Campbell Soup raises earnings outlook for fiscal 2016

Campbell Soup Co. on Tuesday raised the earnings outlook for its fiscal year ending next summer, after benefiting in its first quarter from higher prices for products and gains in supply-chain efficiency.

That news helped push Campbell's shares to a 3.09 percent gain on the New York Stock Exchange, where it closed at $51.33, up $1.54, near a 52-week high of $51.67 in September.

The Camden company, whose brands include V8 and Pepperidge Farm, also warned, however, that sales in fiscal 2016 are expected to be flat to down 1 percent, in part because of the negative impact of foreign-currency translation.

In the first quarter, core sales were flat. Including the impact of currency translation from Campbell's operations in Australia, China, and elsewhere, sales were down 2.3 percent, to $2.2 billion from $2.25 billion in the comparable period last year.

Campbell's chief executive, Denise Morrison, said that she was pleased sales excluding the gain from an acquisition were comparable to strong results last year, but that "we recognize that we have more work ahead to improve our growth trajectory."

U.S. consumers continue to face challenging economic conditions, and developing markets such as China, which Campbell has targeted as a growth market, are also facing "macro-economic challenges," Morrison told analysts on a conference call.

The company's Bolthouse Farms operation, the centerpiece of an effort to increase Campbell's presence in the market for foods that are fresher than its traditional canned and jarred products, was hurt by a slowdown in demand for carrot concentrate in Japan, she said.

For years, Campbell has faced the issue of deriving the bulk of its earnings from slow-growing soups, sauces, and juices. That division accounted for 59 percent of sales in the first quarter, but 73 percent of its operating earnings.

By contrast, Campbell Fresh, which includes Bolthouse and the recently purchased Garden Fresh Gourmet salsa producer, accounted for 11 percent of sales and just 4 percent of earnings.

Campbell's original adjusted earnings-per-share forecast was in the range of $2.53 to $2.58. The new range is $2.75 to $2.83, with 6 to 9 cents per share coming from improved performance, the company said.

hbrubaker@phillynews.com

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