Shares spike, but Campbell Soup’s earnings offer little to cheer about

Shares in Campbell Soup Co. were up as much as 10 percent Wednesday after the Camden company’s latest quarterly earnings topped Wall Street expectations and it raised its profit target for the fiscal year ending next month.

The devil, as always, is in the details, though. At closer look, Campbell’s earnings for the three months ended April 28 were less than rosy.

Including Snyder’s-Lance Inc. — one of the country’s largest salty-snack makers that Campbell acquired in March 2018 — and the impact of changes in the value of currencies, sales climbed 12 percent to $2.39 billion.

Excluding the contribution from Snyder’s-Lance, Campbell Soup saw flat sales in the quarter at $1.88 billion.

Sales in Campbell’s meals and beverages division, which includes its namesake soups, long the company’s profit engine, were comparable to last year’s. Even in global biscuits and snacks, sales were up only 1 percent, excluding sales of the added Snyder’s-Lance brands.

Declines in the company’s international snack business, which is up for sale, offset gains by Pepperidge Farm, which has logged 18 consecutive quarters of sales gains, excluding acquisitions, the company said.

Mark Clouse, who took over as Campbell’s chief executive in January, told analysts on a conference call that it was “encouraging" that the quarter’s decline in soup sales to consumers in the United States was 2.6 percent compared with 5.5 percent in the first half of the year.

The company is in the midst of trying to offset the declining sales from canned soup as consumers look for newer options. As part of that effort, the company had bought Bolthouse Farms in 2012 for $1.6 billion but recently agreed to sell for $510 million. Clouse, the new CEO, now faces the task of getting the 150-year-old company on a growth track while under pressure from activist investor Dan Loeb.

Clouse, who is scheduled to present broader plans for Campbell at an analyst meeting next week in Camden, also said he had been getting “a healthy education” about what is working in soup marketing.

The successes he mentioned were a marketing campaign for condensed soups, such as tomato and cream of mushroom, used in cooking and in-store promotions to get consumers to try the company’s relatively new Well Yes! brand, which is aimed at consumers looking for packaged foods with “clean” labels free of artificial ingredients.

Among the positives in Wednesday’s report, Campbell boosted its projected full-year earnings per share to the range of $2.50 to $2.55 from the previous range of $2.45 to $2.53. That compares with $2.87 per share in the 12 months ended July 29, 2018.

Campbell’s shares closed Wednesday up 10 percent to $41.93./