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Cans of Campbell’s soup are displayed on a supermarket shelf in San Rafael, California.
Campbell Soup reported better-than-expected quarterly profit Thursday while sales fell short of expectations and the company announced plans to shed two of its 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 4.3 percent in early morning trading.
“Fiscal 2018 was a challenging year for Campbell,” interim President and CEO Keith McLoughlin said in it 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.”
The company 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 nature of the food they are eating.
Meantime, cost pressures from rising shipping expenses and price-sensitive retailers are mounting.
The soup company last quarter lowered its expectations for this year’s organic adjusted earnings before interest and tax, anticipating a drop of 11 percent to 9 percent, greater than the 7 percent to 5 percent fall initially expected.
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 family member of the founder, to call for the sale.