Campbell Soup (CPB) - Get Report shares are falling premarket Wednesday after the company reported first quarter results that were mixed, while also cutting its sales forecast due to the divestiture of its European chips business earlier this year.
The company reported per-share earnings of 78 cents on revenue of $2.18 billion, which is down 0.9% from the same period last year. Analysts were expecting the company to report earnings of 71 cents a share on revenue of $2.19 billion.
Of more significance was the company’s lowered fiscal 2020 net sales guidance, due to the completed sale of its European chips business. The company lowered its sales growth guidance to between a decline of 1% and an increase of 1% from its previous view of between a 1% gain and 3% gain.
The company did say that the divestiture of Kelsen Group would add $3 billion in expected net proceeds. Additionally, the company expects to close the sale of Arnott’s and certain other Campbell’s international operations in the second quarter of fiscal 2020.
“I was especially pleased that our in-market consumption grew more than 1% in measured channels. Additionally, we grew soup share for the first time in 10 quarters, one of the early signs of progress in our three-year journey to revitalize this business,” said CEO Mark Clouse.
The company’s U.S. soup business decreased 3% in the quarter however, with shipments lagging in-market consumption “by 2 points.”
Campbell Soup shares were down 1.34% to $46.95 in premarket trading.