Campbell Soup on Wednesday missed quarterly sales estimates after a late Thanksgiving delayed soup shipments, and lowered its fiscal 2020 sales forecast to account for the sale of its European chips business.
As consumers grow increasingly health-conscious, Campbell has been trying to jumpstart its struggling canned soup business by rolling out products that contain fewer preservatives. The 150-year-old company, which makes Prego pasta sauce and Goldfish crackers, has been divesting some businesses so it can focus on core brands.
Grocers delayed stocking up on condensed soups and broths this year due to a late U.S. Thanksgiving, typically an important holiday for Campbell's soup sales. The meals and beverages unit, which makes soups and sauces, reported a first-quarter sales decline of 3% to $1.2 billion.
Campbell has suggested that 2% of sales in the meals and beverages business were moved into the second quarter, J.P.Morgan analyst Ken Goldman said. He called Campbell's overall results "lukewarm," saying the quarter didn't change Campbell's story either way.
Net sales fell about 1% to $2.18 billion in the quarter ended Oct. 27, missing the average analyst estimate of $2.19 billion, according to Refinitiv IBES data.
In October, the company sold its European chips business, which included UK-based Kettle Foods, to Valeo Foods for 66 million pounds. Campbell said it now expects 2020 net sales in the range of a 1% fall to a 1% gain, compared with its prior forecast of a 1% to 3% rise. Underlying organic sales expectations were unchanged, Campbell said.
Adjusted earnings from continuing operations were 78 cents per share, 7 cents above expectations, helped by a 2% decrease in selling and marketing costs.
The Camden, New Jersey-based company's shares, which have risen 44.2% this year, were up 2% in early trade.