CAMPBELL Soup, the world’s largest soup maker, has cut its full-year sales forecast as competition in the cheap-and-easy meals category shows no sign of cooling.
Shares of Campbell, which also makes Prego pasta sauces and V8 vegetable juices, fell as much as seven per cent in early trading, before closing down 2.3 per cent last night.
Campbell has introduced new soup flavours and increased the frequency of offers to retailers and consumers to try to fend off competition from not only private-label brands and smaller rivals, but also from companies offering easy-to-make meals.
Campbell’s US soup sales were flat in the third quarter ended 27 April compared with the same quarter last year when sales rose 14 per cent.
Condensed soup sales fell three per cent and ready-to-serve soups sales fell one per cent in the latest quarter. Total sales rose 0.4 per cent to $1.97bn (£1.17bn).
The company blamed the weak soup sales and a fall in sales of its Pepperidge Farm bakery products in the quarter for the cut in its sales forecast for the fiscal year ending July.
Campbell expects sales from continuing operations to rise about three per cent compared with its previous forecast of a four to five per cent increase.
The company also warned that full-year adjusted earnings would be at the low end of its forecast of $2.53-$2.58 per share.
Net income attributable to Campbell rose 1.7 per cent to $184m, or 58 cents per share, in the third quarter.
Excluding items, the company earned 62 cents per share, beating analysts’ estimates of 59 cents per share.