Hurricanes And Price Competition Impact Campbell's Soup In Q1
A competitive retailer landscape, coupled with higher ingredient costs and the impact of hurricanes on logistics costs, were some of the factors impacting Campbell's Soup in the first quarter of its financial year, with the company announcing a 2% decrease in organic sales for the period.
In the quarter to 29 October, Campbell's Soup posted sales of $2.16 billion, down from $2.2 billion for the same period last year.
“This was a difficult quarter, particularly for our US soup business,” commented Denise Morrison, the president and chief executive of Campbell's Soup.
“The operating environment remains volatile, with a rapidly evolving retailer landscape and competitive activity pressuring the top line. Our bottom-line performance was negatively impacted by a lower adjusted gross-margin rate, due, in part, to cost inflation, higher carrot costs, and escalating transportation and logistics costs following the hurricane season.”
Soup Sales Decline
Its Americas Simple Meals and Beverages division was the main source of the decline, with US soup sales declining by 9% in the period.
“The sales decline was the result of one key customer's different promotional approach to the soup category for fiscal 2018, as we described last quarter,” said Morrison. “Importantly, our soup programme was well received in most of our other key customers, where consumer takeaway of our soup was up slightly.”
Sales in the group’s CPG segment increased, however, with a boost from its Garden Fresh Gourmet and Bolthouse Farms salad-dressing brands.
"In this challenging climate, we are focused on sharpening our plans for the remainder of the year while continuing to position Campbell for growth through investments to differentiate our brands, drive innovation and accelerate our e-commerce capabilities,” Morrison concluded.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.