Campbell Soup Co. (NYSE: CPB) reported adjusted first-quarter fiscal year 2016 results before markets opened on Tuesday morning. The food producer reported adjusted earnings per share (EPS) of $0.95 on $2.2 billion in sales. In the same period a year ago, the food producer reported EPS of $0.78 on revenue of $2.26 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.76 and $2.21 billion in revenue.

The company revised its fiscal year 2016 guidance. Net sales are now expected to be flat to down 1% compared with a prior estimate of flat to up 1%. Adjusted EPS is now forecast to grow by 4% to 7%, up from prior guidance of up 3% to 5%. The adjusted EPS range has risen from $2.53 to $2.58 to a new range of $2.75 to $2.83. Consensus estimates called for EPS of $2.59 on revenues of $8.11 billion compared with prior year results of $2.46 EPS and $8.08 billion in sales.

Revised guidance is based on a change in the way Campbell will account for its defined benefit pension and postretirement plans. The company said the change will have no effect on cash flow. The new accounting method has been retroactively applied to previous periods and has resulted in recasted 2015 results for adjusted EBIT and adjusted EPS.

Quarterly GAAP diluted EPS came in at $0.62. That total excludes $0.26 per share of mark-to-market adjustments related to the new accounting method and $0.07 per share for restructuring charges.

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Sales guidance was negatively affected by a negative currency exchange impact of 3%, worse than the original estimate of a negative 2% impact related to currency exchange rates.

Adjusted gross margin for the quarter increased from a year-ago total of 35.3% to 37.9% which the company attributed to productivity improvements, higher selling prices, improved supply chain performance and lower promotional spending, partly offset by cost inflation.

The company’s president/CEO, Denise Morrison, said:

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. I am particularly pleased that we delivered a third consecutive quarter of adjusted gross margin expansion with improved execution in our supply chain. … We began fiscal 2016 after successfully implementing a number of changes to align our enterprise structure with our strategy. …  We have made clear and meaningful progress and commence the new fiscal year better positioned to execute against our strategic imperatives.

Shares traded up about 3.4% in pre-market trading at $51.50 in a 52-week range of $42.70 to $52.37. Thomson Reuters had a consensus analyst price target of $47.91 before today’s results were announced. The high price target was $51.00.

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