NEW YORK (AP) — Campbell Soup on Tuesday reported a stronger-than-expected profit for its fiscal fourth quarter as retailers ran promotions to warm up soup sales and stocked up on inventories.
The Camden, N.J., company also issued a rosier outlook for its fiscal 2013. Its stock edged up in morning trading after briefly touching its highest level in almost two years earlier in the session.
As part of its push to turn around its faltering soup business, Campbell plans to introduce dozens of new soups and sauces this fall aimed at attracting younger consumers, which it refers to as Millennials.
The sales increase in the latest quarter did not shed much light on how those efforts will fare, however, as Campbell attributed the growth in part to retailers running promotions and stocking up on inventories for its traditional condensed soups, such as chicken noodle and tomato. The company said inventory levels at the start of the quarter were lower than they were a year ago.
Campbell Soup Co. said it earned $127 million, or 40 cents per share, for the period ended July 29. In the year ago period — when the company was weighed down by restructuring charges — it earned $100 million, or 31 cents per share.
Stripping out acquisition-related costs in the latest quarter, earnings were 41 cents per share. Analysts surveyed by FactSet expected 39 cents per share.
Revenue was basically flat at $1.61 billion, but beat Wall Street's $1.59 billion estimate.
Sales of simple meals — which include sauces, soup and broths — rose 7 percent in the U.S. during the quarter, with soup sales gaining 9 percent. That marked the first increase since the third quarter of 2010 and the largest increase since the first quarter of 2009.
Condensed soup sales rose 14 percent and broth sales climbed 4 percent. Sales of ready-to-serve soups edged up 1 percent, with sales of "Chunky" soups up slightly.