Soup is good food. But it might not be a good investment.
Campbell Soup Co. shares plunged Tuesday after the company cautioned that its annual profit will be less than it previously forecast.
The company said its quarterly profit fell 30% amid declining sales of its canned soups and V8 beverages. It also was hit by a recall involving its recently acquired Plum Organics.
Campbell Soup, of Camden, N.J., has been trying to remake itself as supermarket consumers bypass canned goods for fresh produce, meats and dairy. The company introduced soups in brightly colored plastic containers in the hopes of attracting consumers turned off by cans.
Shares of Campbell Soup were down more than 5% in midday trading. The stock is still up more than 12% for the year, about half the amount the broad S&P; 500 index has gained this year.
One of the primary concerns is the company's soup sales, which fell 6% in its recently completed fiscal first quarter.
"Soup sales were soft once again and continue to present some risk to earnings for the year," Christopher Growe, an analyst at Stifel Financial Corp., said in a Tuesday research note. "Sales growth will continue to be challenged in our view by the weak underlying sales trends across the business."
Campbell Soup's first-quarter adjusted profit was 66 cents a share, well below the 86 cents analysts had estimated. Revenue fell nearly 2% to $2.17 billion. Analysts had estimated $2.29 billion.
[Updated at 12:53 p.m. PST, Nov. 19: Campbell Soup spokeswoman Carla Burigatto said several factors unrelated to fresh foods led to the quarter's sales decrease: the later Thanksgiving holiday, weakness in core business trends, frontloaded sales of new products and the Plum Organics recall.]
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