However, the results beat expectations, as its soup business improved. The company says net income for the three months ended January 29 fell to $205 million. That compares with $239 million, or 72 cents per share, last year. Analysts expected 62 cents per share, according to FactSet.
Revenue edged down nearly 1% to $2.11 billion. Analysts expected $2.12 billion.
The is trying to regain lost ground after several years of declining soup sales. Shoppers have curbed their soup consumption, stopped stocking pantries or shifted to competitor’s brands. Campbell is in the midst of a turnaround plan that includes adding more expensive, higher-quality soups and broadening offerings in its snack, beverage and other categories
“We are executing a strategic turnaround in an environment of weak volume and high inflation across the food industry,” said CEO Denise Morrison in a statement. “Our first half has been impacted by headwinds in our beverages and Australian businesses, but we continue to make progress against our key growth strategies.”
Campbell Soup, which makes V8 vegetable juice and Pepperidge Farm cookies, is also facing stepped-up competition and cautious consumer spending. Its soup sales fell 2% in the U.S., hurt by weakness in ready-to-serve soups. However, the company said the business is stabilizing, and the segment’s profit improved for the fourth consecutive quarter.
“We expect improved sales in the second half, as we continue to shift our emphasis to brand building efforts that will drive consumer usage,” Morrison said.
Sales of Campbell-brand condensed soups rose 5%, helped by holiday sales and broth sales, but sales of higher-priced ready-to-serve soups sales fell 12%, as volume declined.
Sales of sauces fell 2%, although Prego pasta sauce sales rose 6%, helped by an advertising campaign.
Baking and snacking revenue was flat at $526 million. Beverage revenue rose 4%, as the company’s juice blend, V8 Splash, sold well.
Foodservice revenue rose 9% to $173 million.
Campbell has increased spending on advertising to boost its soup business. Marketing and selling expenses rose 2% overall to $297 million.
From the February 21, 2012, Prepared Foods' Daily News.