, while sales dropped 13% to $466 million.

"Pepperidge Farm sales declined due to one less week and a decline in the bakery business, partially offset by growth in the cookies and crackers business, driven by continued consumer demand for Goldfish snack crackers," Campbell said. "In Australia, sales declined due to the impact of currency, one less week, divestitures and the discontinuation of private label and industrial chocolate businesses associated with the closing of a plant, partially offset by growth in the core Arnott’s branded business. The biscuit business in Indonesia achieved significant sales growth."

Overall, Campbell Soup Co. posted earnings of $736 million in fiscal 2009, equal to $2.09 per share on the common stock, down from $1,165 million, or $3.12 per share, in fiscal 2008. Net sales were $7,586 million, down 5% from $7,998 million. For the fourth quarter, earnings were $69 million, or 20c per share, down from $89 million, or 24c per share, in the same period a year ago. Fourth-quarter sales fell 11% to $1,528 million.

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