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Campbell Profit Falls on Lower US Soup Sales

Campbell Soup

posted lower quarterly profit Monday, hurt by higher costs and lower U.S. soup sales, but affirmed its full-year forecast.

The largest U.S. soup maker said net earnings were $270 million, or 70 cents a share, in the fiscal first quarter ended Oct. 28, compared with $291 million, or 72 cents a share, a year earlier.

U.S. soup sales were held down by an exceptionally warm autumn, the company said, while gross margins were hurt as price increases were not enough to offset higher ingredient costs.

Net sales rose 7 percent to $2.30 billion, helped by higher sales of V8 beverages and Pepperidge Farm cookies and crackers.

Soup sales fell 1 percent.

The first quarter is typically the start of "soup season" for Campbell, when retailers begin stocking up for the cooler fall and winter months.

Despite the slow start, the company said it expects the soup business to "deliver better performance as the year progresses."

Campbell stood by its earnings forecast for fiscal 2008, saying it still expects earnings per share from continuing operations to grow 5 percent to 7 percent from fiscal 2007's $1.95.

Campbell has been boosting sales with newer products like lower-sodium soup, while also expanding its soup business into China and Russia.

The company said in August it was exploring options for its Godiva Chocolatier business that could lead to a sale of the upscale brand.

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