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How CPB Stock Reacted to Campbell Soup’s Fiscal 1Q18 Results

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CPB stock falls

Campbell Soup (CPB) stock fell ~6.3% in the two trading sessions following the release of the company’s weaker-than-expected fiscal 1Q18 results on November 21. Campbell Soup missed analysts’ top- and bottom-line estimates. A continued decline in US (SPY) soup sales, sluggish performance by V8 beverages, and adverse weather conditions took a toll on the company’s sales. An adverse mix, increased input, transportation and logistics costs, innovation investments, and higher IT (information technology) costs impacted its margins.

Following the sluggish first-quarter results, the company lowered its fiscal 2018 profit guidance. Lower volumes, an unfavorable mix, input cost inflation, and higher supply-chain expenses are expected to hurt the company’s bottom line. However, cost and productivity savings and improved sales in the Global Biscuits and Snacks segment are projected to strengthen its financials.

Performance this year

Campbell Soup has mostly disappointed investors this year, with its stock having fallen ~22.7% as of November 22, 2017. The company has lagged behind most of its peers in terms of price performance. During the same period, General Mills (GIS), J.M. Smucker (SJM), Kellogg (K), and Kraft Heinz (KHC) stock fell 13.1%, 12.0%, 12.2%, and 8.6%, respectively. Lower US (SPY) demand for packaged foods and a tough retail environment impacted these companies’ stock prices. The S&P 500 (SPX) has risen 16.0% this year.

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