Soup results were worse than feared for the Campbell Soup Co. in the first quarter ended Oct. 29. U.S. Retail soup sales were down 9% when compared to the first quarter of the previous year.

“This first quarter was weaker than we expected, particularly for our U.S. Soup business,” said Denise M. Morrison, president and chief executive officer, in a Nov. 21 earnings call.

Companywide, net earnings of $275 million, or 91c per share on the common stock, were down 6% from $292 million, or 95c per share on the common stock, in the first quarter of the previous year. Sales decreased 2% to $2,161 million from $2,202 million in the previous year’s first quarter.

Camden-based Campbell Soup gave a new fiscal-year earnings outlook on Nov. 21. The company now expects adjusted EBIT to decrease between 2% and 4% and earnings per share to decrease between 1% and 3%. The previous earnings outlook expected adjusted EBIT to range between a decrease of 1% to an increase of 1% and e.p.s. to range between flat to an increase of 2%. Campbell continues to expect fiscal-year sales to range between a decline of 2% to flat.

On the New York Stock Exchange, Campbell shares closed at $45.84 per share on Nov. 21, which compared to a closing price of $49.93 per share on Nov.20.

The first-quarter drop in U.S. soup sales was driven by declines in condensed soup, broth and ready-to-serve soup, reflecting a seven-point decrease due to a lower seasonal inventory build compared to a year ago. Campbell has been unable to reach an agreement with a key customer on a promotional approach for soup in fiscal 2018.

“This had a larger impact on sales than originally anticipated primarily due to a lower seasonal inventory build compared to a year ago,” Ms. Morrison said. “The dialogue with this key customer remains open, and I'm very optimistic that we will reach a positive resolution.”

Competition from private label brands affected broth sales negatively. Advertising from Campbell will seek to show how the company’s Swanson brand differs from other broth brands. The first ingredient in Swanson is chicken stock, for example, while the first ingredient in most private label is water, Ms. Morrison said.

“So we’re calling attention to some of the attributes that distinguish the Swanson brand from private label,” she said.

Such advertising will apply across the soup portfolio.

“We've started to shift our soup marketing spending from equity-building campaigns to a sharper focus on product attributes that differentiate Campbell brands,” Ms. Morrison said. “We're increasing in-store presence with stronger messaging, and we're aggressively ramping up our e-commerce plans.”

Campbell Soup on Sept. 27 delayed the closing of an acquisition of Pacific Foods of Oregon, which produces organic broth, soup, shelf-stable plant-based beverages, meals and side dishes. The delay came after a former shareholder of Pacific Foods filed a lawsuit against Pacific Foods. Campbell Soup was not named in the lawsuit.

“While the timing is not yet definite, we have reason to believe that conditions will be met that will allow us to complete the transaction by the end of 2017,” Ms. Morrison said Nov. 21.

U.S. retail soup is part of the company’s Americas Simple Meals and Beverages division, which had net sales of $1,218 million, a decrease of 5% from $1,278 million in the previous year’s first quarter. Segment operating earnings decreased 14% to $328 million.

Within Global Biscuits and Snacks, net sales increased 3% to $709 million from $690 million in the previous year’s first quarter. Gains in Pepperidge Farm snacks reflected growth in Goldfish crackers and Pepperidge Farm cookies. Segment operating earnings increased 4% to $120 million.

Within Campbell Fresh, net sales of $234 million matched the sales figure of the previous year’s first quarter. Unfavorable weather impacted carrot sales negatively. Sales gains in carrot ingredients, Garden Fresh Gourmet and Bolthouse Farms salad dressings were offset by the decline in carrots. The segment suffered an operating loss of $6 million, which compared to operating earnings of $1 million in the previous year’s first quarter. The loss reflected a lower gross margin percentage driven primarily by higher carrot costs.

Companywide, Campbell reported progress in a cost-savings program and e-commerce.

“On a positive note, we continue to make progress against our cost-savings target of $450 million by the end of fiscal 2020, delivering another $20 million of savings in the quarter,” said Anthony P. DiSilvestro, senior vice-president and chief financial officer. “This brings the program to date total to $345 million.”

In e-commerce, Campbell is working with “e-tailers” as well as with Chef’d on meal kits, Ms. Morrison said.

“While I'm not satisfied with our results this quarter, I'm also not deterred,” she said of the first quarter overall. “Despite challenges within U.S. Soup, V8 and carrots, other parts of the business are growing. The Global Biscuits and Snacks division remained a bright spot, especially Pepperidge Farm. Simple Meals, Canada and Foodservice performed well, and the Campbell Fresh turnaround is progressing.

“We're taking the appropriate steps to address our immediate issues and remain focused on the actions that will position Campbell for long-term growth. We will continue to invest to differentiate our brands, enhance our real food credentials, drive innovation, particularly in health and well-being and snacking, build our e-commerce organization and pursue smart external development.”