Campbell Soup's U.S. soup sales declined and net income fell 8 percent in its fiscal first quarter as increased promotional spending didn't pan out.
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Campbell's Soup
The world's biggest soup maker also reiterated its 2011 guidance Tuesday.
Campbell earned $279 million, or 82 cents per share, in the quarter compared with $304 million, or 87 cents per share, a year ago.
The performance missed analysts' expectations by a penny. The estimates of analysts polled by Thomson Reuters usually remove one-time items.
Revenue for the period ended Oct. 31 dipped 1 percent to $2.17 billion from $2.2 billion, shy of Wall Street's $2.2 billion.
The revenue results are not a surprise, as the Camden, New Jersey, company previously cautioned that heavy promotional spending in the quarter didn't spur sales as expected. Campbell also chose not to match rivals' steep promotions in the quarter.
While sales of condensed cooking soups climbed 7 percent, President and CEO Douglas Conant said in a statement that ready-to-serve and condensed eating soups did not perform as well.
Conant said the company did boost its promotional spending for the ready-to-serve and condensed eating soups, but that it didn't help to produce the volume gains expected. And not matching competitors' promotional efforts also wound up hurting the soups.
Sales of ready-to-serve soups fell 13 percent, while condensed soups dipped 1 percent. Overall, U.S. soup sales declined 5 percent.
The U.S. beverage segment fared better, with sales up 10 percent. Conant said advertising efforts and V8 V-Fusion drinks gave a boost to the results.
The baking and snacking unit reported a 3 percent increase in sales, helped by Pepperidge Farm products, Deli Flats rolls, Baked Naturals crackers and the expansion of the Goldfish snack brand.
For fiscal 2011, Campbell still expects its earnings will increase 2 percent to 4 percent from 2010 adjusted earnings of $2.47 per share, which implies earnings of $2.52 to $2.57 per share.
Analysts predict earnings of $2.54 per share for the year.
The company still anticipates fiscal 2011 revenue will rise 1 percent to 3 percent.