The resignation Friday of Denise Morrison as CEO of Campbell Soup Co. came hand-in-hand with an earnings report illustrative of the food company’s recent struggles.
Company CFO Anthony DiSilvestro noted its performance has been impacted “by both execution-related and external challenges,” and Campbell now finds itself in the market for a new chief executive to right the ship.
If Morrison had been contemplating exiting Campbell for some time, Friday’s earnings report may have sealed the deal. The company reported a third-quarter loss of $393 million, as compared to a $176 million profit for the same period a year ago.
Further, the Camden-based company lowered its earnings projections for the remainder of its fiscal year, projecting a 5 percent to 6 percent decline instead of its original 1 percent to 3 percent forecast.
Campbell’s stock price was down about 12 percent midday Friday, trading at just above $34 a share after being at $60 a share a year ago.
“Campbell’s has been struggling,” said Brian Todd, president of Upper Saddle River-based Food Institute LLC and a 35-year veteran of food industry analysis.
Despite Campbell’s venturing outside the soup realm with its acquisitions of vertically integrated farm company Bolthouse Farms, organic food maker Pacific Foods and snack food giant Snyder’s-Lance, “Soup was still kind of their core business, and the convenience of soups have been supplanted by other convenience items,” Todd said. “Frozen refrigerated soups or even supermarkets offering hot soups have chipped away at the main segment of their market.”
The downward trend in soup consumption, he added, has been apparent for the past decade.
“Being able to pivot to something, whether it’s changing your product or changing your process — trying to make it more appealing to consumers in some ways is important,” Todd said. “The Campbell’s brand is still very highly respected out there, and seeing what other ways that could be used could increase their results.”
As Campbell tapped two-year board member and former Electrolux AB chief executive Keith McLoughlin to be its interim CEO, DiSilvestro said the company plans to take a fresh look at its portfolio.
“They indicated intention to shed some of the businesses which kind of indicates that they’re looking to restructure the company in some way,” Todd said.
“I’m sure they’re looking at what they’ll do with business that are underperforming,” he continued. “They still do have strong brands out there — Pepperidge Farms, Goldfish, the snack brands. They have some opportunities there as well.”
Morrison’s departure now leaves 23 women running Fortune 500 companies.