US: Campbell profits up on lower costs

By: just-food.com | 23 November 2009

Campbell Soup Company today (23 November) posted an increase in first-quarter profits, which were boosted by lower costs and marketing expenses.

Profits rose to US$304m in the first three months to 1 November, up from $260m last year.

However, sales fell 2% to $2.2m, with volumes down 4% during the period. The group partially attributed the decline to "tough comparables" with last year, when Campbell posted a 12% jump in sales.

The company said that its US soup business benefited from eat-at-home trends, as US consumers looked to reduce spending. Its baking and snacks division, which includes Pepperidge Farm, was the only unit that saw revenues rise 4%.

Douglas Conant, president and CEO, said Campbell had delivered solid earnings growth, despite top line pressure, as cost cuts saw margins improve.

"We're especially pleased with the significant improvement in our gross margin, driven by increased productivity in our supply chain," he said in a statement.

Gross margin rose to 41.9% from 40.2% as the company cut costs, boosted productivity and raised prices.

Looking to the full year, Campbell said it expects fiscal 2010 sales growth of 4-5%. It had previously issued sales guidance of 3-4%. EBIT is expected to grow by 6-7%, up from a previous 5-6% guidance range.

For the full press release click here, or check back later for just-food's insight.

Sectors: Baby food, Chilled foods