Campbell Soup said Thursday that quarterly sales declined for its fresh products unit, which the company had been hoping would help it capitalize on the growing interest for fresh and wholesome foods.
The maker of canned soups, Pepperidge Farm cookies and V8 juices said sales fell 5 percent for the Campbell Fresh unit on declines of carrots and Bolthouse Farms beverages. When excluding the impact of its acquisition of Garden Fresh Gourmet, sales for the unit dropped 12 percent.
CEO Denise Morrison called the results for Campbell Fresh "disappointing," and said it was mostly the result of execution problems. She said the company was taking steps to ensure the unit "performs to its potential" and that she remains confident in the unit's ability to deliver growth over the long term.
The Camden, New Jersey-based company's traditional products fared better. Sales for the Simple Meals and Beverages were comparable to a year ago, as gains for Prego sauces offset declines in canned soups and V8 drinks. The biscuits and snacks unit saw a 1 percent sales increase, driven by gains in part by Pepperidge Farm Goldfish crackers.
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Campbell shares dropped more than 4 percent in premarket trading.
For its fiscal fourth quarter, Campbell reported a loss of $81 million, or 26 cents per share, after reporting a profit in the same period a year earlier. Earnings, adjusted for asset impairment costs and non-recurring costs, came to 46 cents per share. Analysts expected earnings of 50 cents per share.
Total revenue dipped slightly to $1.69 billion in the period, meeting Wall Street forecasts.
For the year, the company reported profit of $563 million, or $1.81 per share. Revenue was reported as $7.96 billion. [[223762671, C]]
Campbell expects full-year earnings in the range of $3 to $3.09 per share.
Campbell shares dropped $2.52, or 4.2 percent, to $58.20 in premarket trading about 30 minutes before the market open. They have risen 16 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 6 percent. The stock has risen 27 percent in the last 12 months.