Campbell Soup Q3 sales decreased 2 percent
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EBIT decreased 6 percent to $268 million.
Organic sales decreased 2 percent driven by lower volume and higher promotional spending, partly offset by higher selling prices.
Gross margin decreased from 35.9 percent to 35.3 percent. Excluding items impacting comparability, adjusted gross margin increased 0.4 points. The increase in adjusted gross margin was primarily driven by productivity improvements and higher selling prices, partially offset by higher supply chain costs and inflation, as well as higher promotional spending.
The increase in supply chain costs was primarily driven by higher carrot costs in the quarter due to the adverse impact of weather conditions on crop yields.
Marketing and selling expenses increased 7 percent to $228 million. Excluding items impacting comparability, adjusted marketing and selling expenses increased 5 percent to $219 million primarily due to higher advertising and consumer promotion expenses. Administrative expenses increased 8 percent to $154 million.
Excluding items impacting comparability, adjusted administrative expenses increased 4 percent to $132 million primarily due to higher incentive compensation costs, as well as inflation, an increase in costs to support long-term innovation and the acquisition of Garden Fresh Gourmet, partly offset by the benefits from cost savings initiatives.
EBIT decreased 6 percent to $268 million. Excluding items impacting comparability, adjusted EBIT decreased 5 percent to $312 million reflecting higher advertising and consumer promotion expenses, higher administrative expenses and lower volumes, partly offset by a higher gross margin percentage.
Net interest expense of $28 million was comparable to the prior year. The tax rate decreased 7.5 percentage points to 22.9 percent.
Excluding items impacting comparability, the adjusted tax rate decreased 3.1 percentage points to 28.5 percent primarily due to lower taxes on foreign earnings, partly offset by the geographic mix of earnings. ■