(Reuters) - Campbell Soup Co (CPB.N) 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.
Campbell said it expected fiscal 2016 sales to be flat to down 1 percent due to the effects of the strong dollar, which reduces the value of goods sold overseas. Previously, it expected sales to be flat to up 1 percent.
The company raised its profit growth forecast, excluding special items, to a range of 4 percent to 7 percent from between 3 percent to 5 percent as margins improve.
The new outlook means earnings of $2.75 to $2.83 per share. Analysts on average expect $2.59.
Total net sales fell 2.3 percent to $2.20 billion in the quarter, slightly below the analysts’ average estimate of $2.21 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to the company fell to $194 million, or 62 cents per share, from $248 million, or 78 cents per share.
Excluding items such as restructuring charges and an accounting change related to post-retirement plans, earnings of 95 cents per share beat the average Wall Street estimate of 76 cents.
At Monday’s close, Campbell’s stock had risen about 13 percent this year.
Reporting by Anjali Athavaley in New York; Editing by Ted Kerr and Lisa Von Ahn