There could be a sale on soup real soon.
"CEO Jeff Harmening put more emphasis than we expected on his intent to divest 5% of the company's sales as he reshapes the portfolio through M&A to return to growth. Given the lack of details in the presentation about the marketing plans for canned soup and the weak trends in the category, we would not be surprised if management decided to sell its Progresso brand. By our math, selling Progresso would dilute the company's EPS by about $0.20 or 7%."
Progresso is one of the most storied brands in the supermarket, with history dating back to the late 1890s. The brand came into General Mills' possession via the 2000 acquisition of Pillsbury. But with soup sales under pressure, General Mills putting Progresso on the sales block would make sense.
Product portfolio overhauls are all the rage in consumer packaged goods right now. Companies such as J.M. Smucker (SJM) continue to unload legacy brands with sluggish sales to free up cash to invest in new area like snacks. For its part, General Mills sold its frozen and canned vegetables business Green Giant to B&G Foods (BGS) in 2015 for $765 million after years of weakening sales.
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