Campbell Soup raises profit forecast as cost cuts boost margins
By Anjali Athavaley and Subrat Patnaik
(Reuters) - Campbell Soup Co (CPB.N: Quote) reported a higher-than-expected quarterly profit and raised its full-year earnings forecast on Tuesday, helped by cost-cutting measures introduced in July.
Like its rivals, Campbell has been struggling to grow as consumers demand more transparency from food companies and opt for healthier selections.
As a result, the company, whose products also include Pepperidge Farm cookies and Goldfish crackers, said in July that it was targeting cost savings of $250 million annually by the end of fiscal 2018.
The effort is delivering results sooner than expected: The company now expects to deliver $80 million to $100 million in savings this fiscal year, up from the previous goal of $60 million.
Campbell shares were up 3 percent at $51.28 in morning trading.
"I'm confident the actions we're taking will set Campbell apart from other food companies and strengthen our growth trajectory over time," Chief Executive Officer Denise Morrison said on a call with analysts. However, she said economic conditions remained challenging.
Sales, adjusted for items such as the June acquisition of hummus maker Garden Fresh Gourmet, were flat in the first quarter ended Nov. 1 compared with a year earlier.
Declines in the company's Americas simple meals and beverages business, which includes soups, and Campbell Fresh, which includes Bolthouse Farms products, offset growth in the global biscuits and snacks division. Continued...