Campbell Soup Company (CPB): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Despite a soft start in February due to unfavorable weather conditions, Campbell Soup managed to report better-than-expected bottom-line results for the third quarter of fiscal 2014, facilitated by its brand expansion and cost containment strategies. Campbell's focus on augmenting the North American soup and simple meal business and expanding overseas operations bode well for future growth. We believe that the company's prudent investment and strategic initiatives toward product innovation and brand building will increase its customer base and profitability. However, we prefer to be on the sidelines because of the rising commodity costs, intense competition and exposure to foreign currency fluctuations, which may undermine the company's operating performance. Therefore, we maintain our long-term Neutral recommendation on the stock.

Overview:

Based in Camden, NJ, Campbell Soup Company, together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products. The company was instituted as a business corporation on Nov 23, 1922 under the laws of New Jersey. Its brands are sold in approximately 120 countries, and its principal geographies include North America, France, Germany, Belgium, and Australia. The widely recognized brands of the company include Campbells, Pepperidge Farm, V8, Pace, Prego, Swanson, Arnotts, Kelsen, Kjeldsens and Plum Organics.

Campbell Soup reports its results of operations in 5 reportable segments:

U.S. Simple Meals (approximately 34% of third quarter fiscal 2014 sales came from this business) comprises the company's U.S. Soup and U.S. Sauces businesses. It includes condensed and ready-to-serve soups, Swanson broth and stocks, Swanson canned poultry, Pace Mexican sauces, Prego pasta sauces, Campbell's canned gravies, pasta and beans and Plum Organics food and snacks.

U.S. Beverages (approximately 10% of sales came from this business) includes V8 juices and beverages, and Campbells tomato juice.

Global Baking and Snacking (accounts for 29% of sales) includes Pepperidge Farm cookies, crackers, bakery and frozen products in the U.S. retail Arnotts biscuits in the Asia Pacific and Australia and Kelsen cookies globally.

International Simple Meals and Beverages (made up 9% of sales) consists of retail business in Canada while simple meals and beverages business in Asia Pacific, China and Latin America.

Bolthouse and Foodservice (contributed 18% to sales) includes the company's Bolthouse Farms carrot products, including fresh carrots, juice concentrate and fiber Bolthouse Farms super-premium refrigerated beverages and refrigerated salad dressings and the North America Foodservice business.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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