US: Campbell Soup Co posts Q1 beverage sales drop
- Q1 net sales in US beverages down 8% to US$173m
- Operating profits down 20% to $24m
- Group profits down 30%
- Blames restructuring costs
Campbell Soup Co's CEO said she was "disappointed"
Campbell Soup Co has posted a first-quarter drop in US beverage sales after underperformance by its V8 brand.
Q1 net sales in the US beverages unit were down 8% to US$173m in the three months to the end of October, Campbell said today (19 November). The unit's operating profits were also lower, by 20% to $24m.
The falls were down to lower sales and volumes in the V8 V-Fusion line, while sales of V8 vegetable juice and V8 Splash beverages also declined, Campbell said.
The falls mirrored the company's overall performance as it was forced to cut its forecast for annual sales and profits after a “disappointing” first quarter.
The US group recorded profits of US$172m in the three-month period compared to $245m a year earlier.
Campbell blamed the decline on restructuring-related costs, as well as on tax expenses and foreign currency hedging costs associated with the sale of its European simple meals business.
"I'm disappointed in Campbell's first-quarter performance," said CEO Denise Morrison. "While we anticipated a challenging first quarter, the impact from retailer inventory movements was greater than anticipated and accounted for more than half of the decline in organic sales.”
On the beverage unit, Morrison said Campbell is “implementing plans to improve the performance”.
One hour after the opening of the New York Stock Exchange today, Campbell's share price had dropped by 6%.
To read the company's full results, click here.
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