Campbell earnings up 17% in quarter

by Staff
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CAMDEN, N.J. — Despite a decrease in sales, earnings for Campbell Soup Co. were up 17% in the first quarter thanks to significant gross margin improvement that was driven by increased productivity.

For the quarter ended Nov. 1, the company had net earnings of $304 million, equal to 87c per share on the common stock, which compared with $260 million, or 71c per share, during the same quarter of the previous year. Sales for the quarter were $2,203 million, down 2% from $2,250 million during the same quarter of the previous year.

“We feel good about our performance in the first quarter as we delivered solid earnings growth across all of our key businesses,” said Douglas R. Conant, president and chief executive officer. “We’re especially pleased with the significant improvement in our gross margin, driven by increased productivity in our supply chain. Our U.S. Soup business faced difficult top-line comparisons with last year’s first quarter when sales increased 12%. In this year’s first quarter, we built momentum in the latter part of the quarter when, as planned, we significantly stepped up our marketing and merchandising programs. Looking ahead, we’re optimistic about our U.S. Soup business, led by the renovated Campbell’s Chunky line, innovations in our condensed portfolio and our Swanson broth business.”

The U.S. Soup, Sauces and Beverages unit has earnings of $331 million, up 5% from $314 million during the same quarter of the previous year. The segment had sales of $1,140 million, down 5% from $1,198 million during the same quarter of the previous year.

The Baking and Snacking segment had earnings of $100 million, up 17% from $83 million during the same quarter of the previous year. The segment had sales of $530 million, up 4% from $509 million during the same quarter of the previous year.

The company also is raising its 2010 guidance, saying it now expects fiscal 2010 sales growth of 4% to 5% and adjusted earnings before interest and taxes growth of 6% to 7%. This is up from an original guidance of 3% to 4% sales growth and 5% to 6% E.B.I.T. growth. 

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