Campbell Reports Organic Sales Increased of 3 Percent in Q4

Denise Morrison, Campbell’s President and Chief Executive Officer, said, “In the fourth quarter, we generated organic sales growth, with gains across most of our portfolio, including strong sales in U.S. Soup and U.S. Simple Meals.

5 Sep 2012 --- Campbell Soup Company reported its fourth-quarter and full-year results for fiscal 2012.

Net earnings for the quarter ended July 29, 2012 were $127 million, or $0.40 per share, compared with $100 million, or $0.31 per share, in the prior year. The current quarter’s reported net earnings included transaction costs associated with the Aug. 6, 2012 acquisition of Bolthouse Farms. The prior-year quarter’s reported net earnings included charges associated with the previously announced June 2011 restructuring program. Excluding items impacting comparability in both periods, adjusted net earnings decreased 8 percent to $130 million compared with $141 million in the prior year’s quarter, and adjusted net earnings per share decreased 5 percent to $0.41 compared with $0.43 in the year-ago quarter. A detailed reconciliation of current and prior-year adjusted financial information to the reported information is included at the end of this news release.

Denise Morrison, Campbell’s President and Chief Executive Officer, said, “In the fourth quarter, we generated organic sales growth, with gains across most of our portfolio, including strong sales in U.S. Soup and U.S. Simple Meals. Retailers continue to respond favorably to our new product development, and we have started shipping new products for fiscal 2013 launches.”

Morrison continued, “In fiscal 2012, we advanced our strategies to stabilize and profitably grow North America soup and simple meals, to expand our international presence and to drive growth in healthy beverages and baked snacks. In the first year of our strategic transition, we’ve renewed our focus on consumer insights, reinvigorated our brand building efforts and significantly improved our innovation pipeline. With the acquisition of Bolthouse Farms, we positioned Campbell for growth in the rapidly expanding packaged fresh market. While we’ve had some important accomplishments this year, we also recognize that driving change at Campbell will require a sharper focus on execution. Our strategic framework is a roadmap to drive disciplined and successful change at Campbell. We will continue to enhance and grow our core business, while we broaden our appeal with new consumer groups, new product platforms and new geographies.”

Morrison concluded, “As we begin the new fiscal year, we are confident that we will improve our sales and earnings trends. Today, we’ve provided specific growth ranges for fiscal 2013 sales, adjusted EBIT and adjusted EPS.”

Campbell’s fiscal 2013 guidance, which is included at the end of this news release, reflects improved trends in the company’s core business, as well as the impact of Bolthouse Farms.

Fourth-Quarter Results

For the fourth quarter, sales were $1.613 billion, comparable to a year ago. Sales were impacted by the following factors:

- Volume and mix added 3 percent
- Price and sales allowances added 3 percent
- Increased promotional spending subtracted 3 percent
- Currency subtracted 3 percent

Fourth-Quarter Financial Details

- Gross margin was 38.5 percent compared with 39.8 percent a year ago. The decrease in gross margin percentage was primarily due to cost inflation and increased promotional spending, partly offset by productivity improvements and higher selling prices.
- Marketing and selling expenses increased 5 percent to $206 million compared with $196 million in the prior year, primarily due to a 6-percent increase in advertising and consumer promotion expenses, higher spending to support innovation efforts and higher selling expenses, partly offset by a decline due to currency.
- EBIT was $203 million compared with $169 million in the prior-year quarter. Excluding items impacting comparability in both periods, adjusted EBIT decreased 10 percent to $208 million compared with adjusted EBIT of $232 million a year ago. The decrease was primarily due to the decline in the gross margin percentage and higher marketing expenses, partly offset by an increase in sales volume.
- The tax rate in the quarter was 29.8 percent compared with 31.5 percent in the prior year. Excluding items impacting comparability in both periods, the adjusted tax rate was 30.1 percent compared with 32.5 percent a year ago. The decrease was primarily due to lower taxes on foreign earnings in the current year.
- Adjusted net earnings per share were $0.41 in the current quarter compared with adjusted net earnings per share of $0.43 in the prior-year quarter, a decrease of 5 percent. The decline reflected the lower EBIT, partially offset by the benefits of a lower tax rate and fewer shares outstanding.