US food group Campbell Soup Co. has recorded a drop in first-quarter earnings as costs related to its acquisition of Bolthouse Farms hit profits.
In the three months to 28 October, net earnings amounted to US$265m, an 8% drop on last year, the company reported today (20 November). Excluding acquisition-related charges, adjusted net earnings increased 5% to $279m.
EBIT dropped to $385m from $416m last year, while sales climbed 8% to $2.34bn. Campbell attributed the sales increase to the acquisition of Bolthouse, price and sales allowances and increased promotional spend.
Campbell reconfirmed its 2013 fiscal sales growth guidance of between 10-12%, adjusted EBIT of between 4-6% and adjusted EPS of 3-5%.
Campbell's share price was down 2% at $36.21 at 10:59 ET today.
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Campbell Reports First-Quarter Results
First-Quarter Adjusted Net Earnings per Share Increased 7 Percent to $0.88
First-Quarter Sales Rose 8 Percent to $2.336 Billion
Fiscal 2013 Guidance Confirmed
CAMDEN, N.J.--(BUSINESS WIRE)--Campbell Soup Company (NYSE:CPB) today reported its results for the first quarter of fiscal 2013.
"Overall, our fiscal year 2013 is off to a solid start. We remain focused on returning our company to sustainable, profitable net sales growth. We know we have more work to do to change Campbell's growth trajectory and achieve our long-term targets on our base business." First-Quarter Overview
Reported Sales Increased 8 Percent; Organic Sales Increased 1 Percent Adjusted Earnings Before Interest and Taxes (EBIT) Increased 5 Percent, 2 Percent Excluding the Acquisition of Bolthouse Farms U.S. Simple Meals Sales Grew 3 Percent, With Soup Sales Up 2 Percent; Earnings Increased 5 Percent U.S. Beverages Sales Declined 5 Percent; Earnings Comparable To a Year Ago Campbell Completed the Acquisition of Bolthouse Farms on Aug. 6, 2012 Campbell Recorded Charges Related To the Previously Announced Sept. 2012 Restructuring Program Net earnings for the quarter ended Oct. 28, 2012, were $245 million, or $0.78 per share, compared with $265 million, or $0.82 per share, in the prior year. The current quarter's reported net earnings included transaction costs associated with the acquisition of Bolthouse Farms, as well as charges associated with the Sept. 2012 restructuring program. Excluding these items impacting comparability, adjusted net earnings increased 5 percent to $279 million, and adjusted net earnings per share increased 7 percent to $0.88 in the current quarter. A detailed reconciliation of the reported financial information to the adjusted information is included at the end of this news release.
Denise Morrison, Campbell's President and Chief Executive Officer, said, "We are encouraged by our performance in the first quarter and feel good about the progress we've made in executing our three growth strategies.
"In our largest business, U.S. Simple Meals, we generated sales growth both in U.S. Soup and in U.S. Sauces, driven by innovation in our base business and by new product introductions. Our recently acquired Bolthouse Farms business performed very well in the quarter, and we remain excited about the growth platform it provides Campbell in the packaged fresh foods category. We delivered continued solid performance at Pepperidge Farm in the crackers business, while our bakery business declined in the quarter. Our Asia Pacific business delivered good results, driven by improved performance in Australia and strong sales growth in Malaysia and Indonesia. In U.S. Beverages, our core business in original ‘V8' vegetable juice and ‘V8 V-Fusion' beverages continued to be challenged by slackening consumer demand."
Morrison concluded, "Overall, our fiscal year 2013 is off to a solid start. We remain focused on returning our company to sustainable, profitable net sales growth. We know we have more work to do to change Campbell's growth trajectory and achieve our long-term targets on our base business."
Campbell Confirms Fiscal 2013 Guidance
The company confirmed its previous fiscal 2013 guidance. Campbell expects to grow sales between 10 and 12 percent, adjusted EBIT between 4 and 6 percent and adjusted EPS between 3 and 5 percent. The company expects adjusted EPS to be between $2.51 and $2.57. This guidance includes the estimated impact of the Bolthouse Farms business and excludes the impact of acquisition transaction costs and restructuring charges. In fiscal 2013, Campbell expects Bolthouse Farms to contribute approximately $750 million to sales and add $0.05 to $0.07 to adjusted EPS, including the impact of the suspension of Campbell's strategic share repurchase program.
