CAMDEN, N.J.--()--Campbell Soup Company (NYSE: CPB) today announced a comprehensive plan to boost the performance of its condensed soup portfolio in the United States, a business that generated more than $1 billion in net sales in fiscal 2009. Campbell plans to enhance more than 60 percent of its condensed line with product improvements, further sodium reduction, more contemporary packaging, improved shelving systems and new marketing aimed at the simple meals category.
These upcoming plans for condensed soup build on Campbell’s substantial investments in its entire U.S. Soup business over the last several years, designed to improve the quality, convenience, variety and wellness profile across its portfolio. As a result of these investments, Campbell has increased net sales of U.S. soup every year since 2003.
Douglas R. Conant, Campbell’s President and CEO, said, “We are committed to accelerating the performance of our existing portfolio, most notably in U.S. soup, and continuing to lay the foundation for superior long-term growth. We are going to fire up our important condensed soup business and step up the competitive posture of our ready-to-serve products to accelerate both our top- and bottom-line growth.”
Conant continued, “With the improvements and innovations we’ve made over the past several years and our plans for next year, we will be able to unleash soup’s full competitiveness against the simple meals category. We are now in a position to reframe the way we compete in the broader simple meals category. Our new marketing efforts will further position soup as a key part of a healthy, well-balanced simple meal and help consumers make more informed choices. We will build on the success of our high-margin, market-leading condensed soup franchise—enhancing its quality, making it healthier and increasing its relevance. We are confident that our continued investments will make ‘Campbell’s’ condensed soup even more relevant and contemporary for today’s consumers.”
Updated Fiscal 2010 Guidance
Campbell reiterated its full-year guidance for adjusted earnings before interest and taxes (EBIT) growth of 6 to 7 percent and adjusted net earnings per share growth of 9 to 11 percent from the fiscal 2009 adjusted base of $2.21. The company revised its fiscal 2010 guidance for sales growth to 2.5 to 3.5 percent from the prior range of 4 to 5 percent. A detailed reconciliation of the adjusted fiscal 2009 information to the reported information is included at the end of this news release.
Major Plans for Condensed Soup
Campbell has a number of innovations planned for its U.S. condensed soup business in fiscal 2011:
The new and improved soups will be available at retail in August 2010.
Conant will share details with investors and the news media at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Fla., today at 10:30 a.m. Eastern Time. A webcast of the presentation will be available at www.campbellsoupcompany.com under the “Shareholder Event / Webcast Information” banner.
About Campbell Soup Company
Campbell Soup Company is a global manufacturer and marketer of high-quality foods and simple meals, including soup, baked snacks, and healthy beverages. Founded in 1869, the company has a portfolio of market-leading brands, including “Campbell’s,” “Pepperidge Farm,” “Arnott’s,” and “V8.” For more information on the company, visit Campbell’s website at www.CampbellSoup.com
This release contains “forward-looking statements” that reflect the company’s current expectations about the impact of its future plans and performance on sales, earnings, and margins. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and which are subject to risks and uncertainties. The factors that could cause the company’s actual results to vary materially from those anticipated or expressed in any forward-looking statement include (1) the impact of strong competitive responses to the company's efforts to leverage its brand power in the market; (2) the risks associated with trade and consumer acceptance of the company’s initiatives; (3) the company's ability to realize projected cost savings and benefits; (4) the company’s ability to manage changes to its business processes; (5) the increased significance of certain of the company’s key trade customers; (6) the impact of fluctuations in the supply or costs of energy and raw and packaging materials; (7) the risks associated with portfolio changes; (8) the uncertainties of litigation; (9) the impact of changes in currency exchange rates, tax rates, interest rates, debt and equity markets, inflation rates, economic conditions and other external factors; (10) the impact of unforeseen business disruptions in one or more of the company’s markets due to political instability, civil disobedience, armed hostilities, natural disasters or other calamities; and (11) other factors described in the company’s most recent Form 10-K and subsequent Securities and Exchange Commission filings. The company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.
Reconciliation of GAAP and Non-GAAP Financial Measures
Fiscal Year 2009 Net Earnings Per Share
Campbell Soup Company uses certain non-GAAP financial measures as defined by the Securities and Exchange Commission in certain communications. These non-GAAP financial measures are measures of performance not defined by accounting principles generally accepted in the United States and should be considered in addition to, not in lieu of, GAAP reported measures.
Items Impacting Diluted Net Earnings Per Share
The company believes that financial information excluding certain transactions not considered to be part of the ongoing business improves the comparability of year-to-year results. Consequently, the company believes that investors may be able to better understand its earnings results if these transactions are excluded.
The following items impacted diluted net earnings per share:
(1) In fiscal 2008, the company announced initiatives to improve operational efficiency and long-term profitability, including selling certain salty snack food brands and assets in Australia, closing certain production facilities in Australia and Canada, and streamlining the company’s management structure. In fiscal 2009, the company recorded expenses related to these initiatives of $15 million after tax, or $0.04 per share.
(2) In the fourth quarter of fiscal 2009, as part of the company’s annual review of intangible assets, a non-cash impairment charge of $47 million after tax, or $0.13 per share, was recorded related to certain European trademarks, primarily in Germany and the Nordic region.
(3) In the second quarter of fiscal 2009, the company recorded a $4 million tax benefit, or $0.01 per share, in discontinued operations related to the sale of the Godiva Chocolatier business.
The table below reconciles financial information, presented in accordance with GAAP, to financial information excluding certain transactions:
|Aug. 2, 2009|
|Diluted net earnings per share, as reported (a)||$||2.05|
|Add: Net adjustment from restructuring related costs (1)||0.04|
|Add: Net non-cash impairment charge on intangible assets (2)||0.13|
|Deduct: Tax benefit from the sale of the Godiva Chocolatier business (3)||(0.01)|
|Adjusted Diluted net earnings per share (a)||$||2.21|
(a) In the first quarter of fiscal 2010, the company adopted and retrospectively applied new accounting guidance related to the calculation of earnings per share. The retrospective application of the provision resulted in a reduction of the previously reported and adjusted diluted net earnings per share of $0.01 for fiscal 2009.
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