Campbell Soup (CPB)
Q1 2012 Earnings Call
November 22, 2011 10:00 am ET
Jennifer Driscoll - Vice President of Investor Relations
B. Craig Owens - Chief Administrative Officer, Chief Financial Officer and Senior Vice President
Anthony P. DiSilvestro - Senior Vice President of Finance and Principal Accounting Officer
Denise M. Morrison - Chief Executive Officer, President and Director
Jason English - Goldman Sachs Group Inc., Research Division
Andrew Lazar - Barclays Capital, Research Division
David Palmer - UBS Investment Bank, Research Division
Christopher Growe - Stifel, Nicolaus & Co., Inc., Research Division
Diane Geissler - Credit Agricole Securities (USA) Inc., Research Division
Eric Serotta - Wells Fargo Securities, LLC, Research Division
Robert Moskow - Crédit Suisse AG, Research Division
Robert Dickerson - Consumer Edge Research, LLC
Edward Aaron - RBC Capital Markets, LLC, Research Division
Bryan D. Spillane - BofA Merrill Lynch, Research Division
Alexis Borden - Citigroup Inc, Research Division
Eric R. Katzman - Deutsche Bank AG, Research Division
Previous Statements by CPB
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Thank you. Good morning, everyone. Welcome to Campbell Soup Co.'s first quarter earnings call and webcast. With me here today in New Jersey are Denise Morrison, our President and Chief Executive Officer; Craig Owens, Senior Vice President, Chief Financial Officer and Chief Administrative Officer; and Anthony DiSilvestro, Senior Vice President of Finance. Denise will kick us off by giving an update on our progress with our 3 growth strategies and commenting on our performance during the quarter. And Craig will offer a detailed discussion of the quarter, as well as our expectations for fiscal 2012. Following our formal remarks, all of us will take questions from the audience, and then at the end of the Q&A, Denise will come back to wrap it up.
As usual, we've created slides to accompany our presentation. You'll find the slides posted on our website this morning at investor.campbellsoupcompany.com. Starting this quarter, we'll be advancing the slides for you in order to enhance your experience. Please keep in mind that our call is open to members of the media who are participating in listen-only mode.
As a reminder, our presentation today includes certain forward-looking statements that reflect the company's current expectations about future plans and performance. These forward-looking statements rely on a number of assumptions and estimates, which could be inaccurate and which inherently are subject to risks. Please refer to Slide 2 in the presentation or to the company's most recent form 10-K and subsequent SEC filings for a list of the factors that could cause our actual results to vary materially from those anticipated in any forward-looking statements.
Since our presentation includes non-GAAP measures as defined by SEC rules, we've provided a reconciliation of the measures to the most directly comparable GAAP measures as an appendix to the slides accompanying the presentation. These slides, as well as our earnings release and selected quarterly financial data, can be found on our website. As a reminder, we revised our reporting segments in the fourth quarter of fiscal 2011. We separated the U.S. Soup, Sauces and Beverages segment into 2 segments, U.S. Simple Meals and U.S. Beverages. We provided historical quarterly information on our segments earlier this month in a Form 8-K.
And with that, let me turn the call over to Denise.
Denise M. Morrison
Thank you, Jennifer, and good morning, everyone. Thanks for joining us for Campbell's first quarter earnings conference call. As Jennifer indicated, I'll touch on our 3 growth strategies, followed by my perspective on our first quarter financial results and segment performance. Simply stated, our goal is to create value by driving sustainable, profitable net sales growth. To achieve that goal, we're pursuing 3 growth strategies: first, we'll stabilize then profitably grow North America Soup and Simple Meals; second, we'll expand our international presence; and third, we'll continue to drive growth in healthy beverages and baked snacks.
Across Campbell, the pace of activity has picked up, and we're putting all of our energy into improving our performance. Overall, we're confident in our growth strategies and are keenly focused on execution. We have the right people in the right positions, and we set up a streamlined scorecard with clear metrics so everyone knows what's expected of them and we can keep track of our progress. To be successful with our strategies, we must connect with consumers and keep their needs front and center.
This past quarter, as we began to implement our strategies, consumers continued to be impacted by the challenges in the global economy. In the United States and other markets where we compete, higher prices drove an increase in consumer spending on food, but the number of items purchased declined. Consumers continue to shift channels in their search for value. As a result, club, dollar and drug stores outperformed traditional grocery. This little doubt that the pronounced caution and restraints that have characterized consumer behavior since the onset of the financial crisis are now the new norm for the food and beverage sector, and we are proactively addressing it.
I'll now offer a brief perspective on our first quarter results, which were reported this morning. Sales declined 1%, and EBIT declined 6%. Earnings per share were steady with last year's first quarter. While our overall first quarter performance was in line with our expectations, the composition of our results was mixed. In particular, U.S. Simple Meals, Pepperidge Farm and North America Foodservice met or exceeded expectations, while U.S. Beverages and International did not.