CAMDEN, N.J. (AP) — Campbell Soup’s first-quarter net income tumbled 30 percent on declining U.S. soup sales and rising costs.
The Camden, N.J. company fell well short of Wall Street expectations and it cut its forecast for the year after the slow start.
Shares dropped 7 percent before the opening bell Tuesday.
CEO Denise Morrison, who said she was disappointed in the company’s start to the fiscal year, pointed to the timing of the Thanksgiving holiday, later this year than last, which is pushing shipments into the second quarter.
“We expect holiday timing to have a positive impact on our second-quarter results,” Morrison said. “The second quarter is off to a solid start, as we are seeing stronger shipments of soup, broth and stuffing.”
The company had also boosted advertising in the first quarter to support new products, Morrison said, including the marketing of recent brand acquisition Bolthouse Farms.
Still, U.S. soup sales declined 6 percent as retailers adjusted inventories. U.S. simple meals sales fell 4 percent, while sales for the U.S. beverages unit dropped 8 percent.
Campbell Soup Co. earned $172 million, or 54 cents per share, for the quarter ended Oct. 27. That’s down from $245 million, or 78 cents per share, a year earlier.
Excluding restructuring charges and other one-time costs, Campbell’s earnings were 66 cents per share, 20 cents shy of analyst projections, according to a poll by FactSet.
Revenue dipped 2 percent to $2.17 billion from $2.21 billion. Wall Street was looking for $2.29 billion in revenue.
Sales for the global baking and snack division increased 6 percent. The international simple meals and beverages segment reported a 13 percent drop in sales, hurt in part by currency exchange rates and greater promotional spending.
Sales for Bolthouse and foodservice rose 2 percent.
Campbell Soup now expects adjusted 2014 earnings to increase between 2 percent and 4 percent, or $2.53 to $2.58 per share. Revenue is forecast to rise by 4 percent to 5 percent. Its prior guidance called for adjusted earnings growth of 3 percent to 5 percent.
Analysts expect full-year earnings of $2.59 per share on revenue of $8.48 billion.
Shares of Campbell Soup fell $2.81 to $39 in premarket trading.