Campbell's U.S. soup sales again fall

For the fourth consecutive quarter, Campbell Soup Co. on Monday said sales in its core U.S. soup business declined compared with the prior-year period.

Overall, the Camden company Monday reported nearly flat sales, at $1.8 billion, for the fiscal third quarter ended May 1, as Pepperidge Farm baked goods and an Australian business had solid results, balancing out the weakness in its Chunky, condensed, and other soups.

Excluding unusual items in the comparable quarter a year ago, Campbell's net income climbed slightly, to $187 million, from $186 million. A 6 percent jump in adjusted earnings per share was driven by a reduction in shares outstanding.

The run of poor performance in the soup aisle - down 7 percent from the 2010 quarter - comes as Douglas R. Conant, who has been Campbell's chief executive officer since early 2001, prepares to retire at the end of July. Conant arrived after a period of tumult from 1997 through 2000, steadied the company, and steered it back onto a growth trajectory, until it faltered recently.

Conant's expected replacement, chief operating officer Denise Morrison, would have the same type of task at the beginning of her tenure as Conant had when he started. Morrison is slated to unveil her long-term strategy for Campbell on July 12 at an annual session with stock analysts in Camden.

For now, Campbell's strategy has shifted from last year's steep discounting - which failed to generate the anticipated volume gains - to an advertising push designed to get people to eat more of the soup they already have in the cupboard.

The assumption is that consumers will restock their cupboards with soup if they use what they have. As it is, Morrison said during Monday's conference call with analysts, financially squeezed consumers were not going to the store as often as they used to, reducing the number of chances they had to buy a can of soup.