July 24, 2012 / 2:16 PM / in 5 years

UPDATE 3-Campbell sees sales lower than long-term goal

* Says return to goal taking longer than expected

* Stands by fiscal 2012 forecast

* Reducing marketing, advertising in fiscal 2013

* Shares down more than 1 percent

By Martinne Geller

CAMDEN, NEW JERSEY, July 24 (Reuters) - Campbell Soup Co’s performance in the upcoming fiscal year will be below its long-term targets as a turnaround takes longer than expected amid a difficult operating environment, executives said.

The company said on Tuesday it plans to return to growth in fiscal 2013, which starts on Aug. 1, but that it will not reach its long-term targets, which call for sales growth of 3 percent to 4 percent and earnings per share growth of 5 percent to 7 percent.

“The return to our long-term targets will take longer than expected,” Chief Executive Officer Denise Morrison told a gathering of analysts and investors at its headquarters in Camden, New Jersey. “I regret that, but I‘m not deterred by it.”

The company declined to give a specific 2013 forecast, saying it will provide more details when it reports fourth-quarter earnings in September.

Campbell stuck to its 2012 sales forecast, and said adjusted earnings are expected to decline at a level near the upper end of its forecast range of 5 percent to 7 percent.

After several winters of weak performance, due in part to heavy discounting and a lack of innovation, Campbell and its new CEO are trying to heat up sales with a range of new kinds of soups, sauces and cookies, from Thai green curry skillet sauce to Milano salted pretzel slices.

Morrison, who has been at top for nearly a year, has shifted more of the company’s marketing budget to advertising instead of discounting. Discounting, over time, reduces profits and erodes brand equity.

But for fiscal 2013, the company’s overall marketing budget will be down modestly, with advertising for U.S. soups down as well. The company said it will shift some of its budget to fund marketing for new products instead of existing products.

Advertising and consumer promotion expenses were $492 million in 2011 and $515 million in 2010, the company said.

Earlier this month Campbell said it planned to buy Bolt house Farms for $1.55 billion in cash, adding refrigerated juices and baby carrots to its portfolio of canned soups and V8 vegetable drinks.

With the move, it will expand into the produce section, an area of the supermarket that gets more foot traffic than the center of the store, where most of Campbell’s existing products are.

Through Monday’s close, Campbell shares were down 1 percent so far this year. The Dow Jones Food and Beverage Index , by contrast, rose more than 5 percent over the same period.

Shares were down 45 cents, or 1.4 percent, at $32.40 on the New York Stock Exchange on Tuesday afternoon.

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