Campbell Repositions Line as Profit Dips

Campbell Soup Co. said Thursday that its third-quarter profit was off 6% and that it is pulling from national distribution its new line of French Chef refrigerated soups and salads, which had been selling poorly.

“It’s a good move,” said food stock analyst Leonard Teitelbaum with Merrill Lynch Research. “Campbell has shown the ability to cut and run on products that just didn’t make it.”

Campbell, the 118-year-old company that dominates the U.S. canned soup market, has in recent years expanded its offerings to include Le Menu frozen dinners, Croissant Pastry Pizzas and other new foods.

Although some lines, including Juice Works fruit juice and Star Wars cookies, have flopped, Campbell is unlikely to change its strategy of experimenting with new products and reformulating old ones to boost sales.

Third-quarter earnings fell 6% to $48.1 million, the company said. For the nine months ended May 3, earnings inched up 1% to $177.2 million. However, the company said the comparisons were distorted by adjustments this year in advertising expenses. Without the adjustment, nine-month profits would have climbed nearly 10%.

The company’s Pepperidge Farm bakery and Vlasic pickle units contributed heavily to sales, which climbed 5% to $1.13 billion in the third quarter. The French Chef products will be placed under the Mrs. Giles Country Kitchen unit for repositioning, Campbell said.