Campbell Soup Co.’s fiscal fourth-quarter profit slipped 12%, weighed down by restructuring charges.
But the food maker’s adjusted results reported Friday surpassed Wall Street’s expectations, and its fiscal 2012 earnings guidance is expected to meet or beat analysts’ estimates.
The maker of Pepperidge Farm cookies, Goldfish snacks and its iconic soup reported net income of $100 million for the period ended July 31. That’s down from $113 million a year earlier.
Revenue climbed 6% to $1.61 billion from $1.52 billion, helped partly by higher prices, lower promotional spending and strength in the baking and snacking segment. Wall Street expected revenue of $1.58 billion.
The Camden, N.J. company said Friday that soup profits improved on reduced promotional spending, while higher costs and increased promotional spending lowered U.S. beverage profits.
Sales of for the U.S. Simple Meals division dropped 8% in the quarter, as soup sales fell%. Campbell said soup volumes were hurt by reduced promotional spending and increased prices. Sales of Prego pasta sauce fell due to competition, while sales of Pace Mexican sauce declined mostly because of people buying store brands.
The U.S. beverage unit’s sales dipped 1%, with sales of V8 vegetable juice down because of competition. Sales of V8 V-Fusion were helped by the debut of V-Fusion + Tea, some new flavours and 8 oz. slim cans.
Sales for the global baking and snacking segment increased 17%, helped by higher sales of Pepperidge Farm products, cookies, crackers and frozen products. Arnott’s sales rose, driven by sales of Shapes crackers and Tim Tam chocolate biscuits.
North American foodservice sales climbed 10%.
The international simple meals and beverages unit reported a 12% rise in sales, with sales up in Europe, Canada and the Asia Pacific region.
For the year, net income fell 5% to $805 million, compared with $844 million the year before.
Annual revenue edged up 1% to $7.72 billion from $7.68 billion.
Campbell’s President and CEO Denise Morrison, who took the helm on Aug. 1, said in a statement that the company is moving in a new strategic direction. Over the summer Campbell said it would cut 770 jobs worldwide and close its operations in Russia and a plant in Marshall, Mich. as it tries to lower overhead costs. The company is also looking to roll out more products within its simple meals, baked snacks and healthy beverage segments and expand abroad in key markets.
“Fiscal 2012 will be a year of transition, as we build the foundation for a new Campbell with a renewed focus on meeting consumers’ needs,” said Morrison.
Campbell still expects fiscal 2012 revenue to be flat to up 2%, which would imply revenue of $7.72 billion to approximately $7.87 billion.
