Campbell earnings rise 7% in fiscal year

by Staff
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CAMDEN, N.J. — The Campbell Soup Co. posted adjusted net earnings of $797 million, or $2.09 per share, in the fiscal year ended Aug. 3, which marked a 7% increase from $771 million, or $1.95 per share, in the previous fiscal year. Net sales increased 8% to $7,998 million.

The net sales growth reflected additions from volume and mix (2%), price and sales allowances (2%), currency (4%) and a 53rd week (2%). Subtractions came from increased promotional spending (1%) and divestitures (1%).

In the fourth quarter, Campbell had adjusted net earnings of $96 million, or 26c per share, which compared with $53 million, or 14c per share, in the previous year’s fourth quarter. Fourth-quarter sales jumped 13% to $1,715 million.

Consistent with its long-term target growth rate, Campbell in fiscal year 2009 expects to deliver e.p.s. growth between 5% and 7%, said Douglas R. Conant, president and chief executive officer.

"In fiscal 2009, we expect our continuing operations, excluding the negative impact of one less week in the fiscal year and recent divestitures, to deliver sales growth in excess of our long-term target range of between 3 and 4%," Mr. Conant said when fourth-quarter and fiscal-year results were announced Sept. 11. "We expect to deliver EBIT growth, excluding items impacting comparability, slightly below our long-term target growth rate of between 5% and 6%, reflecting the impact of one less week in the fiscal year, higher marketing spending behind increased innovation in the U.S. and increased investment spending in Russia and China."

Fiscal-year sales for U.S. Soups, Sauces and Beverages increased 5% to $3,674 million. Gains in Campbell’s Chunky and Campbell’s Select soups sparked a 1% increase in ready-to-serve soup. U.S. soup sales continued to benefit from the success of reduced-sodium products. Condensed soup sales were flat, but Swanson broth sales increased 11%. Operating earnings for U.S. Soups, Sauces and Beverages were $891 million, up from $861 million.

Fiscal-year sales for Baking and Snacking rose 11% to $2,058 million. Pepperidge Farm experienced sales increases across all of its businesses and saw continued growth in Goldfish snack crackers, the launch of Baked Naturals crackers and growth in distinctive cookies. Whole grain varieties and sandwich rolls drove bakery sales growth.

Operating earnings for Baking and Snacking were $120 million compared with $238 million in the previous fiscal year. The current fiscal year was affected by $144 million of restructuring charges.

Fiscal-year sales for International Soups, Sauces and Beverages increased 15% to $1,610 million. Operating earnings increased to $179 million from $168 million. Fiscal-year sales for North America Foodservice increased 3% to $656 million while operating earnings decreased to $40 million from $78 million.

Companywide, escalating cost inflation led to gross margin decreasing to 39.6% from 40.6% although that was offset partially by higher selling prices and productivity gains. Restructuring charges amounted to $175 million. Campbell repurchased 26 million shares for $903 million in the fiscal year and completed its three-year $600 million share repurchase program.

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