Shares of Campbell Soup (NYSE:CPB) were trading 1.88% higher this afternoon after the company delivered better than expected results for its third quarter of fiscal 2015.
Net income was US$182 million, or 58 cents per share, on revenues of US$1.9 billion, 4% lower than a year ago. Adjusted earnings came in at 62 cents beating the analysts’ consensus of 51 cents.
The Packaged foods maker, best known for its soups as well as the Pepperidge Farms brand and Goldfish crackers, achieved these results by cutting spending on promotions and other expenses and by charging more for its products.
The lower revenue reflects the fact that like many other packaged food companies, Campbell has not been growing because of consumers choosing healthier and healthier foods. Cost cutting is the most effective way to maintain profitability:
“In addition to our productivity improvements and moderating inflation, we achieved net price realization by reducing promotional spending and taking pricing actions on the core businesses,” said Campbell’s CEO Denise Morrison said in a statement.
Indeed, in February, the company said it would be cutting some US$200 million annually over the next three years, reorganizing its business units according to product category as well as encouraging early retirement packages to employees.
Sales of the ‘signature’ soup products, veritable American cultural icons as popularized by Andy Warhol’s art, remained stable but the simple meals business division of which they form a part, fell 6 percent.
Morrison said that actual soup consumption was stable.