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Campbell Soup (CPB) Stock Sinks, Takes Others (GIS, K) Down With
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Shares of Campbell Soup (CPB - Free Report) got canned on Thursday after the company reported both fourth quarter and full-year sales declines. Campbell’s poor performance also helped send the rest of the packaged food industry lower, nearly across the board.
Campbell’s fourth-quarter revenues fell by 1% from the year-ago period to $1.664 billion, missing the Zacks Consensus Estimate of $1.689 billion. The company also failed to meet our earnings estimates, posting earnings of $0.52 a share against the Zacks Consensus Estimate of $0.55.
The canned soup giant’s full-year sales dipped by 1% to $7.890 billion, based mostly on an overall drop in organic sales due to lower volume and greater promotional spending. Campbell’s now projects that full-year revenues could fall by as much as 2% next year.
“The operating environment for the packaged foods industry remains challenging due to shifting demographics, changing consumer preferences for food, the adoption of new shopping behaviors and the dynamic retailer landscape,” Campbell’s President and CEO Denise Morrison said in a statement. “In these times, sales growth remains a challenge.”
The CEO noted that drastically changing consumer shopping trends have greatly impacted the company’s non-refrigerated canned and bottled goods sales, which are now seemingly outdated. Morrison also pointed to the rise of self-cooking delivery companies, such as Blue Apron (APRN), as well as an increase of private label brands, as major reasons for Campbell’s poor sales.
Campbell’s biggest business sector, its soup and juice division, saw its sales sink 3% in its fourth-quarter. Sales of its packaged snack segment, including Pepperidge Farm and Goldfish, were flat. On the bright side, Campbell’s Bolthouse Farms fresh food sector experienced a 1% gain.
Still, Thursday’s report marked Campbell’s 11th straight quarterof falling sales. Campbell’s stock tanked by over 7% and touched a new two-year intraday trading low of $46.43 a share.
Packaged Food Industry
Campbell’s rough day helped send the rest of the packaged food industry down overall, as the soup maker’s predicament is hardly unique. With companies such as Amazon (AMZN - Free Report) , Wal-Mart (WMT - Free Report) , and Costco (COST - Free Report) growing larger, brands hold less and less leverage in price negotiations.
“Right now, the retailers, they’re doing better in this round of the fight,” Warren Buffett said in a recent interview with CNBC.
Buffett, an investor and Kraft Heinz (KHC - Free Report) board member, saw shares of the packaged food powerhouse fall 1.72% on Thursday. Mondelez International (MDLZ - Free Report) stock dropped by 2.03%, while shares of Conagra Brands (CAG - Free Report) dipped 0.82%.
Shares of General Mills (GIS - Free Report) and Kellogg Company (K - Free Report) both sunk to new 52-week intraday lows. B&G Foods Inc. (BGS - Free Report) also hit a new 52-week low, while Hormel Foods (HRL - Free Report) and Pinnacle Foods both saw their stock prices dip marginally.
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Campbell Soup (CPB) Stock Sinks, Takes Others (GIS, K) Down With
Shares of Campbell Soup (CPB - Free Report) got canned on Thursday after the company reported both fourth quarter and full-year sales declines. Campbell’s poor performance also helped send the rest of the packaged food industry lower, nearly across the board.
Campbell’s fourth-quarter revenues fell by 1% from the year-ago period to $1.664 billion, missing the Zacks Consensus Estimate of $1.689 billion. The company also failed to meet our earnings estimates, posting earnings of $0.52 a share against the Zacks Consensus Estimate of $0.55.
The canned soup giant’s full-year sales dipped by 1% to $7.890 billion, based mostly on an overall drop in organic sales due to lower volume and greater promotional spending. Campbell’s now projects that full-year revenues could fall by as much as 2% next year.
“The operating environment for the packaged foods industry remains challenging due to shifting demographics, changing consumer preferences for food, the adoption of new shopping behaviors and the dynamic retailer landscape,” Campbell’s President and CEO Denise Morrison said in a statement. “In these times, sales growth remains a challenge.”
The CEO noted that drastically changing consumer shopping trends have greatly impacted the company’s non-refrigerated canned and bottled goods sales, which are now seemingly outdated. Morrison also pointed to the rise of self-cooking delivery companies, such as Blue Apron (APRN), as well as an increase of private label brands, as major reasons for Campbell’s poor sales.
Campbell’s biggest business sector, its soup and juice division, saw its sales sink 3% in its fourth-quarter. Sales of its packaged snack segment, including Pepperidge Farm and Goldfish, were flat. On the bright side, Campbell’s Bolthouse Farms fresh food sector experienced a 1% gain.
Still, Thursday’s report marked Campbell’s 11th straight quarterof falling sales. Campbell’s stock tanked by over 7% and touched a new two-year intraday trading low of $46.43 a share.
Packaged Food Industry
Campbell’s rough day helped send the rest of the packaged food industry down overall, as the soup maker’s predicament is hardly unique. With companies such as Amazon (AMZN - Free Report) , Wal-Mart (WMT - Free Report) , and Costco (COST - Free Report) growing larger, brands hold less and less leverage in price negotiations.
“Right now, the retailers, they’re doing better in this round of the fight,” Warren Buffett said in a recent interview with CNBC.
Buffett, an investor and Kraft Heinz (KHC - Free Report) board member, saw shares of the packaged food powerhouse fall 1.72% on Thursday. Mondelez International (MDLZ - Free Report) stock dropped by 2.03%, while shares of Conagra Brands (CAG - Free Report) dipped 0.82%.
Shares of General Mills (GIS - Free Report) and Kellogg Company (K - Free Report) both sunk to new 52-week intraday lows. B&G Foods Inc. (BGS - Free Report) also hit a new 52-week low, while Hormel Foods (HRL - Free Report) and Pinnacle Foods both saw their stock prices dip marginally.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today. Learn more >>