Tags: Campbell | Outlook

Campbell Cuts 2011 Guidance After Weak Results

Wednesday, 10 Nov 2010 09:34 AM

Campbell Soup Co. has cut its outlook for fiscal 2011 because it spent more money to spur sales in the first quarter but shoppers didn't bite.

CEO Douglas Conant said competitors had steep promotions that the company chose not to match. Shares of the world's largest soup maker fell $1.27, or 3.5 percent, to $34.78 in premarket trading Tuesday.

Campbell, based in Camden, N.J., said it now expects full year revenue to grow between 1 percent and 3 percent. That's down from prior guidance of 2 to 3 percent. It expects earnings before interest and taxes to rise between 2 and 4 percent, down from 4 to 5 percent.

Based on the $2.47 per share the company earned last year, that implies a range of $2.52 to $2.57. Analysts polled by Thomson Reuters expected the company to earn $2.64 per share in the fiscal year, which ends in July.

The company said its outlook includes an expected 1 percentage point gain from currency translation. Sales abroad can fluctuate in value once they are converted back into U.S. dollars.

Campbell said first-quarter revenue will fall 1 percent and earnings before interest and taxes will drop 7 percent. It reports results Nov. 23.

Shoppers have been trading down to less expensive, store-brand products in the downturn and that has hurt Campbell, which also makes SpaghettiOs, Pace sauces and Pepperidge Farm breads and cookies in addition to its signature soups.

The company has rolled out new marketing and an increased focus on its soups to increase sales. But given all the competition in the market, results are still weak.

"Over the balance of the year, we believe that revised promotional strategies and continued cost and expense initiatives will yield stronger results, especially in the second half of the year," Conant said in a news release.

He said the company will have more details on its plans when it reports first-quarter results.

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Campbell Soup Co. has cut its outlook for fiscal 2011 because it spent more money to spur sales in the first quarter but shoppers didn't bite. CEO Douglas Conant said competitors had steep promotions that the company chose not to match. Shares of the world's largest soup...
Campbell,Outlook
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2010-34-10
Wednesday, 10 Nov 2010 09:34 AM
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