Nov 22 Campbell Soup Co, the world's
largest soupmaker, reported a better-than-expected quarterly
profit as the company kept a lid on costs, sending its shares up
more than 5 percent on Tuesday.
The company, which also sells Pepperidge Farm snacks and
Prego pasta sauce, had initiated a restructuring and cost-saving
drive last year to prepare itself for changing consumer trends
that were affecting the food industry.
Demand for packaged food in the United States has taken a
hit as more customers shift to healthier options, pushing
companies to invest in organic and fresh food businesses.
As part of the strategy, Campbell has acquired brands such
as Bolthouse Farms and Garden Fresh Gourmet, which makes
refrigerated salsa and hummus.
However, the company's total sales in the latest quarter
were flat as its fresh foods business struggled with production
issues at its Bolthouse Farms refrigerated beverages and
sluggish demand for carrots.
Campbell's fresh food business is yet to fully recover from
a recall of certain protein drinks and a disappointing carrot
harvest earlier this year.
"Campbell Fresh continues to rebuild capacity for Bolthouse
Farms Protein PLUS drinks following a voluntary recall last
quarter, and remains focused on working to regain lost carrot
customers over time with improved quality," Chief Executive
Denise Morrison said.
Sales from Campbell Fresh unit, which accounted for 10.6
percent of total revenue in the first quarter, fell 6 percent to
The company said its gross margin in the first quarter rose
to 38.2 percent from 34.3 percent a year earlier. Total expenses
fell 7.6 percent to $1.75 billion.
Campbell's net income jumped to $292 million, or 94 cents
per share, in the latest quarter ended Oct. 30 from $194
million, or 62 cents per share, a year earlier.
Excluding certain items, Campbell Soup earned $1.00 per
share, beating analysts' average estimate of 95 cents per share,
according to Thomson Reuters I/B/E/S.
The company reported net sales of $2.20 billion, in line
with analysts' expectations.
The company's shares were up 3.8 percent at $57.13 in
afternoon trading on the New York Stock Exchange.
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Sai
Sachin Ravikumar and Anil D'Silva)