Net earnings attributable to Campbell Soup Company fell 30% to $194 million or $0.64 per share from the prior-year period. Adjusted EPS dropped 14% to $0.79.
Campbell Soup, which has been struggling with slowing soup sales, has been facing pressure from activist investors who want the company to either undergo a major restructuring or be put up for sale.
Following a strategic review, in August, the company announced its decision to sell its international and fresh foods businesses and use the amount to pay down debt. Campbell started the divestiture processes for its Campbell International and Campbell Fresh units, and is seeing interest from potential buyers.
Consolidated sales in the Meals and Beverages segment remained relatively unchanged from last year but organic sales dropped 5%, due mainly to declines in US soup and Prego pasta sauces. Excluding the effects from acquisitions and changes in revenue recognition, US soup sales fell 6%, driven by declines in ready-to-serve and condensed soups, mainly due to competitive pressure and increased promotional spending.
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In the Global Biscuits and Snacks segment, declines in Kelsen cookies in the US hurt organic sales, which dropped 1%. Sales of Goldfish crackers saw a slight increase despite negative impacts from the July product recall. Sales at Campbell Fresh were hurt by declines in refrigerated soup, Garden Fresh Gourmet and Bolthouse Farms refrigerated beverages.
In the first quarter, Campbell generated $45 million in savings under its multi-year cost savings program, including Snyder’s-Lance synergies, bringing total program-to-date savings to $500 million. The company expects to deliver cumulative annualized savings of $945 million by the end of fiscal 2022.
For fiscal-year 2019, on a pro forma basis, assuming divestitures, Campbell expects net sales of $7.9 billion to $8 billion and adjusted EPS of $2.40 to $2.50. The company expects net sales to come in a range of $9.9 billion to $10 billion and adjusted EPS to be $2.45 to $2.53, pre-divestitures.