Adjusted Net Earnings Per Share Increased 12 Percent to $0.48
CAMDEN, N.J.–(BUSINESS WIRE)–May. 21, 2009–
Campbell Soup Company (NYSE:CPB) today reported net earnings for
the quarter ended May 3, 2009 of $174 million, or $0.49 per share,
compared to $532 million, or $1.40 per share, in the prior year.
Excluding items impacting comparability, adjusted net earnings were $171
million in the current quarter compared to adjusted net earnings of $165
million in the prior year’s quarter. Adjusted net earnings per share
were $0.48 in the current quarter compared to adjusted net earnings per
share of $0.43 in the prior year’s quarter, an increase of 12 percent.
Reflecting a stronger U.S. dollar, adjusted net earnings per share for
the quarter were negatively impacted by $0.04 due to currency
Douglas R. Conant, Campbell’s President and Chief Executive Officer,
said, “We delivered strong earnings growth this quarter. Reflecting our
previous pricing actions and ongoing productivity improvements, gross
margin performance improved versus the prior year, as expected.
Following increased spending in the first half to launch new products,
we reduced marketing expenses, as planned, particularly in U.S. Soup.
“Despite softer sales in the quarter, year to date we’ve delivered one of
the strongest U.S. Soup sales performances in years, with sales up 6
percent. Consumers continued to view soup as a simple, nourishing and
affordable meal. In particular, condensed cooking soups provided strong
growth, as our value marketing message resonated with consumers. We also
are pleased with the introduction and ongoing performance of ‘Campbell’s
Select Harvest’ and ‘Campbell’s’ ‘V8’ ready-to-serve soups and ‘Swanson’
Conant continued, “Beyond U.S. Soup, our Sauces business turned in a
stellar quarter with double-digit sales growth and very strong earnings
growth. Pepperidge Farm also delivered double-digit sales gains in
‘Goldfish’ snack crackers and ‘Milano’ cookies. On the other hand, our
beverage and North America Foodservice businesses have been negatively
impacted by the poor economy.
“Internationally, we delivered solid performance in Asia Pacific, behind
double-digit sales gains in the Australian soup business. However, our
European business declined in the face of a very challenging operating
environment. In emerging markets, we continued to build our capabilities
in Russia and China.”
Conant concluded, “We are successfully managing our way through the
challenging economic conditions, we are gaining momentum in our key
areas of focus and we are on track to deliver solid full-year results.”
Fiscal 2009 Guidance
On a currency neutral basis, the company expects to deliver sales
growth, excluding the negative impact of one less week in the fiscal
year and divestitures, within its long-term target range of between 3
and 4 percent; adjusted earnings before interest and taxes (EBIT) growth
slightly below its long-term growth target of between 5 and 6 percent,
reflecting the impact of one less week, higher marketing spending and
increased investment spending in Russia and China. On a currency
neutral basis, Campbell now expects growth in adjusted net earnings per
share (EPS) to exceed the 5 to 7 percent range from the fiscal 2008
adjusted base of $2.09.
The company expects its fiscal 2009 sales, EBIT and EPS growth rates
will be negatively impacted by approximately 5 percentage points as a
result of currency translation.
Third Quarter Financial Results
The items impacting comparability of third-quarter net earnings are
(millions, except per share amounts)
A detailed reconciliation of the adjusted fiscal 2009 and 2008 financial
information to the reported information is attached to this release.
For the third quarter, sales declined 10 percent to $1.686 billion. The
decline in sales reflects the following factors:
Additional Third Quarter Financial Details
Year-to-Date Financial Results
The current and prior period’s net earnings included items that impacted
comparability. These items are summarized below:
Net earnings for the first nine months were $667 million, or $1.85 per
share, compared to $1.076 billion, or $2.79 per share, in the year-ago
period. Excluding items impacting comparability, adjusted net earnings
were $686 million compared to $701 million in the year-ago period.
Adjusted net earnings per share were $1.90 in the current period
compared to $1.82 in the prior period, an increase of 4 percent.
Adjusted net earnings per share growth benefited from a decline in
average diluted shares outstanding. In the first nine months of 2009,
adjusted net earnings per share were negatively impacted by $0.08 due to
For the first nine months of fiscal 2009, sales were $6.058 billion, a
decrease of 4 percent. The change in sales for the period reflects
the following factors:
Additional Year-to-Date Financial Details
Summary of Fiscal 2009 Third Quarter and Year-To-Date Results by
U.S. Soup, Sauces and Beverages
Sales for U.S. Soup, Sauces and Beverages were $808 million compared to
$811 million a year ago. The change in sales reflects the following
Total soup sales for the quarter decreased 2 percent, driven by the
Further details of the sales results of this segment’s other businesses
Operating earnings were $195 million compared to $172 million in the
prior-year period, an increase of 13 percent. The increase in operating
earnings was due to lower advertising and lower administrative expenses.
For the first nine months, U.S. Soup, Sauces and Beverages sales
increased 4 percent to $3.134 billion. A breakdown of the change in
For the first nine months, soup sales increased 6 percent:
Operating earnings were $779 million compared to $767 million in the
year-ago period. The increase in operating earnings reflected the higher
level of sales, partly offset by a decline in gross margin percentage,
as pricing and productivity improvements were not sufficient to offset
Baking and Snacking
Sales for Baking and Snacking were $431 million, a decrease of 14
percent from a year ago. A breakdown of the change in sales follows:
Further details of sales results include the following:
Operating earnings were $57 million compared with a loss of $92 million
in the prior-year period. In connection with the previously announced
restructuring initiative, the current quarter included $1 million in
costs compared to $144 million in the prior year’s quarter. The
remaining increase in operating earnings was due to gains in
Pepperidge Farm and Arnott’s, partially offset by the unfavorable impact
For the first nine months, sales decreased 10 percent to $1.380 billion.
A breakdown in the change in sales follows:
Operating earnings were $193 million compared to $48 million in the
year-ago period. In connection with the previously announced
restructuring initiative, the current year included $3 million in
accelerated depreciation and other exit costs, compared to a $144
million restructuring charge in the prior year. The remaining increase
was primarily due to significant growth in Arnott’s, partially offset by
the negative impact of currency.
International Soup, Sauces and Beverages
Sales for International Soup, Sauces and Beverages were $297 million, a
decrease of 26 percent compared to a year ago. The change in sales
reflects the following factors:
Excluding the unfavorable impact of currency and divestitures, further
details of sales results include the following:
Operating earnings were $29 million compared to $40 million a year ago.
The prior-year quarter included $6 million in restructuring charges. The
decrease was due to the unfavorable impact of currency and lower
earnings in Europe, partly offset by gains in the Asia Pacific region
For the first nine months, sales decreased 14 percent to $1.068 billion.
A breakdown of the change in sales follows:
Excluding the impact of currency and divestitures, sales were comparable
to a year ago, as gains in the Asia Pacific region and Canada were
offset by declines in Europe.
Operating earnings were $117 million compared to $152 million in the
year-ago period. The prior year included $6 million in restructuring
charges. The decline was due to the unfavorable impact of currency and
costs to launch products in Russia and China.
North America Foodservice
Sales were $150 million, a decrease of 10 percent compared to a year
ago. A breakdown of the change in sales follows:
Operating earnings were $13 million compared to a loss of $4 million in
the prior period. In connection with the previously announced
restructuring initiative, the current quarter included $5 million in
accelerated depreciation and other exit costs, compared to a $22 million
restructuring charge in the prior-year quarter. Excluding these charges,
operating earnings were flat versus the prior-year quarter.
For the first nine months, sales were $476 million compared to $509
million in the year-ago period. A breakdown of the change in sales
Operating earnings were $34 million compared to $40 million in the prior
period. In connection with the previously announced restructuring
initiative, the current year included $18 million in accelerated
depreciation and other exit costs, compared to a $22 million
restructuring charge in the prior year. The decline in operating
earnings was primarily due to lower volumes.
Unallocated Corporate Expenses
Unallocated corporate expenses decreased from $34 million a year ago to
$8 million in the current quarter. The decrease was primarily due to a
favorable net adjustment of $11 million related to commodity
hedges, lower long-term compensation costs and lower expenses associated
with the company’s North American SAP implementation. For the first nine
months, unallocated corporate expenses decreased from $97 million to $83
million. The decrease was primarily due to lower expenses associated
with the company’s North American SAP implementation and lower long-term
compensation costs, partially offset by a net $14 million unrealized
loss on commodity hedges.
Non-GAAP Financial Information
A reconciliation of the adjusted fiscal 2009 and 2008 financial
information to the reported financial information is attached to this
Campbell will host a conference call to discuss these results on May 22,
2009 at 10:00 a.m. Eastern Standard Time. U.S. participants may access
the call at 1-866-219-5631 and non-U.S. participants at 1-703-639-1122.
Participants should call at least five minutes prior to the starting
time. The passcode is “Campbell Soup” and the conference leader is Len
Griehs. The call and accompanying slides also will 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 May 29, 2009 at
1-888-266-2081 or 1-703-925-2533. The access code is 1359864.
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, and
“Arnott’s” salty snacks in Australia.
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 its future plans and performance,
including statements concerning the impact of marketing investments and
strategies, pricing, share repurchase, new product introductions and
innovation, cost-saving initiatives, quality improvements, inflation,
commodity hedging, currency translation and portfolio strategies,
including divestitures, 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 this release.
THREE MONTHS ENDED
Weighted average shares outstanding – assuming dilution
NINE MONTHS ENDED
Reconciliation of GAAP and Non-GAAP Financial MeasuresThird
Quarter Ended May 3, 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.
The company believes that net debt is a non-GAAP measure that provides
additional meaningful comparisons between the company’s financial
position at May 3, 2009 and April 27, 2008, and also a useful
perspective on the financial condition of the business. Interest income
earned on cash and cash equivalents partially offsets interest expense
on debt. Cash and cash equivalents are available to repay outstanding
debt upon maturity.
The table below summarizes information on total debt and cash and cash
May 3, 2009
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:
The tables below reconcile financial information, presented in
accordance with GAAP, to financial information excluding certain
Add: Restructuring related costs (2)
* The sum of the individual per share amounts does not equal due
Adjusted Diluted net earnings per share*
Source: Campbell Soup Company
Campbell Soup CompanyLeonard F. Griehs (Analysts), 856-342-6428Anthony
Sanzio (Media), 856-968-4390
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