Campbell is selling its fresh food and international snacks division, to focus on revitalizing its original core soup and domestic snack business, a decision made after a three-month review this past summer.
In the aftermath of a string of poor quarterly results, Campbell has been working on a turnaround for its business, however, it finds itself locked in a proxy fight with the firm, Third Point, which wants five new directors to be on Campbell’s board.
“We continue to expect fiscal 2019 to be a transition year as we fully operationalize our plans to turn around Campbell,” said interim CEO Keith McLoughlin.
He said they are seeing improvements in sales growth and solid performances in three areas of their US business: their soups, V-8 drinks, and snack business, which include Syder’s pretzels and Goldfish crackers.
Analysts were expecting 70 cent earnings per share, but Campbell reported 79 cents adjusted, as well as net revenue rising at $2.69 billion versus the expected $2.67 billion.
However, there are challenges ahead for the company.
Declines in its US soup, Prego pasta sauce and its Canadian business are key factors that drove the lowering of sales at its meals and beverage unit by 5 percent after stripping out the impact of currency and acquisitions.
The drop in sales by 1 percent to $232 million was led by Campbell’s fresh food business: its refrigerated soup, Garden Fresh Gourmet salsa and Bolthouse Farms smoothies. As reported Campbell plans to sell this division.
Campbell is hoping to expedite the sale of its Garden Fresh business by putting it up for shop according to CNBC.
The company said that the operating loss of their fresh food business posted an improvement with a loss of $3 million, half of last years loss of $6 million while there were signs of progress for its Bolthouse Farm carrot business.
Reaffirming its expectations for 2019, and without taking into account its planned sales, Campbell is expecting adjusted earnings to be in a range of $2.45 to $2.53 per share. With the assumption of the divestitures, it looks to a range of $2.40 to $2.50 a share.