US food giant Campbell Soup Co. has announced its president and chief executive officer Denise Morrison has chosen to retire, effective from today (18 May).
The news came as Campbell announced a third-quarter loss, before interest and taxes, of US$475m – compared to a $298m profit for the equivalent period last year.
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CFO Anthony DiSilvestro said Campbell would be “reviewing all aspects of our strategic plans and portfolio composition”.
The EBIT loss included impairment charges of $619m related to Campbell’s fresh foods division, which has been under pressure in recent quarters.
Campbell booked a third-quarter net loss of $393m, versus a profit of $176m a year earlier.
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The company said it has been affected by “both execution-related and external challenges” and on the back of the results it has lowered its fiscal 2018 guidance.
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By GlobalDataDiSilvestro said: “While our organic sales in the quarter were stable in this difficult environment, our gross margin performance was below our expectations. Based on our third-quarter results and outlook for the balance of the year, we are lowering our fiscal 2018 earnings guidance.
“In the third quarter, we made some progress against our key priorities. We completed the Snyder’s-Lance acquisition, substantially expanding our portfolio in the faster-growing snacking categories and we made some progress in stabilising sales in US soup. However, we are not satisfied with our financial results. Our performance has been impacted by both execution-related and external challenges.
“We are addressing these challenges with renewed urgency. Looking ahead, we will be reviewing all aspects of our strategic plans and portfolio composition. We anticipate that our review, which will take several months to complete, will lead to changes designed to improve our operating performance and create long-term shareholder value. We plan to discuss the outcome of this review when we report fourth-quarter and full-year results in late August.”
Morrison, who is also a director, is to be replaced as CEO, on an interim basis, by Keith McLoughlin, a Campbell board member since 2016.
He will remain a board member while chief operating officer Luca Mignini focuses on the integration of two newly-acquired assets – Snyder’s-Lance and Pacific Foods – as well as “stabilising the company’s US soup business”.
Commenting on Morrison’s departure, Les Vinney, chairman of the board, said: “Denise has been a passionate advocate and leader over her 15 years with the company. She has made many important contributions over the past seven years as chief executive officer to reposition Campbell in the rapidly changing food industry.
“Denise has been able to significantly transform Campbell’s portfolio into the faster-growing snacking category with the acquisition of Snyder’s-Lance and increased the company’s focus on health and well-being with brands like Pacific Foods. Her actions have helped to enhance the long-term growth potential of Campbell.
“We are fortunate to have on our board a talented and experienced business leader in Keith who is prepared to step into the CEO position on an interim basis. Keith is deeply familiar with our strategy, our team and our brands, and we are confident in his ability to lead the company during this transitional period.”
Morrison said: “I am proud of Campbell’s accomplishments and how we have transformed our portfolio amid changing consumer tastes for food and health and well-being. It has been an honour to lead this iconic company and exceptional team, and I am confident that Campbell will enjoy continued success for many years to come.”
McLoughlin said: “Having been a director and observing the company over an extended period of time, I know where Campbell has been and where it’s headed, and am excited to lead the company as we continue to work to increase value for all our stakeholders.”
McLoughlin was president and chief executive officer of Electrolux, a global manufacturer of major household appliances, from 2011 until February 2016.
Column: Proactive Denise Morrison exits with Campbell still in the soup
