Canned soup and snack food specialist Campbell Soup (NYSE:CPB) has a well-earned reputation as a defensive name with solid returns on capital. What it does not have, though, is much growth or momentum in the core business. While the company has taken some positive steps to improve its business possibilities, the incoming CEO has her work cut out to convince Wall Street that this is a must-own name in the food sector.
Fiscal Q3 - Minimal Growth, But Solid Profitability
Campbell has been in a growth rut for a while and this quarter was no exception. Total reported revenue was up 1%, but revenue actually contracted about 1% on constant currency basis. Campbell's core business, U.S. soups, sauces and beverages, was down about 8% this quarter, with beverage sales down 9% (on a difficult comp) and soup sales down about 7%. Baking and snack food was a bright side, though, as sales rose 10% on strong performances from brands like Goldfish and Pepperidge Farm.
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