CAMDEN, N.J. (AP) - Campbell Soup Co. plans to focus on its core snacks and soup business in North America and sell its international business and pay down debt.
The moves announced Thursday follow a review it began in May, when Campbell also announced the retirement of then-CEO Denise Morrison, as it faces changing food trends and potentially costly tariffs on aluminum and steel.
Interim CEO Keith McLoughlin also said the board is still open to evaluating other strategic options for the company.
The planned sales will leave Campbell Soup with brands like Pepperidge Farm and Snyder’s of Hanover, which it acquired earlier this year to help move into a faster-growing business.
Campbell has been wrestling with declining soup and juice sales in a market crowded with competitors at the same time that many families are seeking foods they consider healthier and less processed. It had been trying to modernize by acquiring brands it said were more in line with changing tastes, such as Bolthouse Farms. But it has now put up that brand for sale as well as manufacturing operations in Indonesia and Malaysia and its business in Hong Kong and Japan.
The company also has faced headwinds due to recent changes in U.S. trade policy that increased costs. Earlier this year, Commerce Secretary Wilbur Ross famously held up a can of Campbell’s soup in a CNBC interview to make the case that the Trump administration’s steel and aluminum tariffs were “no big deal.”
Campbell has said it expects steel and aluminum costs to rise, pushing its overall costs higher.
The company’s planned divestments are the latest shift in the reconfiguration of the U.S. food industry. As major food makers struggle to increase sales, they’ve come under pressure from investors to boost profits through cost cuts, mergers and acquisitions.
Camden, New Jersey-based Campbell said it’s working urgently to complete all the moves by next July. Assuming they are completed on schedule, the company expects fiscal 2019 earnings per share of $2.40 to $2.50 on an adjusted basis, down from $2.87 per share this year.
Fourth-quarter profit plunged 70 percent to $94 million, or 31 cents per share, as surging costs outpaced a revenue boost. Still, the results topped Wall Street expectations. Sales rose 33 percent to $2.22 billion, but fell short of forecasts.
Shares of the company slipped 1.4 percent to $39.42 in Thursday trading. The stock is down nearly 17 percent in the year to date.
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