A significant supply chain optimisation programme at Campbell Soup initiated last year contributed to a $63m restructuring charge in the second quarter, the company has claimed.
In fiscal 2011, the company announced a series of initiatives to improve supply chain efficiency and reduce overhead costs across the organisation to help fund plans to drive the growth of the business.
The company also announced its intent to close its Moscow office and exit the Russian market.
“In the fourth quarter of fiscal 2011, the company recorded pre-tax restructuring charges of $63m ($41m after tax or $.12 per share) related to these initiatives,” the company said in a statement.
Overall sales decreased 1% to $2.1bn over the period. Net earnings for the quarter ended 29 Jan, 2012, were $205m, compared with $239m in the prior year.
Excluding the restructuring charges, adjusted net earnings decreased 13% to $207m in the current quarter.
Denise Morrison, Campbell’s president and chief executive officer, said, the company was working to return to sustainable, profitable sales growth. “As we said last July, implementing our new strategic direction will require substantial investment to fund brand-building efforts and a step change in innovation, particularly in US Simple Meals.
“We are executing a strategic turnaround in an environment of weak volume and high inflation across the food industry. Our first half has been impacted by headwinds in our beverages and Australian businesses, but we continue to make progress against our key growth strategies.”
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