Campbell Soup on Thursday reported better-than-expected quarterly profit, but sales fell short of expectations. The company also announced plans to shed two international units and its fresh foods business.
Here’s what the company reported versus what Wall Street expected, based on average estimates of analysts polled by Thomson Reuters.
- Adjusted earnings per share of 25 cents, versus 24 cents expected.
- Revenue of $2.22 billion, versus $2.24 billion expected.
The company’s shares slid as much as 5 percent in premarket trading.
“Fiscal 2018 was a challenging year for Campbell,” interim CEO Keith McLoughlin said in the earnings release. “These results and our outlook for fiscal 2019 reinforce the need for the significant actions we announced this morning as part of our comprehensive, Board-led strategy and portfolio review. We believe these actions will put us on a path to create sustainable shareholder value.”
McLoughlin stepped in after the company released what executives called “unacceptable” earnings in May and announced the departure of then-CEO Denise Morrison. The company is unwinding her efforts to branch into healthier and more fresh foods to refocus on the product lines it knows well — snacks, meals and beverages.
Campbell continues to face slowing — and in some segments declining — sales. Its businesses like soup, V8 juices and SpaghettiOs remain out of sync with how today’s young consumers eat. Older consumers, too, are increasingly paying attention to the food they are eating.
In addition, cost pressures from rising shipping expenses and price-sensitive retailers are mounting.
The soup company last quarter lowered its expectations for this year’s adjusted earnings before interest and tax, anticipating a drop of 9 percent to 11 percent. Previously, it predicted a 5 percent to 7 percent fall.
The company’s weak financial position has drawn attention from activist investors who are pressuring the 149-year-old soup maker to sell. Dan Loeb’s Third Point, which recently disclosed a 5.65 percent stake in the company and called a sale of the business the “only justifiable outcome” of its review. The activist is teaming up with shareholder George Strawbridge Jr., a member of Campbell’s founding family, to call for the sale.