Shares in Campbell Soup Co. plunged after the U.S. food producer trimmed its profit guidance for fiscal 2018 and announced that its chief executive was stepping down effective immediately.
Campbell's said its president and CEO, Denise Morrison, retired effective May 18. Board member Keith McLoughlin will serve as interim chief executive. McLoughlin was CEO of appliance manufacturer Electrolux from 2011 to 2016.
The U.S. canned food producer reported net loss attributable to shareholders of $393 million, or $1.31 per share, in its fiscal third quarter that ended April 29, compared to net earnings of $176 million, or 58 cents per share, in the prior-year period.
Campbell's shares were down 11.01% to $34.90 at 10:55 a.m. in New York trading.
On an adjusted basis, however, the company exceeded analysts' expectations as it earned 70 cents per share during the quarter, up from 59 cents a year earlier. The S&P Capital IQ normalized consensus EPS estimate for the third quarter was 60 cents, with 12 analysts reporting.
Campbell's loss before interest and taxes was $475 million in the third fiscal quarter, compared to EBIT of $298 million a year ago. The company said it recorded pre-tax impairment charges of $619 million, or $1.65 per share, related to the Campbell Fresh business segment.
"Based on our third-quarter results and outlook for the balance of the year, we are lowering our fiscal 2018 earnings guidance," said Campbell's CFO Anthony DiSilvestro.
The company now expects to earn between $2.85 and $2.90 per share on an adjusted basis in fiscal 2018, down 5% to 6% from the adjusted EPS of $3.04 in the previous fiscal year.
DiSilvestro said he was not satisfied with the company's latest financial results despite progress the company had made on its priorities. He said Campbell's will review "all aspects of our strategic plans and portfolio composition."
"We anticipate that our review, which will take several months to complete, will lead to changes designed to improve our operating performance and create long-term shareholder value," he said.
The results of the review will be discussed in August when Campbell's reports its fourth-quarter and full-year earnings, DiSilvestro added.
Year over year, third-quarter net sales increased to $2.13 billion from $1.85 billion. Net sales at the Americas simple meals and beverages segment rose to $1.01 billion from $966 million, and global biscuits and snacks net sales increased to $862 million from $639 million. Campbell Fresh net sales went up to $251 million from $248 million.
Full-year net sales are forecast to increase 10% to 11% from the $7.89 billion recorded in fiscal 2017.