We’ve been following Campbell’s progress in both dealing with the challenges from their hedge fund stockholders as well as from the leadership’s efforts to stabilize the business.
In the latest quarterly reporting, Campbell sold less of its so-called “namesake” products in the U.S.but continued to grow its snacks division. CEO Mark Clouse explained that retailers put off ordering shipments of Thanksgiving soups until the current quarter because the holiday came later this year than usual (ref. WSJ). Clouse has said, “We had a great deal of work to do to stabilize this business – this will take some time, but we are gaining momentum.” Some would say that it’s about time; others would add that it’s better late than never. The company’s U.S. soup sales fell 3% for its fiscal first quarter but the business gained market share for the first time since 2017 as overall demand for soups declined. Clouse said that the company began advertising its soups earlier for the winter season this year and is spending more to promote those products in stores, which is helping win back more distribution. Overall, Campbell’s revenue slipped 1% to $2.18 billion. Other packaged foods companies have felt the same pressure from consumers’ changing tastes – as well as the effects of not advertising rigorously on a regular basis. Here’s hoping Campbell’s keeps up the promotion momentum – that will definitely make a difference in driving consumer spending. Out of interest, of the 6 largest packaged food companies – Campbell, Kellogg, General Mills, Conagra, Smucker and Kraft Heinz, Campbell’s has the highest price/earnings ratio, of 18.6 times.