Campbell Soup Company (NYSE:CPB) early Friday posted worse than expected fiscal third quartr earnings results, as margins fell amid rising costs.
The Camden, NJ-based packaged foods maker reported Q3 earnings per share (EPS) of $0.59, which was $0.05 worse than the Wall Street consensus estimate of $0.64.
Revenues fell 0.9% from last year to $1.85 billion, also missing analysts’ view for $1.87 billion. Campbell’s reported a 1% decline in organic sales, while volumes remained mostly flat.
Gross margins slid 0.4 percentage points from 37.0% to 36.6% in the latest period, hurt by higher costs.
Looking ahead, CPB raised its full-year EPS outlook to a range of $3.04 to $3.09, up from $3.00 to $3.09 previously. That’s still in-line with the $3.06 per share that analysts are expecting. However, Campbell’s cut its revenue forecast to a range of flat to down 1%, compared with a prior +0% to +1% range. That new revenue guidance implies sales of $7.88 to $7.96 billion, while Wall Street is looking for $7.95 billion.
The company commented via press release:
“This was a challenging quarter across the food industry as top-line growth remained scarce, especially in center store categories. The industry, including Campbell, experienced significant consumption declines early in the calendar year. These industry trends coincided with weak consumer spending, which was at its lowest growth rate since 2009. While we rebounded with sales growth in March and April, we were unable to offset the earlier declines.”
Campbell Soup Company shares fell over 5% in premarket trading Friday following the report. Year-to-date, CPB had already declined -4.70% prior to today’s news, versus a 6.38% rise in the benchmark S&P 500 index during the same period.