(Reuters) - Campbell Soup Co (CPB.N) reported a better-than-expected quarterly profit as soup sales in the United States rose for only the second time in five quarters.
Sales in the company’s U.S. simple meals business, which includes soups, pasta and canned chicken, rose 8 percent to $928 million in the first quarter ended Nov. 2.
The business is Campbell’s largest and accounted for a third of total net sales last year.
But the soup business has been facing increasing competition from store brands and niche producers such as Pacific of Oregon, Harris Foods Co and Amy’s Kitchen Inc.
“Our U.S. soup performance was driven by a stronger seasonal sell-in and the timing of our quarter end relative to the Thanksgiving holiday,” Chief Executive Denise Morrison said in a statement.
U.S. soup sales rose 6 percent after shrinking 6 percent in the same quarter last year and 3 percent in the fourth quarter.
Sales in the global baked goods and snacks business, which includes brands such as Pepperidge Farm and Arnott’s biscuits in Australia, grew 3 percent to $627 million.
The company trimmed the lower end of its full-year sales and profit forecast, citing volatile foreign currency rates.
Campbell said it now expected adjusted earnings of $2.42-$2.50 per share, down from its previous forecast of $2.45 -$2.50 for the year ending July 2015.
Sales are expected to be flat or grow up to 2 percent, down from its earlier forecast of 1-2 percent growth.
Net income attributable to the company jumped 36 percent to $234 million, or 74 cents per share, in the latest quarter, from $172 million, or 54 cents per share, a year earlier.
The year-earlier quarter included a loss of 3 cents per share from discontinued operations.
Excluding items, the company earned 74 cents per share from continuing operations.
Net sales rose 4.2 percent to $2.26 billion.
Analysts on average had expected earnings of 72 cents per share on revenue of $2.22 billion, according to Thomson Reuters I/B/E/S.
Campbell shares were up marginally $44.75 in light premarket trading.
Reporting by Sruthi Ramakrishnan and Anjali Athavaley; Editing by Maju Samuel