CAMDEN, N.J. — Contributions from both Pepperidge Farm and Arnott’s helped drive a 22% increase in operating earnings within the Global Baking and Snacking division of Campbell Soup Co. in the second quarter ended Feb. 1. Earnings in the quarter totaled $107 million, up from $88 million in the same period a year ago.
Revenues, meanwhile, held steady, finishing at $640 million in the second quarter of fiscal 2015, which compared with $639 million in the same period a year ago.
For the six months ended Feb. 1, operating earnings in the Global Baking and Snacking division were $197 million, up 19% from $166 million in the same period a year ago. Revenues rose 2% to $1,267 million from $1,248 million.
“I was pleased with our Global Baking and Snacking business, which delivered solid organic top-line growth as well as strong bottom-line growth, with contributions from both Arnott’s and Pepperidge Farm,” Denise Morrison, president and chief executive officer, said during a Feb. 25 conference call with analysts.
Elaborating on the unit’s performance during the quarter, Anthony DiSilvestro, senior vice-president and chief financial officer, said the division turned in 4% organic sales growth.
“We achieved consumption and share gains in the Australian biscuit category, and Indonesia delivered another quarter of double-digit sales growth,” he said. “Within Pepperidge Farm, Goldfish crackers delivered strong sales gains, which were partly offset by softness in frozen products. Kelsen sales declined slightly, reflecting the shift of the Chinese New Year further into our third quarter. Global Baking and Snacking posted strong operating earnings, driven by the organic sales growth and lower marketing spend.”
Campbell is in the midst of a reshaping of its operations. Until recently, Campbell’s Pepperidge Farm, Arnott’s and Kelsen Group businesses operated separately. Ms. Morrison said the strategy failed to fire on all cylinders.
“This is a difficult time across the food industry,” she said. “While we have made solid progress at Campbell’s over the past three-and-a-half years to reshape our portfolio, it has not been enough. We are making necessary changes at our company, changes to the way we organize and manage our business, and changes to the way we allocate resources and assets, while managing costs to fund our growth.
“Simply put, we are taking more aggressive action on multiple fronts, while staying resolutely focused on the consumer to change the growth trajectory of our business.”
Net earnings attributable to Campbell Soup in the second quarter ended Feb. 1 were $207 million, or 66c per share, down 36% from $325 million, or 74c per share, in the same quarter a year ago. Sales were $2,234 million, down 2% from $2,281 million.For the six months, net earnings were $441 million, or $1.40 per share, down 11% from $497 million, or $1.57 per share, in the same period a year ago. Sales increased 1% to $4,489 million from $4,446 million.