The Campbell Soup Company has posted a sales fall of 4% to US$1.9 billion, primarily due to negative currency impact, while on an organic basis, sales decreased 1% on lower volume, partly offset by lower promotional spending and higher selling prices.
Satisfactory results were seen in the Arnott’s business in Australia and Indonesia.
Denise Morrison, Campbell’s President and CEO, said: “In the third quarter, gross (profit) margin improved and adjusted earnings (EBIT) was better than expected. Sales declined, primarily due to unfavourable currency and the impact of retailer inventory movements on our US soup business.”
Progress was made in addressing supply chain issues faced in the first half, including the $200 million cost reduction initiative.
Ms Morrison said that consumer shifts toward fresher, less-processed foods are putting pressure on traditional packaged food, while there is mounting consumer demand for greater transparency about where and how food is made.
In the US Simple Meals segment for the third quarter, sales fell 6% to $630 million, while US soup sales decreased 10%.
For Global Baking and Snacking, sales fell 2% to $555 million. Sales gains in fresh bakery products, crackers and cookies were partly offset by sales declines in frozen products. Arnott’s sales increased, driven by gains in Australia and Indonesia.
In International Simple Meals and Beverages, sales declined 6% to $175 million, despite sales gains in the Asia Pacific region and Canada.
For US Beverages, sales fell 2% to $187 million, with declines in V8 V-Fusion beverages partly offset by gains in V8 Splash beverages.
In recent years, Campbells has moved increasingly into organic and fresh foods, launching more organically labelled soup products and acquisitions of baby foods maker Plum Organics and fresh juice supplier Bolthouse Farms.
In Australia, Campbells markets Campbells’ canned soups and Simply Soups in aseptic cartons; Arnott’s Tim Tams and biscuits; and a large range of Arnott’s snacks and crackers such as Jatz, Sao and Vita-Weat.