CAMDEN, N.J. — Campbell Soup Co.’s soup business played a prominent role in the company’s performance during the first quarter of fiscal 2020. On the positive side, the company grew its soup market share for the first time in 10 quarters. To the negative, the timing of US soup shipments related to the later Thanksgiving holiday pressured quarterly sales and the company’s overall performance.

Organic sales for the quarter ended Oct. 27 fell 1 percent. While Snacks business unit sales increased 2 percent during the quarter it was offset by a 3 percent decline in the company’s Meals and Beverage unit, which includes the soup business. Mark A. Clouse, president and CEO, said Dec. 4 in a conference call with financial analysts that the late holiday created a headwind in the first quarter, but that he expects that to balance in the second quarter.

“What I’m most encouraged by is our in-market performance, where we are building momentum across both divisions,” he said. “In fact, in measured channels, our total company in-market consumption grew more than 1 percent. Our brands grew or held share in categories representing more than 80 percent of our total business, and finally, in 10 of our stated 13 priority categories. This was led by gains in soup share for the first time in nearly three years.”

The company is taking a variety of steps to reinvigorate its soup business, including investing more marketing dollars in both the condensed and ready-to-serve formats.

“We started our advertising earlier, a month sooner this fiscal year, and while it’s early days, the response to our initial investments is encouraging,” Clouse said. “For example, our new tomato soup advertising went on air Sept. 30, and we saw positive lifts immediately. Through the start of the second quarter, we’ve improved on those lifts, which are now up 7 percent. We have also increased our promotional frequency across the portfolio, which is a product of our improving retailer relationships and select high ROI investments.”

Looking ahead to the second quarter, Clouse said he expects net soup business sales will continue to improve. Driving the sales improvement is reengagement with lapsed users.

“I think the other thing that is really helping us at the consumer level is this idea of new consumers entering into cooking,” Clouse said. “So, there’s been a lot of discussion around millennials over the years. And the reality is that as millennials age we are finding them participating more and more in in-home preparation. We call it quick scratch cooking, which is essentially assembling several components to make a meal. And of course, our broth business, both Swanson and Pacific, as well as our condensed cooking soups, like cream of mushroom and cream of chicken, are very, very easy, convenient.”

Finally, he said Campbell Soup’s new line of sipping soups is performing well. The new format extends the soup business’ reach into snacking.

“As the year unfolds, we’ll be rolling out the bone broth, which is a big protein nutritional play, which we know is very relevant, along with some continued expansion of different flavors,” Clouse said.

Campbell Soup net income during the first quarter was $166 million, equal to $0.55 per share on the common stock, a decline when compared with the same period of the previous year when the company earned $194 million, or $0.64 per share.

Sales for the quarter dipped to $2,183 million from $2,202 million the year prior.

“2020 will be a year of stabilization for the company as we invest in the business, optimize the portfolio and fully implement our new operating model, including further integrating our Snacks division,” Clouse said.

Meals and Beverages business unit sales were $1,194 million during the quarter. Beyond soup, Clouse said Campbell Soup’s Prego sauce brand had strong momentum during the quarter. But the V8 brand remained challenged as the company reshapes the product portfolio around a plant-based positioning.

Snack business sales were $989 million during the quarter.

“The Snacks business is maintaining momentum behind our proven growth model, which we are now deploying across the full portfolio,” Clouse said. “Marketing investments are up significantly across our nine power brands with select trade investments to maintain price gaps. These investments continued to pay off. Total Snacks consumption grew nearly 4 percent in measured channels, while our power brands grew 6 percent. We are seeing nearly 2x the consumption growth on our power brands versus the rest of the Snacks portfolio, as we focus the portfolio and invest behind these differentiated brands that are truly driving the business.”

Integrating acquired businesses and paying down debt have been points of focus for management. With both endeavors well underway, Clouse signaled future acquisitions are a consideration.

“I think it's right to have the conversation on would we look at other tuck-in M&A that might fill in some holes within our portfolio or be valued combinations with some of the businesses we have today,” he said. “I would not expect us to be heading into transformational and bigger M&A. I just don’t think that’s where we are right now in the journey, but I could imagine that as we get into a reasonable debt level that we might look at some smaller contributions.”