Campbell Soup Co. reports third-quarter results
U.S. beverage sales decline 4 percent
Campbell Soup Co., Camden, N.J., reported a 1 percent increase in organic sales to $184 million in the third quarter of fiscal-year 2014. However, its U.S. beverage sales declined 4 percent during the period, the company says.
“While we delivered growth in third-quarter earnings, our organic sales growth of 1 percent reflected mixed performance and fell short of our expectations,” said Denise Morrison, Campbell’s president and chief executive officer, in a statement.
However, Morrison noted that she remains encouraged by the growing platform that Bolthouse Farms adds to the company’s portfolio. Both the company’s U.S. Beverages and Australia groups are planning to deliver better results in the future, she added.
Sales for the company’s U.S. Beverages group were $190 million in the third quarter. The decrease was driven by unfavorable volume and mix, with V8 V-Fusion and V8 Splash beverages leading the decline. However, gains in V8 vegetable juice offset this performance, the company says.
Operating earnings for the U.S. Beverages group in the quarter were $29 million, compared with $33 million in the prior year, which represents a 12 percent decrease. The contraction was primarily driven by cost inflation, increased supply chain costs, and higher marketing expenses, which were partially offset by lower administrative expenses and productivity improvements, the company says.
For the first nine months of the fiscal year, U.S. Beverages sales decreased 5 percent to $539 million. Like its third-quarter results, this decrease was driven by unfavorable volume and mix, it adds. Campbell’s total earnings in the first nine months of the fiscal year numbered $600 million, which is up from $572 million in the prior-year period.
“Given our performance year-to-date, we are lowering our guidance for full-year sales growth to approximately 3 percent,” Morrison said in a statement. “ … While we are not satisfied with our sales performance, we remain confident that we are pursuing the right strategy to reshape Campbell and deliver sustainable, profitable net sales growth as we continue to strengthen our core business and expand into faster-growing spaces.”