Campbell Soup Co (NYSE; CPB) quarterly sales and profit missed analysts' estimates, hampered by higher promotions and weak demand for its condensed soups, broths and V8 vegetable juices, and the company warned that its full-year sales could decline.
Shares of the company, which also sells Pepperidge Farm snacks and Prego pasta sauce, fell $1.20, or 2.1%, to $55.75 in morning trade on Friday.
The Camden, New Jersey-based company, like other processed packaged food makers, has been vulnerable to changing consumer tastes toward fresher and healthier foods.
In response, Campbell Soup created its own fresh-food unit in 2015 to sell carrots, carrot ingredients, refrigerated beverages and salad dressings, but the business has been struggling.
A premature harvest that led to smaller carrots last year resulted in market share losses while a recall of protein shakes further added to its troubles.
Sales in the unit, which contributes 14% to total revenue, fell 6% in the third quarter ended April 30, hurt in part by manufacturing constraints related to the recall.
Overall sales swooned 1% to $1.853 billion driven by a 1% decline in organic sales, reflecting higher promotional spending, while volumes were comparable to the prior year. Organic sales declines in Americas Simple Meals and Beverages and Campbell Fresh were partly offset by gains in Global Biscuits and Snacks.
The company reported earnings of $0.58 per share in the quarter, reflecting pre-tax charges related to cost savings initiatives of $7 million, or $0.01 per share.
