Watered-down soup sales hurting Campbell as competition mounts

CAMPBELL Soup, the world’s largest soup maker, reported weak quarterly sales yesterday as higher prices at its US soup and international businesses put off price-conscious shoppers, sending its shares down five per cent.

The company, whose US soup business has struggled with more competition, said quarterly sales in that business fell four per cent, hurt by higher promotional spending by rivals, while sales in its international business fell three per cent.

Campbell, which named Denise Morrison as its new chief executive in June, has cut jobs and promotional spending and quit the Russian market to boost earnings.

In the first quarter, the company reported a higher-than-expected profit, helped by a lower advertising and promotion expenses, and stood by its forecast for the fiscal year.

Campbell, which also makes V-8 juice drinks and Pepperidge Farm Goldfish crackers, began advertising later than usual “to be more closely aligned with the start of the soup season.”

For the quarter ended 30 October, net earnings attributable to Campbell Soup were $265m (£169.5m), down from $279m a year earlier.

Per share earnings were unchanged at 82 cents due to a decline in outstanding shares. Sales fell one percent to $2.16bn. Analysts on average were expecting a profit of 79 cents a share on sales of $2.21bn.

Campbell expects fiscal 2012 adjusted earnings per share to fall five to seven per cent, with sales either flat or up to two per cent up.