Campbell Soup chief notes effects of weather

Posted: February 16, 2014

Campbell Soup Co. has weather issues on both sides of the country.

In the East, there's the cold and the snow, which normally spur consumers to eat up the soup they have in their cupboards and then buy more.

But that doesn't always work out.

"We definitely acknowledge a benefit of cold temperatures, but we think it was offset by unfavorable weather conditions. We had plant closures for a while, retail store closures, and some lost business in the food-service sector," Denise Morrison, Campbell's president and chief executive, said Friday during a teleconference on the Camden company's second-quarter results.

In the West, meanwhile, the lack of rain threatens to wreak havoc on agriculture.

"The drought in California is probably going to have an impact on our tomato and our processed-tomato cost structure," B. Craig Owens, Campbell's chief financial officer, said on the call. That's for the future, though, because Campbell has prices "pretty well locked in" for this year, Owens said.

Those weather problems didn't stop Campbell from having a quarter that Wall Street cheered. The company's shares closed up $2.04, or 4.98 percent, at $43.01 Friday.

Campbell's total sales rose 5.5 percent to $2.28 billion in the quarter ended Jan. 26. U.S. soup sales rose 5 percent, including a 21 percent gain in sales of broth. Morrison attributed the strong gain in broth in part to the fact that more people are making soup at home with Swanson broth.

Net profit rose to $325 million, or $1.03 per share, from $190 million, or 60 cents per share, a year earlier, the company said.

An analyst asked Campbell executives to quantify the impact of coming food stamp cuts on Campbell.

That's just one of many issues for consumers - which are in turn affecting Campbell, Morrison said.

"They're dealing with lower employment, higher payroll taxes, health-care exchanges, lower discretionary spending available on food, so the food stamps is all part of that," Morrison said.

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