Campbell: baking unit sales up 11 percent in FY 2008

Camden / NJ. (csc) «Looking at the rest of our portfolio, Pepperidge Farm Inc. once again delivered outstanding performance, and Arnott´s Biscuits Limited also had a strong year in its core biscuit business», said Douglas R. Conant, President and CEO of Campbell Soup Company – commenting the fourth quarter and fiscal 2008 results.

For the Q4/2008 ended August 03 Campbell reported net earnings of 89 million USD or 0,24 USD per share, compared to 61 million USD or 0,16 USD per share in the year-ago period. The current quarter´s reported net earnings included charges associated with restructuring initiatives. Excluding all items impacting comparability in both periods, adjusted net earnings were 96 million USD compared to 53 million in the prior year´s quarter and adjusted net earnings per share were 0,26 USD in the current quarter compared to 0,14 USD in the year-ago quarter, an increase of 86 percent.

For fiscal 2008, net sales were 7,998 billion USD, an increase of eight percent. Net earnings for fiscal 2008 were 1,165 billion USD, or 3,06 USD per share, compared to 854 million USD, or 2,16 USD per share, in the year-ago period. Excluding items impacting comparability, adjusted net earnings were 797 million compared to 771 million in the year-ago period. Adjusted net earnings per share were 2,09 USD in the current period compared to 1,95 USD in the prior period, an increase of seven percent. For fiscal 2008, earnings from continuing operations were 671 million USD versus 792 million USD a year earlier. Earnings per share from continuing operations were 1,76 USD compared to 2,00 USD a year ago.

Campbell Soup Company earnings results are reported for the segments «U.S. Soup, Sauces and Beverages», «International Soup, Sauces and Beverages», «North America Foodservice» and «Baking and Snacking». The Baking and Snacking division includes «Pepperidge Farm» cookies, crackers, breads and frozen products in U.S. retail, «Arnott´s» biscuits in Australia and Asia Pacific, and «Arnott´s» salty snacks in Australia.

Baking and Snacking division

Sales for Baking and Snacking in the fourth quarter 2008 were 533 million USD, an increase of 13 percent from a year ago. A breakdown of the change in sales follows:
 Volume and mix added one percent
 Price and sales allowances added eight percent
 Increased promotional spending subtracted three percent
 Currency added five percent
 Divestitures subtracted six percent
 The 53rd week added eight percent

Further details of sales results include the following:

• Pepperidge Farm achieved double-digit sales growth, primarily driven by gains in the cookies and crackers and bakery businesses and the positive impact of the 53rd week. Excluding the impact of the 53rd week:
  • In the cookies and crackers business, sales growth was driven by continued consumer demand for «Goldfish» snack crackers, the launch of Baked Naturals, a line of adult savory snack crackers, and growth in cookies.
  • The bakery business delivered double-digit sales gains behind continued consumer demand for whole-grain breads and growth in sandwich rolls.
  • Arnott´s sales increased primarily due to the favorable impact of currency and biscuit growth, offset by the divestiture of certain Australian salty snack foods brands.

Operating earnings increased to 72 million USD compared with 49 million USD a year ago. The increase in operating earnings was due to higher earnings in Arnott´s, the benefit of the 53rd week and the favorable impact of currency.

For fiscal 2008, sales increased eleven percent to 2,058 billion USD. A breakdown of the change in sales follows:
 Volume and mix added two percent
 Price and sales allowances added six percent
 Increased promotional spending subtracted one percent
 Currency added five percent
 Divestitures subtracted three percent
 The 53rd week added two percent

Further details of sales results include the following:

• Pepperidge Farm sales increased across all businesses: cookies and crackers, bakery and frozen.
• The cookies and crackers business posted strong gains due to the continued growth of «Goldfish» snack crackers, the launch of Baked Naturals crackers, and growth in distinctive cookies.
• Increased bakery sales were driven by gains in whole-grain varieties and sandwich rolls.
• Arnott´s sales increased due to the favorable impact of currency, biscuit growth and the benefit of the 53rd week, partially offset by the divestiture of certain Australian salty snack foods brands and the company´s biscuit business in Papua New Guinea.

Operating earnings were 120 million USD compared to 238 million USD in the year-ago period. The current period included 144 million USD of restructuring charges. Operating earnings in the prior period included a 23 million USD gain from the sale of the Pepperidge Farm facility. Excluding the gain from the sale and restructuring charges, the increase in operating earnings was primarily due to earnings growth in Arnott´s biscuits, the favorable impact of currency and gains in Pepperidge Farm (source).