Campbell Soup Misses Estimates For Fourth Quarter
Campbell Soup Co. (NYSE:CPB) reported a smaller-than-expected quarterly adjusted profit for its fiscal fourth quarter. The net loss attributable to Campbell Soup was $81 million in the quarter. The company earned $17 million a year earlier. On an adjusted basis, Campbell Soup earned 46 cents per share. This was lower than analysts’ average estimate of 50 cents, according to Thomson Reuters I/B/E/S. Net sales fell 0.35 percent to $1.69 billion, but was in line with analysts’ estimates.
For the company’s flagship soup and sauces unit, sales were flat in the quarter ended July 31. A decline in ready-to-serve soups was partially offset by sales of Swanson broth and gains in Prego offset declines in V8 juices and soups. The global biscuits and snacks business saw a 2 percent sales increase.
Its Campbell Fresh business saw its operating profit plunge 62 percent in the quarter. Sales in the division fell 5 percent. The unit now accounts for 13 percent of the company’s total sales. Several senior managers, including the president of the Bolthouse Farms unit, have left in the past several weeks in a reshuffle of management at the division.
A product recall hampered results for the quarter. In June, Campbell Fresh had a recall of Bolthouse protein drinks. The 3.8 million recalled drinks had possibly spoiled due to problems in its manufacturing equipment and process. Higher costs and lower sales of carrots also hampered results. Campbell Soup said it harvested carrots prematurely in spring, smaller carrots, dissatisfied customers, and loss of business. The company took a $141 million pre-tax impairment charge related to Bolthouse in the quarter.
Campbell Fresh was launched to capitalize on the healthy eating trend. Campbell bought the Bolthouse Farms brand in 2012 and Garden Fresh Gourmet last year to add them to the unit. Campbell Soup said it was improving oversight of the entire Campbell Fresh supply chain. Chief Executive Denise Morrison said in a statement that it would take time for Campbell Fresh to regain the lost business.
The world’s largest soupmaker also revised its full-year adjusted earnings forecast. The company forecast adjusted earnings of $3.00-$3.09 per share for the year ending July, below analysts’ estimates of $3.14. The forecast fell short of analysts’ estimates, sending its shares tumbling. The company’s shares dropped more than 5 percent in morning trading.