Campbell Sales Decrease 1% in Q1

As previously announced, including an estimated 1-point favorable impact from currency, Campbell expects net sales growth of 1 to 3 percent, EBIT comparable to the adjusted EBIT in the prior year and EPS growth of 2 to 4 percent from the fiscal 2010 adjusted base of $2.47.

24 Nov 2010 --- Campbell has reported that net earnings for the quarter ended Oct. 31, 2010, were $279 million, or $0.82 per share, compared with $304 million, or $0.87 per share, in the prior year.

Douglas R. Conant, Campbell's President and CEO, said, "In a challenging consumer spending environment, we delivered mixed results in our U.S. Soup business this quarter. Condensed cooking soups performed well, with sales up 7 percent, as our marketing efforts continued to resonate with consumers seeking convenient simple meals for their families. The key negative factor impacting our first-quarter results in U.S. 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.

"We intend to remain competitive in U.S. Soup through the height of the soup season, and it's likely that margin pressures will persist through the second quarter. In the second half, we plan to place greater focus on advertising and brand-building initiatives in our marketing efforts, as we adjust our promotional activity to achieve improved price realization."

Conant concluded, "In recent years, we've shown success in our healthy beverages and baked snacks businesses, which represent a significant portion of our portfolio. This year, our beverages business started off with another quarter of double-digit growth, driven by our continued innovation of 'V8 V-Fusion' beverages and effective advertising. Within baked snacks, our Pepperidge Farm business delivered solid performance, driven by innovations such as 'Deli Flats' rolls, 'Baked Naturals' crackers and the expansion of the 'Goldfish' brand. In both healthy beverages and baked snacks, our performance was driven by strong innovation, compelling advertising and effective promotional activities."

As previously announced, including an estimated 1-point favorable impact from currency, Campbell expects net sales growth of 1 to 3 percent, EBIT comparable to the adjusted EBIT in the prior year and EPS growth of 2 to 4 percent from the fiscal 2010 adjusted base of $2.47.

For the first quarter, sales decreased 1 percent to $2.172 billion. The change in sales for the quarter reflected the following factors:

•    Volume and mix added 1 percent
•    Increased promotional spending subtracted 3 percent
•    Currency added 1 percent