Campbell Soup Company reported a rise in net earnings attributable to the company of $285m, or 95 cents per share, in the second quarter results for fiscal 2018, from $101m, or 33 cents per share, a year earlier.
The reported quarter benefited from a $124m gain related to the overhaul of the US tax code.
Net sales rose to $2.18bn from $2.17bn, beating analysts’ average estimate of $2.16bn, according to Thomson Reuters. Organic sales that exclude acquisitions and foreign exchange impacts, fell 2%
Denise Morrison, Campbell’s President and Chief Executive Officer, said despite the rise it was a “disappointing quarter”, driven by continued challenges in US soup and Campbell Fresh. She said that the decline in organic sales was largely due to the performance of Americas Simple Meals and Beverages, where US soup sales decreased by 7% based on the key customer issue they discussed last quarter.
She added: “Campbell Fresh did not meet expectations. Sales did not recover as anticipated due in part to headwinds in the super-premium juice category. Looking ahead to the spring, we expect our beverage innovation plans to drive improved beverage performance in the second half. We are committed to returning this business to profitable growth.
“Bright spots in the quarter included the sales performance of Global Biscuits and Snacks, particularly Pepperidge Farm and Kelsen, as well as our multi-year cost savings initiative. We have identified additional savings opportunities and are increasing our savings target to $500 million by the end of fiscal 2020."
In a statement, the company said that there was significant progress toward its long-term strategy to transform Campbell’s portfolio. In the quarter, it completed the acquisition of Pacific Foods to bolster its presence in the organic soup and broth market and announced plans to acquire Snyder’sLance.
Shares fell 1.9% in premarket trade, and are down 24% in the last 12 months,