CHICAGO - Campbell Soup Co's soup sales fell 8 percent in the United States during the key late fall and winter months, with the more expensive ready-to-serve line the hardest hit.
The world's largest soup maker also reported a second-quarter profit on Monday that met analysts estimates, helped by cost cuts and favorable currency exchange rates.
Campbell last week cut its 2010 sales forecast amid weakness in the U.S. ready-to-serve soup market.
On Monday, it said sales of such soups fell 18 percent. Campbell spent less to promote ready-to-serves and saw intense competition in the simple meals category, where soup faces off against items such as frozen dinners.
CEO Douglas Conant said the company has plans to improve the performance in the ready-to-serve segment in the second half of the fiscal year.
But sales of its lower-priced condensed soup, which are packaged in the well-known red and white can, were flat during the quarter as consumers may have cooked more with that soup as an ingredient in the lean economy, but bought less of it to eat as a meal, the company said.
Earnings for the second quarter that ended January 31, rose to $259 million, or 74 cents share, from $233 million, or 64 cents a share, a year earlier.
Analysts on average forecast 74 cents a share, according to Reuters Estimates.
Sales rose 1 percent to $2.15 billion.
Gross margin rose to 40.5 percent from 39.4 percent a year earlier, helped by improved productivity.
Last week, the company stood by its 2010 earnings forecast of a 9 percent to 11 percent increase, including one-time items.
Conant also said last week that the company was in a position to raise its long-term earnings targets in the next year or so.
Beverage sales also fell slightly due to lower sales of V8. Prego pasta sauce sales rose sharply, while Pace Mexican sauce sales fell, the company said.
Baking and snacking sales rose 11 percent to $489 million, aided by higher sales of Pepperidge Farm Goldfish crackers.
Campbell shares traded at $34 in premarket, up from Friday's New York Stock Exchange close of $33.93.
(Reporting by Brad Dorfman; Editing by Lisa Von Ahn and Maureen Bavdek)