Dive Brief:
- Campbell Soup Company reported a 4% decline in sales and 1% decrease in organic sales in its Q3 earnings report. However, its profit beat expectations. The company adjusted its sales change rate outlook for the fiscal year to the lower tail of the -1% to +1% range.
- Certain categories fell harder than others, including U.S. soup at 10% as well as U.S. simple meals and international simple meals and beverages, both at 6%.
- However, the company was able to widen its growth margin from 34.3% to 35.9%.
Dive Insight:
Campbell is going through a cost-cutting initiatve with a goal of saving $200 million annually over three years, which means everything from excess management cuts to a "zero-based budgeting" strategy.
The cuts come amid falling sales for processed foods in the center of the store as consumers move toward healthier foods with fewer chemicals and those along the grocery store's perimeter.