Campbell: Baking and Snacking sales up 11% in Q3/2010

Camden / NJ. (csc) Campbell Soup Company reported its fiscal 2010 third-quarter results. Third-Quarter Summary: Sales increased seven percent to 1’802 million USD. U.S. soup sales increased two percent on volume gains of five percent; U.S. beverages sales increased 13 percent. Continued gross margin improvement driven by increased productivity. Campbell expects full-year adjusted net earnings per share growth at the high end of range of nine to eleven percent.

Net earnings for the quarter ended May 02, 2010, were 168 million USD, or 0,49 USD per share, compared with 174 million USD, or 0,49 USD, in the prior year. Excluding all items impacting comparability in both periods, adjusted net earnings rose nine percent to 186 million USD compared with 171 million USD in the prior year´s quarter, and adjusted net earnings per share grew 13 percent to 0,54 USD in the current quarter compared with 0,48 USD in the year-ago quarter. The current quarter´s reported net earnings included adjustments related to the previously announced restructuring program and a deferred tax expense related to the enactment of U.S. health care legislation in March 2010.

Douglas R. Conant, Campbell´s President and CEO: «We delivered another quarter of strong adjusted earnings growth, driven by an improvement in volume trends, coupled with continued gains from productivity and favorable currency. Our U.S. beverages and sauces businesses had an outstanding quarter with strong top- and bottom-line performance. In addition, U.S. soup delivered strong volume gains, particularly in ready-to-serve soups. The promotional plans we executed in the third quarter drove volume growth in all formats – condensed, ready-to-serve and broth. We also were pleased with the earnings growth of our Baking and Snacking segment, led by Pepperidge Farm. Importantly, our products used to prepare meals at home continued to resonate with consumers. Meal makers – which include condensed cooking soups, broth and sauces – are crucial to how we will compete and win in the simple meals category. Based on our third-quarter performance and outlook for the remainder of the year, we expect adjusted net earnings per share growth to be at the high end of our range».

Fiscal 2010 Guidance

Campbell expects sales growth of 2,5 to 3,5 percent, adjusted earnings growth before interest and taxes (Ebit) of six to seven percent and adjusted net earnings per share growth (EPS) at the high end of the nine- to eleven-percent range from the fiscal 2009 adjusted base of 2,21 USD. This guidance includes the anticipated impact of currency translation.

Summary of Fiscal 2010 Third-Quarter and Year-to-Date Results by Segment

The complete summary by segment is available on campbellsoupcompany.com – here bakenet:eu confines itself to «Baking and Snacking».

Sales for Baking and Snacking were 477 million USD in the third quarter, an increase of eleven percent from a year ago. A breakdown of the change in sales follows:
Volume and mix added three percent
Price and sales allowances added one percent
Increased promotional spending subtracted three percent
Currency added nine percent
Acquisitions added one percent

Further details of sales results included the following:

• Sales of Pepperidge Farm increased primarily due to the acquisition of Ecce Panis Inc. and gains in the cookies and crackers business.
  • Excluding the acquisition of Ecce Panis, sales from the bakery business were comparable to the prior year, as volume increases were mostly offset by increased promotional spending.
  • In the cookies and crackers business, sales increased, reflecting the continued solid growth of «Goldfish» snack crackers, partly offset by a decline in cookies.
• In Australia, sales increased due to currency and continued growth in Arnott´s, led by chocolate snacks, partially offset by declines in both savory and sweet biscuit products.

Operating earnings were 76 million USD, compared with 57 million USD in the prior-year period. The prior-year quarter included one million USD in costs related to the restructuring program. The increase in operating earnings was due to the favorable impact of currency and margin growth in Pepperidge Farm.

For the first nine months, sales increased eight percent to 1’496 million USD. A breakdown of the change in sales follows:
Volume and mix added two percent
Price and sales allowances added one percent
Increased promotional spending subtracted three percent
Currency added seven percent
Acquisitions added one percent

Operating earnings were 249 million USD, compared with 193 million USD in the year-ago period. The prior-year period included three million USD in costs related to the restructuring program. The increase in operating earnings was due to the favorable impact of currency and margin growth in both Pepperidge Farm and Arnott´s.

Info: «Campbell Reports Third-Quarter Results – Adjusted Net Earnings Per Share Increased 13 Percent» (complete press release on campbellsoupcompany.com).