“Solid growth” at Arnott’s helps Campbell beat expectations
Campbell Soup Company, the world’s largest soup producer and owner of Arnott’s biscuits, has raised its profit forecast for the current year despite reporting an even bigger sales decline of 10% in the third quarter, up from a decline of 4% in the second quarter.
The company released their results earlier than expected to counter negative speculation about their earnings. Campbell spokesman Anthony Sanzio said that the company, which outshone analyst expectations, “wanted to get the information out sooner rather than later.”
The decline in sales was driven by a fall in volume and the negative impact of currency fluctuations. These factors were partially counterbalanced by higher prices.
Campbell delivered one of their strongest U.S. Soup sales performances in years, with sales climbing six per cent.
Douglas Conant, Campbell’s President and CEO, said the company had benefitted from the ‘at-home’ trend, which has seen more families choosing to bypass restaurants for the supermarket aisles.
“Consumers continued to view soup as a simple, nourishing and affordable meal,” he noted. “In particular, condensed cooking soups provided strong growth, as our value marketing message resonated with consumers.”
Arnott’s, Australia’s largest biscuit manufacturer, reported a drop in sales – although this was due largely to the unfavourable impact of currency fluctuations and the divestiture of some salty snack foods brands. Adjusted sales saw “solid growth” for the division with their savoury and sweet biscuit segments leading the way.
The company advised that in the first three quarters of the current financial year much of the growth in the profit of their baking and snacking operations could be attributed to “significant growth in Arnott’s”.
In International Soup, Sauces and Beverages division, Campbell’s Asia Pacific sales increased primarily due to gains in Australia and Malaysia. Their Australian soup operations reaped double-digit sales gains in the third quarter.
Campbell remains confident about coming quarter given improvement in recent months. “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,” Mr Conant concluded.