Campbell reports fourth-quarter, full-year results
Campbell Soup Co., Camden, N.J., reported its fourth-quarter and full-year results for fiscal year 2012.
Net earnings for the quarter ending July 29 were $127 million, or $0.40 a share, compared with $100 million, or $0.31 a share, in the previous year. The current quarter’s reported net earnings included transaction costs associated with the Aug. 6 acquisition of Bolthouse Farms, Bakersfield, Calif. By comparison, fourth quarter of 2011 reported net earnings included charges associated with the previously announced June 2011 restructuring program. Excluding items impacting comparability in both periods, adjusted net earnings decreased 8 percent to $130 million compared with $141 million in the prior year’s quarter, and adjusted net earnings per share decreased 5 percent to $0.41 compared with $0.43 in the fourth quarter of 2011.
“In fiscal 2012, we advanced our strategies to stabilize and profitably grow North America soup and simple meals, to expand our international presence and to drive growth in healthy beverages and baked snacks,” said Denise Morrison, Campbell’s president and chief executive officer, in a statement. “In the first year of our strategic transition, we’ve renewed our focus on consumer insights, reinvigorated our brand building efforts and significantly improved our innovation pipeline. With the acquisition of Bolthouse Farms, we positioned Campbell for growth in the rapidly expanding packaged fresh market. While we’ve had some important accomplishments this year, we also recognize that driving change at Campbell will require a sharper focus on execution. Our strategic framework is a roadmap to drive disciplined and successful change at Campbell. We will continue to enhance and grow our core business while we broaden our appeal with new consumer groups, new product platforms and new geographies.
“As we begin the new fiscal year, we are confident that we will improve our sales and earnings trends. Today, we’ve provided specific growth ranges for fiscal 2013 sales, adjusted [earnings before interest and taxes] and adjusted [earnings per share],” she concluded.
Sales for U.S. beverages were $181 million for the fourth quarter, an increase of 3 percent compared to the year-ago period, due to gains from volume and mix, the company said.
Sales gains continued to outpace category growth and were primarily driven by double-digit increases in V8 Splash beverages and gains in V8 V-Fusion beverages, partially offset by declines in V8 vegetable juice. Sales of V8 V-Fusionbeveragesbenefited from the launch of new items, including smoothies and energy, sparkling and kids drinks, it adds.
Operating earnings for the quarter were $25 million compared with $30 million in the year-ago period. The decrease in earnings was primarily due to an increase in marketing expenses and a decline in gross margin percentage, partly offset by higher sales volume.
For the full year, sales increased 2 percent to $774 million. A breakdown of the change in sales shows that volume and mix added 3 percent, and increased promotional spending subtracted 1 percent.
Operating earnings declined to $134 million from $182 million in the year-ago period, primarily due to cost inflation particularly of juice concentrates and packaging materials, increased promotional spending and higher advertising expenses, partly offset by productivity improvements, according to the company.
Sales for international simple meals and beverages were $294 million for the fourth quarter, a decrease of 7 percent. Organic sales increased 1 percent. The change in sales reflected the following factors: volume and mix added 2 percent; price and sales allowances added 3 percent; increased promotional spending subtracted 4 percent; and currency subtracted 8 percent.
Excluding the impact of currency, higher sales of primarily beverage products in Latin America were partially offset by declines in Canada, while sales in Europe and in the Asia-Pacific region were comparable to the year-ago period, the company says.
In Canada, sales decreased primarily due to the negative impact of currency and lower beverage sales. In Europe, excluding the negative impact of currency, sales growth in France was offset by lower sales in Germany. In the Asia-Pacific region, excluding the negative impact of currency, sales growth in Japan and Malaysia was offset by declines in Australian soup.
Operating earnings were $15 million compared with $24 million in the year-ago period. The decrease in operating earnings was primarily due to cost inflation and increased promotional spending, partly offset by higher selling prices, according to the company.
For the full year, sales decreased 4 percent to $1.4 billion. Organic sales declined 2 percent. A breakdown of the change in sales follows: volume and mix subtracted 3 percent; price and sales allowances added 2 percent; increased promotional spending subtracted 1 percent; and currency subtracted 2 percent.
Excluding the impact of currency, sales declines in Canada, Europe and the Asia-Pacific region were partly offset by gains in Latin America, it adds.
Operating earnings fell to $153 million compared with $185 million in the year-ago period. The decrease in operating earnings was primarily due to lower earnings in the Asia-Pacific region and Canada, as well as increased costs associated with the company’s market expansion in China, according to the company.