Campbell back on track
to revive its sluggish $2 billion (€2bn) retail US soup business
was on track, but it declined to give earnings guidance for the
fiscal year that starts in August.
US soup company Campbell Soup Co. on Tuesday said a year-old plan to revive its sluggish $2 billion (€2bn) retail US soup business was on track, but it declined to give earnings guidance for the fiscal year that starts in August.
"It's a challenging year to forecast for us, given the fact that we've re-launched the company, experienced 9/11, then ran into an unusual winter that affected the way our portfolio performed," chief executive Douglas Conant told analysts on Tuesday, referring to warm winter weather that hurt sales of the world's largest soupmaker. "It's difficult for me to give any guidance."
Conant and other top executives detailed progress on changes ranging from the national rollout of new products such as microwaveable soups to manufacturing changes that improve soups' taste and appearance.
Wall Street analysts, however, said they wanted more evidence that the plan was driving up sales volumes, particularly in Campbell's well-known condensed soups, which account for the bulk of the company's soup sales. Campbell, based in Camden, New Jersey, has been fighting to maintain market share amid stiff competition from rivals such as General Mills' Progresso brand.
"Investors always want the blanks filled in, and to some extent there's progress being made at the company, but a reluctance to fill in the blanks for an '03 forecast was a little disappointing," said Prudential Securities analyst John McMillin. "It's just hard to get positive until you see more evidence of a turnaround."
Shares of Campbell have fallen more than 22 per cent this year, compared with the Standard & Poor's Packaged Food Index, which is down about 9 per cent. Campbell shares closed off 99 cents, or 4 per cent, to $23.25 on the New York Stock Exchange on Tuesday.
Campbell is expected to earn 14 cents a share on average in its fiscal fourth quarter, down from 15 cents a year earlier, according to analysts polled by Thomson First Call.
This autumn, Campbell will begin to shift production on condensed soups in vegetable varieties, such as its familiar tomato soup in the red-and-white label can, to new technologies that reduce exposure to heat, resulting in richer broths and firmer vegetables.
In the past year, Campbell has shifted production of about half of its ready-to-eat soups, made under the Chunky and Campbell's Select labels, to the new technologies. The soups are now available in grocery stores.
By autumn, the company's new microwaveable Soup at Hand line, which plays to consumers' increased demand for convenience foods, will be on shelves in supermarkets and convenience stores throughout the United States. The soup, which comes in a plastic container, will be priced at about $1.19 to $1.49, a significant premium over condensed varieties.
The three-year restructuring plan laid out a year ago is the brain child of Conant, a former Nabisco Foods executive who took the helm of the world's largest soup maker in early 2001. The plan calls for additional spending of up to $600 million on marketing and product and quality improvements throughout Campbell's businesses, which, besides soup, include Pepperidge Farm cookies, Godiva chocolates and Prego pasta sauces.
