Campbell Soup Co Earnings Call Nuggets: Gross Margin Expansion and Europe
Campbell Soup Co (NYSE:CPB) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Gross Margin Expansion
Andrew Lazar – Barclays Capital: Craig, I am wondering, I guess, why for – both the fourth quarter and the full year even when you exclude the negative mix impact on gross margin from the addition of Bolthouse. Maybe why we haven’t seen more significant gross margin expansion just because some of the high margin businesses, obviously, did quite well over the course of this past year and into the fourth quarter meaning Simple Meals, Pepperidge Farm, and such. So, little more color on that would helpful?
B. Craig Owens – SVP, CFO and CAO: Certainly, the success of soup this year has been a positive influence on gross margin, a more negative influence would have been somewhat higher promotional spend for the year and it brings us back to about flat at gross margin, excluding the impact of ruling in the acquisition.
Andrew Lazar – Barclays Capital: Maybe thoughts on just how that might look as we think forward for the year coming into ’14 around gross margin?
B. Craig Owens – SVP, CFO and CAO: As we look at gross margin and I think maybe we said this at Analyst Day, we see slightly mitigated inflationary pressure and we continue to forecast pretty good results from our Enabler Program and productivity savings, those should largely be offsetting. We’ve got a price increase that we talked about in our condensed soup line. It will not have quite as much positive impact as last year’s increase because we have not moved up promotional price points. So you’ve got some positives and some negatives. I guess it would be slightly positive to gross profit as we – to gross margin as we look forward.