Campbell soups up US sales

City A.M. Reporter
CAMPBELL Soup posted a higher-than-expected quarterly profit as a promotional spending push led to increased sales in its key US soup market after two straight quarters of declines.

The world’s largest soup maker also said yesterday that it expected full-year earnings to come in at the high end of its previous forecast, keeping a cautious view in the face of uncertain consumer spending and global markets.

In Campbell’s third quarter ended on 2 May, profit dipped to $168m, or 49 cents a share, from $174m, or 49 cents a share, a year earlier.

Excluding one-time items, earnings were 54 cents a share, topping the analysts’ average estimate of 51 cents.

Sales rose 6.9 per cent to $1.80bn, in line with the analysts’ average estimate, as results benefited from a five percentage point lift from currency exchange rates.

The firm, which also makes Pepperidge Farm cookies, said higher sales volume and a greater proportion of higher-priced items had boosted sales by four percentage points. Increased spending on promotions subtracted three percentage points.

Even as the economic downturn has led consumers to eat more meals at home, Campbell saw US soup sales fall in its first and second quarters as shoppers sought out other “simple meals” like frozen foods.

But in the latest quarter, sales in the key US soup segment rose two per cent as a volume gain of five per cent offset the increased promotions.

Sales of Campbell’s condensed soups fell one per cent as the promotions more than offset volume gains. Sales of ready-to-serve soups rose four per cent, an improvement from the first half of the fiscal year, on strong volume gains for Chunky and Select Harvest canned products.