Campbell Soup's new CEO Denise Morrison warned earlier that fiscal 2012 would be a "transition year."
On Tuesday, the Camden food processor announced first-quarter results that showed sales declined 1 percent to $2.16 billion. Net income was down 5 percent at $265 million, while earnings per share were flat at 82 cents per share, for the quarter ended Oct. 30.
Shares of the 142-year-old company were down 6 percent, or $2.18, to $31.44 shortly before noon.
U.S. soup sales were down 4 percent. The company said lower volumes were "partly offset" by higher prices. Sales of condensed soups -- the kind where you add a can of water -- were down 4 percent, while ready-to-serve soup sales were down 9 percent.
That said, those soup sales were better than Campbell Soup had expected after pulling back on heavy promotions and starting its advertising later this year.
What was working in the quarter was Campbell's Pepperidge Farm unit where sales rose 5 percent, again thanks to higher prices. However, trends in Australia, where Campbell's owns the Arnott's brand, declined.
"We are adjusting our plans and programs as Australian consumers increasingly reflect a recessionary mind-set which is impacting brands in Australian supermarkets," Morrison said on a conference call with financial analysts.
Chief financial officer B. Craig Owens said that branded competitors increases their U.S. soup sales by 4.7 percent in the quarter, while private-label soup sales rose by 7 percent. Campbell Soup lost market share as "we focused on stabilizing soup profits," he said.
Morrison, who took over as CEO Aug. 1, said the company is "confident in our growth strategies" but noted that "consumers continue to be impacted by the challenges in the global economy."
"There's little doubt that the pronounced cautionary constraints that have characterized consumer behavior since the onset of the financial crisis are now the new norm for the food and beverage sector and we are proactively addressing it," she said.