Campbell Soup Co. reported its results for the fourth-quarter and full-year of fiscal 2013.
- Fourth-quarter sales increased 13 percent
- Fourth-quarter U.S. Simple Meals organic sales rose 4 percent, fueled by U.S. soup
- Fourth-quarter Global Baking and Snacking organic sales gained 5 percent
- Fourth-quarter adjusted net earnings per share increased 10 percent to $0.45
- Full-year adjusted net earnings per share increased 8 percent to $2.64
- European Simple Meals business reported as a discontinued operation
- Campbell provides fiscal 2014 guidance for continuing operations growth of 5 to 6 percent in sales, 5 to 7 percent in adjusted EBIT and 3 to 5 percent in adjusted EPS
Denise Morrison, Campbell’s president and CEO, said, “Campbell made solid progress in fiscal 2013 as we executed our dual mandate to strengthen our core business and expand into higher-growth spaces. Our full-year sales and adjusted EBIT growth were consistent with our most recent fiscal 2013 guidance, and our EPS growth exceeded that guidance.
“The centerpiece of our progress in strengthening our core business was the performance of U.S. Soup, which delivered 5 percent sales growth for the year by optimizing all the drivers of demand and accelerating consumer-focused innovation. In our Pepperidge Farm business, we delivered continued growth in Goldfish crackers, revitalized the cookies business and expanded our share in fresh bakery. We also faced some challenges this year and are taking actions to fix our underperforming U.S. Beverages and North America Foodservice businesses.”
Morrison continued, “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. 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.
“We also added a trio of growth engines through our acquisitions of Bolthouse Farms, Plum Organics and the Kelsen Group. These acquisitions have combined annualized sales of approximately $1 billion and give us exciting new brand platforms to create value and attract new consumers. Bolthouse Farms, which delivered strong results in fiscal 2013, is a leader in the fast-growing packaged fresh foods category. Plum Organics is the number-two brand in the fast-growing premium organic baby food segment. The addition of Kelsen, a leading producer of premium butter cookies, gives us a position in baked snacks in China and Hong Kong. We also entered strategic alliances in Mexico to expand our access to manufacturing and distribution capabilities in this important 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.
“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.”
Morrison concluded, “Looking ahead, we expect continued growth in our U.S. Soup and Pepperidge Farms businesses. We remain 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 our packaged fresh offerings; and accelerating growth in markets like China, Indonesia, Malaysia and Mexico. I’m excited about our direction and our progress. We have more work to do, but it’s undeniable that Campbell has come far in the last two years.”
Background on the presentation of results
On Aug. 12, 2013, the company announced the potential sale of its European simple meals business. This business, which was previously included in the International Simple Meals and Beverages segment, is now reported as a discontinued operation. Fourth-quarter results from discontinued operations reflect a non-cash impairment to reduce the carrying value of intangible assets, as well as a tax charge that is related to the potential sale.
Following a summary of total company net earnings and net earnings per share results, this news release separately presents the results of continuing operations and discontinued operations. We also present combined sales and adjusted EBIT of continuing operations and discontinued operations for ease of comparison to the company’s most recent fiscal 2013 sales and earnings guidance. A review of segment results from continuing operations for the fourth quarter and fiscal year is also provided.
Summary of total company net earnings and net earnings per share
In aggregate, the company reported a net loss for the quarter ended July 28, 2013, of $158 million, or $0.50 per share, compared with net earnings of $127 million, or $0.40 per share, in the prior year. Excluding items impacting comparability in both periods, adjusted net earnings increased 9 percent to $142 million compared with $130 million in the prior year’s quarter, and adjusted net earnings per share increased 10 percent to $0.45 compared with $0.41 in the year-ago quarter. A detailed reconciliation of the reported financial information to the adjusted information is included at the end of this news release.
Net earnings for the fiscal year were $458 million, or $1.44 per share, compared with $774 million, or $2.41 per share, in the year-ago period. Excluding items impacting comparability, adjusted net earnings increased 7 percent to $836 million, and adjusted net earnings per share increased 8 percent to $2.64 compared with $2.44 in the prior year.