Campbell looks mmm mmm good in Q4

Campbell made solid progress in fiscal 2013 as the company executed its dual mandate to strengthen core business and expand into higher-growth spaces. Its full-year sales and adjusted EBIT growth were consistent with its fiscal 2013 guidance, and its EPS growth exceeded expectations.

The performance of the company’s U.S. Soup was the centerpiece of its progress in strengthening its core business, delivering 5% sales growth for the year by optimizing all the drivers of demand and accelerating consumer-focused innovation. Campbell’s Pepperidge Farm business delivered continued growth in Goldfish crackers and expanded its share in fresh bakery. 

The company did face some challenges, however, most notably in its underperforming U.S. Beverages and North America Foodservice businesses.

“We made tangible progress on the second part of our dual mandate to expand into higher-growth spaces by driving breakthrough innovation and accelerating external development,” said Denise Morrison, Campbell’s president and CEO. “In fiscal 2013, we launched many new products, including Campbell’s Skillet Sauces and Campbell’s Go Soups to reach new consumers, such as Millennials.”

The company also acquired Bolthouse Farms, Plum Organics and the Kelsen Group. These acquisitions have combined annualized sales of approximately $1 billion. Bolthouse Farms delivered strong results in fiscal 2013. Plum Organics has allowed the company to expand its footprint in the premium organic baby food segment. Meanwhile, the addition of Kelsen, a leading producer of premium butter cookies, has allowed the company to have presence in China and Hong Kong. The company also entered strategic alliances in Mexico to expand its access to manufacturing and distribution capabilities in the market.

“As previously announced, we are in final and exclusive negotiations for the potential sale of our simple meals business in Europe, which includes brands such as Liebig in France, Erasco in Germany, Blå Band in Sweden and Devos Lemmons and Royco in Belgium. This potential transaction reflects a strategic choice. Across our company, we are focusing our investments, resources and talent on iconic brands that we believe we can grow around the world,” added Morrison. “Together, the actions under our dual mandate are reshaping our brand portfolio and shifting our center of gravity for a greater growth trajectory in the long term.”

Campbell expects to see continued growth in its U.S. Soup and Pepperidge Farms businesses. The company remains focused on increasing sales from faster-growing segments in North America; driving innovation with the launch of more than 200 new products; expanding availability in multiple channels; expanding its packaged fresh offerings; and accelerating growth in markets like China, Indonesia, Malaysia and Mexico. On Aug. 12, the company announced the potential sale of its European simple meals business. 

For the fourth quarter ended July 28, the company reported net sales of $1.7 billion, up 13% from $1.5 billion for the year-ago quarter. Net sales adjusted to exclude the impact of acquisitions and currency were $1.54 billion, up 1% from the year-ago quarter.  

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