Campbell Soup Co's
The world's largest soup maker, which named Denise Morrison as its new chief executive in June, has cut jobs and promotional spending on soups and quit the Russian market, even as some American shoppers shifted to rival brands.
In the latest quarter, Campbell reported lower revenue, missing analysts' expectations as U.S. soup volumes continued to fall, and even international sales of its meals and beverages decreased.
The company's shares were down 5 percent at $31.78 on Tuesday afternoon on the New York Stock Exchange.
The company's U.S. soup business continues to be challenged, especially in the condensed and ready to serve categories, Morningstar analyst Erin Lash said.
Soup sales have fallen at Campbell for several quarters. The company had tried to entice shoppers by increasing price-cutting promotions, but pulled back as its profits took a hit and sales did not grow as expected.
On an analyst call, CEO Morrison, who increased spending on advertising and introducing new products, said the company's efforts to stabilize its U.S. soup business were on track, but admitted there was work to be done.
In the latest quarter, U.S. soups revenue fell 4 percent, hurt by promotional spending by rivals, while sales in its international beverage and meals business decreased 3 percent.
However, Campbell reported a higher-than-expected profit, helped by lower advertising and promotion expenses and stood by its fiscal-year forecast.
Campbell, which also makes V-8 juice drinks and Pepperidge Farm Goldfish crackers, began advertising later than usual to be more closely aligned with the start of the soup season.
Campbell expects fiscal 2012 expenses on advertising and consumer programs to rise and will increase its spending in the coming quarters.
For the quarter ended October 30, net earnings attributable to Campbell Soup were $265 million, down from $279 million a year earlier. Per share earnings were unchanged at 82 cents due to a decline in outstanding shares.
Sales fell 1 percent to $2.16 billion.
Analysts on average were expecting a profit of 79 cents a share on sales of $2.21 billion, according to Thomson Reuters I/B/E/S.
Marketing and selling expenses fell 6 percent to $261 million.
Campbell expects fiscal 2012 adjusted earnings per share to fall 5 to 7 percent, with sales flat to up 2 percent.
(Reporting by Mihir Dalal in New York; editing by Derek Caney, John Wallace, Dave Zimmerman, Robert MacMillan and Andre Grenon)