Campbell Soup’s Top Exec Resigns

Campbell Soup Co. said Dale F. Morrison quit as president and chief executive of the world’s largest soup maker, whose stock has fallen by half since November 1998.

Morrison, 51, was appointed to those positions in June 1997. David W. Johnson, 67, who held the same roles from 1990 to 1997, will be interim chief executive while the company searches for a permanent replacement.

Campbell has struggled to boost sales of its trademark canned soups amid competition from grocers’ brands and as consumers eat more meals outside the home. The company, which also makes Godiva chocolates, V8 juices and Pepperidge Farm cookies, gets more than half of its profit from canned soups.

The Camden, N.J.-based company didn’t ask for Morrison’s resignation, said spokesman Jerry Buckley. Morrison also stepped down as a director.

“David Johnson, when he was CEO, performed magic,” said Goldman, Sachs & Co. analyst Nomi Ghez, who rates the stock “neutral.” “Whether he can do it again, we will see. The environment is more difficult.”

Johnson, brought in by the company’s controlling Dorrance family, slashed costs, sold poorly performing units and used some of the savings to promote soups. Under his tenure, the stock rose fivefold.

Campbell announced Morrison’s departure after the close of regular U.S. trading. Its shares closed down $1.69 at $29.69 on the New York Stock Exchange. The stock has fallen from a recent peak of $58.25 on Nov. 27, 1998, and in February touched a four-year low of $25.81.

In addition to sluggish demand from consumers, sales and earnings were hurt as retailers cut back on orders after the company halted a quarterly discount promotion. The price promotion had boosted Campbell’s sales but reduced profit.

Profit from continuing operations fell 12% to $766 million in the fiscal year ended Aug. 1 as sales dropped 4.1% to $6.42 billion.

“This company has disappointed in earnings in the last year,” Ghez said. “Yesterday I lowered my estimates and stated that I think there could be some meaningful earnings disappointments again next year.”

Seventeen analysts rate Campbell “hold” or “sell,” and only one rates the company’s shares a “buy,” according to Bloomberg Analytics.

“Usually when someone leaves like that, it’s only because things are about to get a lot worse,” said William Leach at Donaldson, Lufkin & Jenrette Inc., who rates the stock “market perform.”

Philip E. Lippincott will continue as chairman. The former chairman and CEO of Scott Paper Co. was named Campbell’s chairman a year ago.