Campbell Soup Co. has met its lowered expectations for its first quarter with a fall in first-quarter sales and earnings matching a profit warning issued a fortnight ago.
The US soup giant booked a 1% drop in sales and a 6% slide in earnings per share for the three months to the end of October. Sales reached US$2.17bn and earnings per share stood at $0.82.
Campbell’s EBIT fell 7% – again matching the prediction the company made two weeks ago – to $444m due to increased spending on promotions and cost inflation.
The results are being closely watched by analysts keen to see how Campbell performed at the start of the key soup season in the US, a market where the company’s soup sales have suffered in recent months.
Campbell’s domestic soup business saw sales fall 5% during the quarter but president and CEO Doug Conant said had delivered “mixed” results.
“Condensed cooking soups performed well, with sales up 7%, as our marketing efforts continued to resonate with consumers seeking convenient simple meals for their families,” Conant said.
“The key negative factor impacting our first-quarter results in US soup was the performance of our ready-to-serve and condensed eating soups, where increased promotional spending did not produce the planned volume gains. This was due in part to even steeper promotions by competitors, which we chose not to match.”
Shares in Campbell were up 0.5% at $34.83 at 08:46 ET this morning.
Click here for the complete statement from Campbell and click here for further insight into the company’s earnings call.