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TheStreet Open House

Campbell Reports Fourth-Quarter And Full-Year Results

Stocks in this article: CPB

Sales for the fiscal year were $7.707 billion, comparable to the prior year. Sales were impacted by the following factors:

  • Volume and mix subtracted 2 percent
  • Price and sales allowances added 3 percent
  • Increased promotional spending subtracted 1 percent

Full-Year Financial Details

  • Gross margin was 38.8 percent compared with 40.2 percent a year ago. The decrease in gross margin percentage was due to cost inflation, increased promotional spending and unfavorable mix, partly offset by higher selling prices and productivity improvements.
  • Marketing and selling expenses increased $13 million to $1.02 billion, primarily due to a 3-percent increase in advertising and consumer promotion expenses.
  • Administrative expenses decreased $1 million to $611 million.
  • EBIT was $1.212 billion compared with $1.279 billion in the prior year. Excluding items impacting comparability in both periods, adjusted EBIT declined 9 percent to $1.227 billion, compared to adjusted EBIT of $1.342 billion in the prior year. The decrease was primarily due to the decline in gross margin percentage.
  • Adjusted net earnings per share were $2.44 compared with adjusted net earnings per share of $2.54 in the prior year, a decrease of 4 percent. The decline reflected the lower EBIT, partially offset by the benefit of fewer shares outstanding.
  • Cash flow from operations was $1.120 billion compared with $1.142 billion in the prior year. The decline reflected the impact of lower cash earnings, partly offset by lower pension contributions.
  • In fiscal 2012, Campbell repurchased 12.6 million shares for $412 million under its $1 billion strategic share repurchase program announced in June 2011 and the ongoing practice of buying back shares sufficient to offset those issued under incentive compensation plans.

Summary of Fiscal 2012 Fourth-Quarter and Full-Year Results by Segment

U.S. Simple Meals

Sales for U.S. Simple Meals were $461 million for the fourth quarter, an increase of 7 percent compared with the year-ago period. A breakdown of the change in sales follows:

  • Volume and mix added 4 percent
  • Price and sales allowances added 3 percent

U.S. Soup sales increased 9 percent compared with the year-ago quarter. The sales growth was primarily attributable to condensed soup, which benefited from movements in retailer inventory levels associated with the timing of promotional activity, as well as consumption increases.

  • Sales of “Campbell’s” condensed soups increased 14 percent, with double-digit growth in eating varieties and gains in cooking varieties.
  • Sales of ready-to-serve soups increased 1 percent. Sales of “Campbell’s Chunky” soups increased slightly while sales of “Campbell’s Select Harvest” soups declined. “Campbell’s Slow Kettle” soups, launched in July 2011, contributed to the sales growth.
  • Broth sales rose 4 percent, primarily due to volume-driven gains in aseptically packaged broths and the benefit of “Swanson Flavor Boost” concentrated broth launched in July 2011, partly offset by declines in canned broth.

U.S. Sauces sales increased 4 percent compared to the year-ago quarter. Sales of both “Prego” pasta sauces and “Pace” Mexican sauces were driven by volume gains, benefiting from increased advertising and promotional support.

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