Campbell Soup Company has reported that its full-year operating income fell 67% in a “challenging year”, as declining organic sales offset gains from the company’s recent acquisitions.
Falling sales across the company’s base business resulted in the company’s operating income falling to $469 million from the $1.4 billion figure recorded in the previous year, a drastic 67% decline.
Reported net sales increased 10% to $8.7 billion thanks to the acquisitions of Synder’s-Lance and Pacific Foods in the year, though this rise was tempered by a 3% organic decline in sales, driven largely by the disappointing performance of the company’s Americas Simple Meals and Beverages unit, which recorded a net sales decline of 4%.
Campbell’s has readjusted its business strategy in the wake of the results, as the company outlined its intention to offload its Campbell Fresh and Campbell International units in order to focus on its Campbell Snacks and Campbell Meals and Beverages divisions in North America.
US soup sales decreased 14% as fewer consumers purchased Campbell’s condensed soups, ready-to-serve soups and broths, and the overall operating earnings of the Americas Simple Meals and Beverages business fell 12% to $982 million over the year.
The operating earnings of Campbell’s Global Biscuits & Snacks division rose 17% to $540 million however, largely driven by the acquisition of Snyder’s-Lance, though organic sales across the division were comparable to the previous year.
Keith McLoughlin, Campbell’s interim president and CEO said: “Fiscal 2018 was a challenging year for Campbell.
“These results and our outlook for fiscal 2019 reinforce the need for the significant actions we announced this morning as part of our comprehensive, Board-led strategy and portfolio review.
“We believe these actions will put us on a path to create sustainable shareholder value.”
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