Campbell Soup posts 25% rise in sales in Q1 boosted by acquisitions

USA – Campbell Soup reported US$2.69 million in net sales, a 25% increase in the first quarter ended Oct. 28, highlighting the benefit from the acquisitions of Snyder’s-Lance Inc. and Pacific Foods of Oregon.

Net earnings were down 29% at US$194 million, from US$275 million, in the previous year’s first quarter while organic sales declined 3%, primarily because of higher promotional spending.

US Soup, part of Campbell’s Meals and Beverages segment recorded an 11% decline to US$294 million attributed to lower gross margin percentage which was offset by lower advertising expenses.

Sales in the segment were pinned at US$1.24 million, a 0.4% increase from US$1.239 million in the previous year’s first quarter.

Organic sales decreased 5%, primarily because of declines in US soup (5%), Prego pasta sauces and Canada.

“Stabilizing soup is our top priority given the importance of this business,” said Keith R. McLoughlin, interim president and CEO.

“We’re executing the plans we outlined back in August with increased emphasis on price realization, optimized merchandising support, targeted consumer-driven innovation and (being) more effective in contemporary marketing focused on the iconic Campbell’s master brand.

We are doing the right things and are encouraged that our plans are beginning to have an impact.”

Swanson sales was boosted by category momentum, expanded distribution and a new marketing campaign.

During the period, Campbell launched Well Yes! sipping soups for on-the-go snacking.

The Campbell Fresh segment in the quarter had an operating loss of US$3 million while sales dropped by 1% to US$232 million.

The Global Biscuits and Snacks segment had operating earnings of US$154 million, up 32% from the previous year’s first quarter, while sales were down 1%, excluding the benefit of the Snyder’s-Lance acquisition and the impact of currency translation.

Campbell Soup Co. said it plans to sell its International and Fresh businesses.

“We continue to expect to announce buyers for these businesses before the end of the fiscal 2019, but our overrunning goal remains to run a highly disciplined process on a timeline that will achieve the maximum value for these attractive assets,” McLoughlin said.

McLoughlin said the company expects to name a new CEO by the end of the year after the former, Denise C. Morrison retired in May.

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