The Campbell's Soup Company has announced that the corporation’s full-year operating income has fallen by 67 percent following a “changing year,” which saw a decline in organic sales offset gains made from the Campbell’s recent acquisitions.
The “challenging year” saw Campbell’s operating income fall from $1.4 billion recorded last year to just $469 million. While the company’s net sales increased by 10 percent, thanks to the recent acquisitions of Pacific Foods and Synder’s-Lance made by the business, the increase was offset by poor performances from Campbell’s Snacks and Campbell’s Meals and Beverages divisions in North America.
Due to the poor performance Campbell’s has overhauled its business strategy to focus more on the two failing divisions. The plan will see Campbell’s offload its Campbells Fresh and Campbell International brands which includes Australian snack firm Arnott’s.
“Campbell’s board of directors considered a full slate of strategic options, including optimising the portfolio, divesting businesses, splitting the company, and pursuing a sale. The board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model. Importantly, the board remained open and committed to evaluating all strategic options to enhance value in the future,” said Campbell’s interim president and CEO, Keith McLoughlin.
“We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond. The board and management team are committed to deleveraging the company, retaining our investment grade credit rating and maintaining our dividend. We will pursue further actions in addition to those announced today to optimise our portfolio and performance.”