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.
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
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
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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