In its earnings release today, the company blamed "a challenging consumer environment" for the soggy performance of its soup business, even with the help of promotional activity.
On the company's earnings call, CEO Denise Morrison said:
Overall, organic net sales grew 1% which was 1% below our expectations, and I'm disappointed that we failed to deliver the sales growth that we anticipated in the third quarter.
We believe this is in part a reflection of the persistence of an exceptionally challenging consumer environment as many others in the industry have noted, consumers are suffering from continuing underemployment, reductions in the SNAP Program and rising home, fuel, and healthcare costs.
She's right, except there was a time canned soup was considered recession proof.
Based on these results, apparently it isn't and hasn't been for quite awhile.
Yet a year ago, when the economy arguably was worse, the company's soup business was booming -- up 14%, thanks to a combo of some new soups, a colder winter and higher pricing.
The difference this year: The weather was worse and the consumer, arguably, isn't.
Rather than simply blame tough comps against such a banner performance the year before, Morrison, however, added that bunk about the "challenging consumer environment."
Reality: This isn't about the consumer. It's about canned soup and an increasingly stale portfolio of products.
The proof is in the numbers: Without its $1.5 billion acquisition of Bolthouse Farms two years ago, revenues would be flat, at best. And even with that deal, earnings are below where they were in 2005.