Campbell Soup hit by currency movements in Q4
Campbell Soup Company reported a profit decline of US$20 million in the fourth quarter as currency movements and an impairment charge hit the bottom line. On a comparable basis, however, profit rose 11 per cent. Similarly, adjusted sales fell 11 per cent due to the currency impact, one less trading week and the impact of divestitures, but comparable sales rose two per cent.
The world’s largest soup manufacturer and owner of the Arnott’s biscuit brand said the results had met expectations on the back of successful new innovations and an improved gross profit margin.
“We completed the year with a solid fourth quarter and delivered a strong year of earnings growth,” Douglas Conant, Campbell’s President and Chief Executive Officer, said. “We were able to overcome currency headwinds and other macroeconomic challenges to achieve adjusted earnings per share growth within our long-term target of between 5 and 7 per cent.”
“We delivered an outstanding year in our Asia Pacific business, produced a very solid year in Pepperidge Farm and continued to advance our plans in the emerging markets of Russia and China. We also improved our gross margins through a combination of pricing actions and productivity improvements and generated more than $1 billion in cash flow from operations.”
Anthony DiSilvestro, Vice President and Controller, added that their Australian biscuit performance had been strong but was hurt by the recent strength of the Australian dollar.
“Sales in our Arnott’s branded business in Australia increased in the quarter, driven by gains in both chocolate and savoury biscuits, partly offset by a decline in private label and industrial sales associated with a plant closing in Australia,” he advised.
“Operating earnings (for biscuits and snacks division) declined from $72.0 million to $69.0 million due to currency, one less week, and lower earnings in Arnott’s, partly offset by growth in Pepperidge Farms.”
Mr Conant said the company was looking forward to a prosperous year ahead on the back of new product launches.
“Over the last seven years, we have achieved consistent and sustainable business performance while improving our prospects for the future through investments in products, infrastructure and our geographic footprint. We have strong plans in place for the upcoming year and a broad slate of innovation across our portfolio of leading brands, especially in our U.S. soup business,” he concluded.
