Campbell Soup Co. released a new strategic direction at a meeting with investors led by Chief Operating Officer Denise Morrison, who will become the company's president and chief executive officer on Aug. 1, 2011.
"During the past nine months, Campbell's new leadership team has worked closely with the board of directors on a comprehensive strategic review in which we have examined our business with fresh eyes, and charted a new course for our company," Morrison said in a prepared statement. "Our central mission and overarching priority is long-term value creation for our shareholders. We believe that the strategic transition we are announcing today will set the stage for a new chapter of profitable net sales growth and sustainable growth in total shareholder returns."
Campbell's new business strategy will focus on expansion of the company's category platforms in its three core categories of simple meals, baked snacks and healthy beverages; consumer-driven innovation in products and packaging as the primary driver of organic growth; and expansion of the company's international presence, particularly in emerging markets.
Details of the new strategy, and key elements of Campbell's plans for beginning to implement its strategic transition in the fiscal year that will commence on Aug. 1, will be reviewed at the investor meeting by Morrison and other members of the company's senior leadership team, including Sean Connolly, president, Campbell North America; Mark Alexander, president, Campbell International; Pat Callaghan, president, Pepperidge Farm; and Craig Owens, senior vice president and chief financial and administrative officer.
The In fiscal 2011, Campbell now expects net sales to be comparable to the prior year, a decline in adjusted earnings before interest and taxes (EBIT)of approximately 2 percent and an increase in adjusted earnings per share (EPS) of approximately 1 percent from the fiscal 2010 adjusted base of $2.47. This fiscal 2011 guidance excludes the impact of the recently announced restructuring program.
A detailed reconciliation of the fiscal 2010 adjusted financial information to the 2010 reported financial information is included at the end of this news release.
Morrison and Owens will also announce Campbell's guidance for fiscal 2012. The company expects net sales growth of between 0 to 2 percent, a decline in adjusted EBIT of between 8 to 6 percent and a decline in adjusted EPS of between 6 to 4 percent from the fiscal 2011 adjusted base.
"Implementing our new strategic direction will require substantial investment to fund our new innovation process, accelerate innovation across our portfolio and reinvigorate consumer-focused marketing to expand the equities of important brands," said Morrison. "Thus, fiscal 2012 will be a year of transition and investment, in which we will build the foundation for a sustainable, profitable growth trajectory in fiscal 2013 and beyond."
Over the longer term, Campbell expects to deliver annual sales growth between 3 and 4 percent, adjusted EBIT growth between 4 and 6 percent and growth in adjusted net EPS between 5 and 7 percent.
"When you look at Campbell a few years from now, you will see a company with a broader and stronger flywheel for growth," Morrison said. "We will be better balanced across our product portfolios and in our international footprint, better positioned to compete based on our impressive brand strengths, and better equipped to respond to the evolving needs of both our loyal consumer base and other important consumer groups. We are fully committed to this strategic transition, convinced that it is the right course for our shareholders and inspired by the opportunity to lead an exciting new era of growth at Campbell."