Campbell Soup’s co-chief executive Denise Morrison has quit unexpectedly after the company reported a US$393 million loss for the third quarter.
Morrison will depart the business after seven years steering the ship, and although no specific reason was provided for her departure chief financial officer Anthony DiSilvestro said an urgent review of the company’s portfolio would be started.
While changing consumer tastes away from processed food have been partly blamed for four years of declines in Campbell’s US soup business, it was Campbell’s fresh food unit that disappointed the market, booking a $619 million impairment.
The review will open the possibility to the veteran FMCG business carving up its portfolio, with DiSilvestro telling investors last Friday that there are no “sacred cows”. Campbell’s downgraded its fiscal 18 earnings guidance last Friday, warning of the impact US President Donald Trump’s steel tariffs has had on its cost base.
“We are not satisfied with our financial results. Our performance has been impacted by both execution-related and external challenges,” DiSilvestro said in a statement on the third quarter figures. “We are addressing these challenges with renewed urgency. Looking ahead, we will be reviewing all aspects of our strategic plans and portfolio composition.
We anticipate that our review, which will take several months to complete, will lead to changes designed to improve our operating performance and create long-term shareholder value.
“We plan to discuss the outcome of this review when we report fourth-quarter and full-year results in late August,” he continued.
Campbell said it expected adjusted earnings for the full year to be down between eight and six per cent on the prior year to US$1.4 billion. Company wide net sales increased by 15 per cent to US$2.1 billion for the three months ended 29 April, while adjusted earnings (not including the fresh impairment) were up one per cent to $308 million.
Arnott’s unit up
While the US-segment of the business disappointed on a variety of fronts, Campbell’s global biscuits and snacks unit, which includes Arnott’s and shelf-stable beverages in Australia, saw sales increase by 35 per cent to $862 million. Segment earnings increased by 23 per cent to $123 million, driven by the $72 million Snyder’s-Lance acquisition.
