Raises Full-Year Guidance: Expects Adjusted Net Earnings Per Share
Growth of 9 to 11 Percent
CAMDEN, N.J.–(BUSINESS WIRE)–Nov. 23, 2009–
Campbell Soup Company (NYSE:CPB) today reported its fiscal 2010
Net earnings for the quarter ended Nov. 1, 2009 were $304 million, or
$0.87 per share, compared to $260 million, or $0.70 per share, in the
prior year. Excluding items impacting comparability from the prior year,
net earnings per share increased 14 percent in the current quarter from
adjusted net earnings per share of $0.76 in the prior period. The items
impacting comparability and a detailed reconciliation of the adjusted
fiscal 2009 financial information to the reported information are
included at the end of this news release.
In the first quarter of fiscal 2010, Campbell adopted and
retrospectively applied new accounting guidance related to the
calculation of earnings per share. The retrospective application of
these provisions resulted in a reduction of previously reported diluted
net earnings per share of $0.01 for both the first quarter and full year
of fiscal 2009.
Douglas R. Conant, Campbell’s President and Chief Executive Officer,
said, “We feel good about our performance in the first quarter as we
delivered solid earnings growth across all of our key businesses. We’re
especially pleased with the significant improvement in our gross margin,
driven by increased productivity in our supply chain. Our U.S. Soup
business faced difficult top-line comparisons with last year’s first
quarter when sales increased 12 percent. In this year’s first quarter,
we built momentum in the latter part of the quarter when, as planned, we
significantly stepped up our marketing and merchandising programs.
Looking ahead, we’re optimistic about our U.S. Soup business, led
by the renovated ‘Campbell’s Chunky’ line, innovations in our
condensed portfolio and our ‘Swanson’ broth business.”
Conant concluded, “While it is early in the fiscal year, we’re raising
our guidance based on our results in the quarter and our outlook for the
remainder of the year, including currency.”
Campbell Raises Fiscal 2010 Guidance
Campbell now expects fiscal 2010 sales growth of 4 to 5 percent and
adjusted earnings before interest and taxes (EBIT) growth of 6 to 7
percent, up from its original guidance of 3 to 4 percent for sales and 5
to 6 percent for EBIT. The company now expects to deliver adjusted EPS
growth of 9 to 11 percent from the fiscal 2009 adjusted base of $2.21,
up from its original estimate of 5 to 7 percent. This guidance includes
the impact of currency translation, which at quarter-end rates of
exchange would be favorable by 3 to 4 percentage points.
For the first quarter, sales decreased 2 percent to $2.203 billion. The
change in sales for the quarter reflected the following factors:
First-Quarter Financial Details
Summary of Fiscal 2010 First-Quarter Results by Segment
U.S. Soup, Sauces and Beverages
Sales for U.S. Soup, Sauces and Beverages were $1.140 billion in the
first quarter, a decrease of 5 percent compared with a year ago. The
change in sales reflected the following factors:
U.S. soup sales for the quarter decreased 3 percent, compared with a 12
percent increase a year ago that was driven by the launches of
“Campbell’s Select Harvest” soups, “Campbell’s V8” premium soups and
“Swanson” stock, and increased marketing support across the portfolio.
The decline in the first quarter of 2010 was driven by the following:
Further details of the sales results of this segment’s other businesses
Operating earnings were $331 million compared with $314 million in the
prior-year period. The increase in operating earnings was due to an
improvement in gross margin percentage and lower marketing expenses,
partially offset by lower sales.
Baking and Snacking
Sales for Baking and Snacking were $530 million in the first quarter, an
increase of 4 percent from a year ago. A breakdown of the change in
Further details of sales results included the following:
Operating earnings were $100 million compared with $83 million in the
prior-year period. The increase in operating earnings was fueled
by margin-driven growth in both Arnott’s and Pepperidge Farm and the
favorable impact of currency.
International Soup, Sauces and Beverages
Sales for International Soup, Sauces and Beverages were $374 million for
the first quarter, a decrease of 2 percent compared with a year ago. The
change in sales reflected the following factors:
Operating earnings were $44 million compared with $38 million in the
year-ago period. The increase in operating earnings was driven by growth
in Canada and the Asia Pacific region and the favorable impact of
North America Foodservice
Sales were $159 million for the first quarter, a decrease of 2 percent
compared with a year ago. A breakdown of the change in sales follows:
Sales declined primarily due to continued weakness in the food service
Operating earnings were $26 million compared with $11 million in the
prior period. The prior year included $7 million in costs related
to a restructuring program. The remaining increase in operating earnings
was primarily due to an improved gross margin percentage, reflecting
productivity improvements, including benefits of closing the company’s
Listowel, Ontario, Canada plant, and lower administrative costs.
Unallocated Corporate Expenses
Unallocated corporate expenses decreased from $47 million a year ago to
$23 million in the current quarter. The decrease was due to $26 million
of unrealized losses on commodity hedging included in the prior year.
Non-GAAP Financial Information
A reconciliation of the adjusted fiscal 2009 financial information to
the reported financial information is attached to this news release.
The company will host a conference call to discuss these results on
November 23, 2009 at 10:00 a.m. Eastern Time. U.S. participants may
access the call at 1-866-814-8470 and non-U.S. participants at
1-703-639-1369. Participants should call at least five minutes prior to
the starting time. The passcode is “Campbell Soup” and the conference
leader is Jennifer Driscoll. The call will also be broadcast live over
the Internet at www.campbellsoupcompany.com
and can be accessed by clicking on the “Shareholder Event / Webcast”
banner. A recording of the call will be available approximately two
hours after it is completed through midnight December 7, 2009, by
dialing 1-888-266-2081 or 1-703-925-2533. The access code is 1412165.
Campbell Soup Company earnings results are reported for the following
U.S. Soup, Sauces and Beverages includes the following retail
businesses: “Campbell’s” brand condensed and ready-to-serve soups,
“Swanson” broth and canned poultry businesses, “Prego” pasta sauce,
“Pace” Mexican sauce, “Campbell’s Chunky” chili, “Campbell’s” canned
pasta, gravies and beans, “V8” vegetable juices, “V8 V-Fusion” juices,
“V8 Splash” juice beverages, “Campbell’s” tomato juice, and “Wolfgang
Puck” soups, stocks and broths.
Baking and Snacking includes the following businesses:
“Pepperidge Farm” cookies, crackers, breads and frozen products in U.S.
retail, “Arnott’s” biscuits in Australia and Asia Pacific.
International Soup, Sauces and Beverages includes the soup, sauce
and beverage businesses outside of the United States, including Europe,
Mexico, Latin America, the Asia Pacific region, as well as the
emerging markets of Russia and China, and the retail business in
North America Foodservice includes the Away From Home
business in the U.S. and Canada.
About Campbell Soup Company
Campbell Soup Company is a global manufacturer and marketer of
high-quality foods and simple meals, including soup, baked snacks, and
healthy beverages. Founded in 1869, the company has a portfolio of
market-leading brands, including “Campbell’s,” “Pepperidge Farm,”
“Arnott’s,” and “V8.” For more information on the company, visit
Campbell’s website at www.campbellsoup.com.
This release contains “forward-looking statements” that reflect the
company’s current expectations about the impact of its future plans and
performance on sales, earnings, and margins. These forward-looking
statements rely on a number of assumptions and estimates that could be
inaccurate and which are subject to risks and uncertainties. The factors
that could cause the company’s actual results to vary materially from
those anticipated or expressed in any forward-looking statement include
(1) the impact of strong competitive responses to the company’s efforts
to leverage its brand power in the market; (2) the risks associated with
trade and consumer acceptance of the company’s initiatives; (3) the
company’s ability to realize projected cost savings and benefits; (4)
the company’s ability to manage changes to its business processes; (5)
the increased significance of certain of the company’s key trade
customers; (6) the impact of fluctuations in the supply or costs of
energy and raw and packaging materials; (7) the risks associated with
portfolio changes; (8) the uncertainties of litigation; (9) the impact
of changes in currency exchange rates, tax rates, interest rates, debt
and equity markets, inflation rates, economic conditions and other
external factors; (10) the impact of unforeseen business disruptions in
one or more of the company’s markets due to political instability, civil
disobedience, armed hostilities, natural disasters or other calamities;
and (11) other factors described in the company’s most recent Form 10-K
and subsequent Securities and Exchange Commission filings. The company
disclaims any obligation or intent to update the forward-looking
statements in order to reflect events or circumstances after the date of
THREE MONTHS ENDED
In fiscal 2009, the company recorded pre-tax restructuring related
costs in cost of products sold of $7 ($5 after tax or $.01 per
share) related to the initiatives announced in April 2008 to
improve operational efficiency. The restructuring related costs
were recognized in the North America Foodservice segment.
Certain reclassifications were made to the prior year amounts to
conform with the current year presentation.
Reconciliation of GAAP and Non-GAAP Financial Measures
First Quarter Ended November 1, 2009
Campbell Soup Company uses certain non-GAAP financial measures as
defined by the Securities and Exchange Commission in certain
communications. These non-GAAP financial measures are measures of
performance not defined by accounting principles generally accepted in
the United States and should be considered in addition to, not in lieu
of, GAAP reported measures.
Items Impacting Gross Margin and Net
The company believes that financial information excluding certain
transactions not considered to be part of the ongoing business improves
the comparability of year-to-year results. Consequently, the company
believes that investors may be able to better understand its gross
margin and earnings results if these transactions are excluded.
The following items impacted gross margin and/or net earnings:
There were no items in fiscal 2010 that impacted comparability.
The tables below reconcile financial information, presented in
accordance with GAAP, to financial information excluding certain
Aug. 2, 2009
Source: Campbell Soup Company
Campbell Soup CompanyJennifer Driscoll (Analysts)856-342-6081orAnthony
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