US: Campbell Soup's Q1 beverage profits slide
- First-quarter beverages operating profits down by 45% to US$30m
- Beverage net sales drop by 3% to $198m
- Group net profits decrease by 5% to $265m
- Group net sales dip by 1% to $2.16bn
Campbell Soup's drinks division saw profits slide in Q1
Campbell Soup Co has recorded a decline in profits in its beverages division on the back of cost inflation and increased marketing spending.
The unit, which produces V8 fruit and vegetable juice, saw operating profits slide in the three months to the end of October by 45% to US$30m. Sales dropped to $198m, a 3% decline on the comparable period last year, the company reported today (22 November).
Campbell said it increased promotional spend during the period in response to “intensified competition and new entrants” into the 100% vegetable and fruit juice categories.
Group net profits also declined, by 5% to $265m, while operating profits slid by 6.3% to $416m. Sales in the period were down by 1% to $2.16bn.
“In US beverages, we faced increased inflation, a weaker category and intensified competition, with new entrants in both 100% vegetable juice and fruit and vegetable blends,” said Campbell's president and CEO, Denise Morrison. “Although our consumption growth outpaced the category and our market share increased, this required significant investment to protect our business.”
Nonetheless, Morrison said the company will increase investment in “brand building and innovation programmes” this fiscal year.
Click here to view the earnings release.
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