Can Campbell’s new CEO heat up sales? Maybe with the right advertising
Steve’s breakdown: The key line in this article is “Morrison has indicated that Campbell’s moving to a sharper focus on advertising, rather than promotions and discounting of the company’s food products.” Does that mean a new ad agency? Maybe. And that should be enough to go in there and pitch.
CAMDEN, NJ: : Campbell Soup investors will look to newly appointed CEO Denise Morrison when the company reports fourth-quarter results Friday morning for word on whether price increases and a renewed focus on advertising and emerging market expansion can heat up cooling soup sales.
Campbell Soup is expected to post a 7.3% jump in quarterly profit to $121.3 million, or 38 cents per share, compared with year-earlier earnings of $113 million, or 33 cents per share. Analysts expect revenue to have grown 3.9% to $1.58 billion from $1.52 billion.
Investors will also look for an update on 2012 guidance. In July, Campbell’s forecast adjusted earnings to fall in the fiscal year, with revenue flat to up 2%. Analysts, on average, are looking for the company to earn $756.4 million, or $2.37 per share, on revenue of $7.84 billion.
The maker of its namesake Campbell’s soups, as well as Pepperidge Farm cookies, V8 beverages, Goldfish snacks and Prego sauces has a new CEO at its helm, Denise Morrison, who took over from Douglas Conant on Aug. 1 after serving as COO. She has been with Campbell for the last eight years.
Morrison has indicated that Campbell’s moving to a sharper focus on advertising, rather than promotions and discounting of the company’s food products.
Campbell’s has actually raised prices on its food offerings, and consumers began seeing those higher prices on June 17, with the increases running around 4% to 6%, depending on the product and how much retailers passed on the higher costs they pay to shoppers. Morrison said retailers were “very supportive” of the price increases, but investors will be looking to see if higher prices in the grocery isle resulted in a dampening of consumer demand or bolstered revenue.
Price increases were implemented as Campbell’s, along with a roster of other food makers including well-established global rivals such as General Mills, H.J. Heinzand Sara Leehave faced rising commodity costs, pressuring the group’s margins. Campbell’s is vulnerable to commodity fluctuations for everything from beef, poultry and grains to produce, glass, paper and steel.