Investing.com -- Shares in Campbell Soup Company (N:CPB) jumped by more than 3% on Tuesday, after the New Jersey-based soup producer raised its forward guidance for Fiscal Year 2016 in spite of decreased earnings over its first quarter.
For the company's first quarter, which ended on November 1, Campbell's revenues fell 2.3% to $2.2 billion, amid the effects of a stronger dollar. The impacts of an appreciating dollar tamped down on Campbell's foreign sales in a wide range of segments throughout the company. Foreign currency translation created a negative eight point impact on Global Biscuits and Snacks sales and a negative 2% impact on its Americas Simple Meals and Beverages division, contributing to an overall negative 3% effect on total sales.
As a result, Campbell's reported quarterly earnings of $194 million or 0.62 per share, down from net profits of $248 million or 0.78 during the same quarter in Fiscal Year 2015. When certain items were excluded, Campbell's reported per share earnings of 0.95 from its continuing operations, above analysts' expectations of 0.76.
“We’re encouraged by our first-quarter performance. While organic sales for the quarter were comparable to a solid prior year, we recognize that we have more work ahead to improve our growth trajectory," Campbell's President and CEO Denise Morrison said in a statement. "I am particularly pleased that we delivered a third consecutive quarter of adjusted gross margin expansion with improved execution in our supply chain."
"We drove strong adjusted EBIT and EPS performance across the company. Given an improved margin outlook for the year, we raised guidance for adjusted EBIT and EPS, while we lowered sales guidance to reflect increased currency headwinds."
In addition, the company's gross margin decreased from 35.3% to 34.3%, even as its adjusted gross margin improved 2.6% for the quarter, amid higher selling prices and improved supply chain results. Marketing and selling expenses also fell 7% to $226 million from the impacts of a stronger dollar.
Moving forward, Campbell's increased its forward guidance for the year from 2.53 to 2.58 per share to 2.75 to 2.83. The company still expects the impact from foreign currency translation to have a negative 3 point effect in 2016.
"We began fiscal 2016 after successfully implementing a number of changes to align our enterprise structure with our strategy. Most significant among those changes were the formation of three new divisions with clear portfolio roles and the roll-out of a major cost savings initiative that included streamlining our organization, the launch of an Integrated Global Services organization and initiating zero-based budgeting," Morrison added. "We have made clear and meaningful progress and commence the new fiscal year better positioned to execute against our strategic imperatives."
Shares in Campbell's Soup gained 1.54 or 3.09% to close at 51.33.