Campbell Soup Co. chief executive Denise Morrison has said there is “hard work ahead” after the company posted a drop in first-quarter profits.

Net earnings attributable to Campbell for the three months ended 30 October were down 5% to to US$265m. Operating earnings decreased 4% to reach $448m for the period. Net sales were down 1% to $2.16bn for the three months.

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Sales for its US simple meals division were $874m, a decrease of 3%. However, earnings jumped 8% to $260m. US soup sales fell 4%, despite the introduction of higher selling prices to offset lower volumes, the company said.

Sales for the group’s global baking and snacking were up 4%, reaching $568m. However the group reported a 12% drop in earnings to $88m. 

The International Simple Meals and Beverages division posted sales of $359m for the quarter, a 3% drop compared with a year ago. Profits dropped 16% to $43m.

Earnings for its US Beverages unit were down 45% while sales were down 3%. North America Foodservice profits were up 17% to $27m and sales were $162m, a 6% rise.  

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Campbell’s president and CEO Denise Morrison said: “We have more hard work ahead, and we won’t rest until we change the growth trajectory of the company.

“We’re making steady progress on implementing our new strategies. Our overall first-quarter performance was in line with our expectations, although the composition of our results was mixed.”

She added that fiscal 2012 will see major changes in the company and confirmed its guidance for the year ahead.

“As we’ve previously stated, fiscal 2012 will be a year of investment as we establish the foundation for the next era of profitable growth at Campbell”, she added.

Campbell’s share price fell 1.37% to $33.15 at 9:35am EST time.

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