This article incorrectly listed Campbell Soup Co.'s net sales as $2.2 million instead of $2.171 billion. This error has been changed.
- Campbell Soup Co. reported second-quarter earnings that missed analyst expectations. The company's earnings fell to $205 million from $414 million in the year-ago period, according to a company release.
- Net sales for the company dipped 1% to $2.171 billion while organic sales fell 2% as a result of weak volumes and increased promotional spending. The company expects a 0-1% increase in sales growth for 2017.
- In particular, Campbell Fresh segment sales fell 8% year-over-year to $260 million, resulting from weak sales of Bolthouse Farms refrigerated beverages and Garden Fresh Gourmet.
Campbell Fresh saw the most significant Q2 sales declines because of "weather-related issues in carrots" and a Bolthouse Farms Protein Plus recall in June 2016, according to Campbell President and CEO Denise Morrison. The company doesn't expect much growth from the segment in fiscal 2017.
Campbell's packaged fresh category was supposed to hold huge potential for the company. The segment extends Campbell's portfolio beyond processed offerings in the center store to the increasingly coveted store perimeter. C-Fresh played an integral role in the company's efforts to make better-for-you products a larger part of its product selection.
Campbell Fresh selected new management in September 2016 after a similarly disappointing performance from the segment. Morrison is betting that this new management will return Bolthouse Farms and the Campbell Fresh category to sustained top-line growth.
“C-Fresh performance was below our expectations," the company said in a release. "The new C-Fresh management team has conducted an extensive review of the business and has determined the recovery will take longer to execute than we originally planned. As a result, we no longer expect C-Fresh to grow this fiscal year. Despite these challenges, we remain confident in the growth potential of the packaged fresh category. C-Fresh continues to be an important strategic business for Campbell to meet growing consumer demand for fresh foods and interest in health and well-being."
The company saw Q2 sales increases in its core U.S. soup, simple meals and Pepperidge Farm snacks businesses. U.S. soup sales were fueled by good performances from ready-to-drink soup varieties Chunky and Well Yes!, which exceeded performance expectations.