CAMDEN, NJ. — Strong sales of fresh Pepperidge Farm baked foods while the Goldfish business treaded water factored in a first quarter of nearly flat sales in the Snacks division at Campbell Soup Co. Sales of the company’s Late July snack brand surged 26% during the quarter, and in its Meals and Beverages division, soup sales jumped 21%.

Operating earnings from the Snacks division in the first quarter ended Nov. 1 totaled $139 million, up 11% from $125 million during the first quarter of fiscal 2020. Sales were $998 million, up 1% from $989 million. Adjusted for the sale of the company’s European chips business, Snacks organic sales rose 4%.

Fueling the improved profitability were lower selling expenses, reduced marketing overhead and higher sales volume gains. An offset was higher administrative expenses. Campbell Soup said gross margins did not improve from a year earlier because cuts in promotional spending were offset by net supply chain costs, boosted by cost inflation and COVID-19 related costs.

Accounting for the 4% growth in organic sales were cuts in promotional spending together with “healthy velocity on the majority of the base business, including volume gains in fresh bakery products, Late July snacks, Pop Secret popcorn, Pepperidge Farm cookies, Snack Factory Pretzel Crisps as well as Kettle Brand potato chips,” the company said.

Sales of Lance sandwich crackers were down during the quarter. With regard to Goldfish, family-sized packages sold well, but gains were offset by reductions in away-from-home consumption.

Campbell Soup net income in the first quarter was $309 million, equal to $1.02 per share on the common stock, up 86% from $166 million, or 56¢ per share, during the first quarter last year. Sales were $2.34 billion in the quarter, up 7% from $2.18 billion.

“Fiscal 2021 is off to a strong start with first-quarter sales growth across both divisions and double-digit gains in EBIT and EPS,” said Mark A. Clouse, president and chief executive officer. “Our Meals and Beverages division continued to drive impressive sales and margin growth as we positioned our brands to align with macro consumer trends, and retailers rebuilt inventory for the holidays and the heart of soup season. Snacks continued to deliver strong results while increasing capacity in key power brands. We continue to build a high-performing Snacks business with differentiated brands and improving margins.”

In Dec. 9 trading on the New York Stock Exchange, Campbell Soup shares were trading down about 2.4% at mid-day, at $47.08, off $1.17 per share.

In a conference call with investment analysts early the morning of Dec. 9, Mr. Clouse said Late July was a standout performer in the snacks business with sales up 26% and with market share up 2 percentage points.

“We continued to run the brand’s first national ad campaign throughout the quarter,” Mr. Clouse said. “Late July is a great example of how our power brands are helping consumers make the most of their snacking moments. We take a mainstream segment like tortilla chips and offer a product with higher quality, including organic product credentials, highly relevant innovation and world-class marketing to better engage consumers, allowing them to trade up into a better snacking experience. We have successfully applied this model to other brands as well, such as Kettle brand chips and Snack Factory Pretzel Crisps, which also had double-digit dollar consumption growth in the quarter.”

Mr. Clouse said the company continues to face supply constraints in cookies, exacerbated by labor challenges related to COVID-19.

The Campbell Soup Meals and Beverages division generated more robust growth during the first quarter than the Snacks business.

Operating income of Meals, which includes the company’s soup, sauce, baby food, beverage and other businesses, was $333 million, up 18% from $282 million in the first quarter a year earlier. Sales were $1,342 million, up 12% from $1,194 million.

The division’s sales gains represented strong performance for its US retail products, including gains in US soup, Prego pasta sauce, V8 beverages, Campbell’s pasta sauce and Pace Mexican products, as well as gains in Canada. Foodservice declines represented a partial offset.

“Volume was favorable in US retail and Canada, driven by increased demand of food purchases for at-home consumption, offset partly by the negative impact on foodservice as a result of shifts in consumer behavior and continued COVID-19 related restrictions,” the company said. “Sales of US soup increased 21% due to retailers rebuilding inventory for the upcoming soup season, in-market gains in condensed soups and broth and moderated promotional activity.”

Mr. Clouse focused on the soup growth during the conference call.

“Our condensed soups were the highlight of the quarter, with double-digit net sales growth gains in share led by cooking SKUs and 4 million new households purchasing this quarter versus prior year. We continue to bring new ideas and recipes to consumers who are cooking more frequently at home. As these first-time cooks gain more confidence, we believe they will likely continue to use these skills to prepare more meals at home well beyond the pandemic. Our recipe solutions continue to resonate with consumers as we saw a 20% increase in overall recipe-related page views in the first quarter compared to the prior year. Within ready-to-serve, we saw solid consumption growth, but supply pressure and our decision to moderate promotions, as previously mentioned, resulted in some short-term share loss. However, as supply has improved, we are seeing improved trends, supported by our Chunky NFL sponsorship activation, our slow Kettle Crunch innovation and our Well Yes! relaunch. We expect all these factors to have a very positive impact in the second quarter.”

E-commerce sales of Campbell Soup products jumped 85% during the quarter, versus a year earlier, Mr. Clouse said. Increasing popularity of click-and-collect for grocery shopping was a major driver and is likely to continue rapidly growing, he said.

Campbell Soup’s board of directors approved an increase in its quarterly dividend to 37¢ per share, up 6% from its previous payout rate of 35¢. The dividend is payable Feb. 1 to shareholders of record Jan. 9.