Campbell Soup recorded a 24.5% increase in second-quarter net sales, as the company benefitted from the acquisitions of Snyder’s-Lance and Pacific Foods.
For the three months to 27 January 2019, the company posted net sales of $2.71 billion, while organic sales were flat.
However, the firm recorded a net loss of $59 million, largely attributable to $346 million of impairment charges on its Campbell Fresh business, which the company plans to sell.
Indeed, yesterday Campbell’s entered into an agreement to offload Garden Fresh Gourmet – a salsa and hummus brand that forms is part of the fresh division.
Campbell Soup CEO Mark Clouse.
Mark Clouse, who was appointed Campbell’s CEO in December, said: “I am pleased that, for the second consecutive quarter, we delivered sales and earnings performance in line with our expectations, enabling us to reaffirm our full-year guidance for fiscal 2019.
“During the quarter, we continued to make progress against key strategic initiatives. Our efforts to stabilise our core business, integrate Snyder’s-Lance, deliver our cost savings agenda and focus and optimise the portfolio are all on track.
“Over time, these actions will enable us to increase investments in our core businesses while significantly reducing debt and creating meaningful value for shareholders. While we have made steady progress, there is much more work to be done to fully unlock the potential of our business.
“Since joining the team and immersing myself in Campbell’s business, I am confident in the plans in place to address our near-in challenges and opportunities, with the commitment to set a clear strategic roadmap for the future.”
Campbell’s Global Biscuits and Snacks unit has now grown to become its largest division after recording a 76% increase in sales in the quarter to $1.24 billion, in part thanks to the $4.87 billion purchase of Snyder’s-Lance. Excluding the benefit of the acquisition and the negative impact of currency translation, organic sales in the unit increased 3%.
In the Meals and Beverages business, sales in the quarter increased 1% to $1.23 billion. However, organic sales decreased 1%, as the positive performance of its V8 drinks line was offset by declines in Plum and Prego.
After coming under increasing pressure from activist investor Third Point last year, Campbell’s started a portfolio review, in a move to increase its focus, significantly reduce debt and strengthen its balance sheet.
As well as selling Campbell Fresh, the New Jersey-headquartered company is also looking to offload Campbell International, and expects to name a buyer by the end of July this year.
© FoodBev Media Ltd 2020