US: Campbell Soup's FY beverage profits slide
- Full-year beverages profits slide by 39% to US$30m
- Sales drop by 1% to $176m
- Group net profits decline by 4.6% to $805m
- Campbell pleased to be finishing "a very difficult fiscal year"
Campbell blamed “significant cost inflation” on the firm's beverages profits decline
Campbell Soup Co has said that cost inflation and increased competition hit full-year profits at its beverage division.
For the year to the end of July, net profits in the firm's US beverages unit slid by 29% to US$30m, Campbell reported today (2 September). The company blamed "significant cost inflation", and increased promotional spending.
Sales in the period dropped by 1% to $176m on the back of a decline in sales of the company's V8 vegetable juice. Campbell launched two variants of its V8 V-Fusion energy and a range of V8 energy shots earlier this year. In Feburary, the firm pledged to expand its presence in soft drinks with a raft of product launches in the second half the of the year.
For the year to the end of July, the group earned net profits of $805m, a 4.6% decline on the year before. Campbell's full-year EBIT slid by 5.2% to $1.28bn, while sales increased by 1% $7.72bn, thanks, the company said to "price and sales allowances" and a benefit from foreign exchange.
Campbell's president and CEO, Denise Morrison, said the company was pleased to be "finishing a very difficult fiscal year with some positive momentum and a new strategic direction".
The company said its annual results were "slightly ahead" of the forecasts it made in July. Consequently, the company changed its guidance for the current financial year. It still expects net sales to be flat or to grow by up to 2%. However, adjusted EBIT is now forecast to fall by between 7% and 9%, compared to its July forecast of a decrease of 6% to 8%. Campbell said it now forecasts a drop in adjusted EPS of 5% to 7% from the adjusted base of $2.54. In July, it predicted a fall of 4% to 6%.
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