Campbell Soup Co. posted a loss for the second quarter, citing a hefty write-down of the value of the division that included Garden Fresh Gourmet, which it announced a deal to sell on Tuesday.
The quarter’s loss of $59 million compares with a profit of $285 million from the second quarter in 2018, hurt by a $346 million write-down for its fresh food unit.
The company inked an agreement to sell Ferndale’s Garden Fresh Gourmet to Quebec-based Fontaine Sante, rebuffing a bid that involved Jack Aronson, the brand’s founder, along with other investors, Crain’s reported Tuesday.
Garden Fresh Gourmet has operated as part of Campbell since 2015 when Campbell bought it from founder Jack Aronson for $231 million as it sought to expand its fresh foods offerings.
Sales for the Campbell Fresh unit fell 7 percent to $239 million in the second quarter, led by declines in refrigerated soup.
Those figures of reflect certain major private label customers that plan to insource production in 2019, as well as declines in Bolthouse Farms refrigerated beverages and Garden Fresh Gourmet, slightly offset by growth in carrots, according to a Wednesday news release.
The write-down was also powered by Bolthouse Farms and restructuring costs. The Camden, N.J.-based company said it expects to name buyers for Bolthouse Farms and its international business by the end of fiscal 2019, Reuters reported Tuesday,
Net sales jumped 24 percent to $2.71 billion, driven by the recent acquisitions of Charlotte, N.C., snack maker Snyder’s-Lance and Oregon-based Pacific Foods, producer of organic broth and soup.
“Our efforts to stabilize our core business, integrate Snyder’s-Lance, deliver our cost savings agenda and focus and optimize the portfolio are all on track,” CEO Mark Clouse said in a statement. “Over time, these actions will enable us to increase investments in our core businesses while significantly reducing debt and creating meaningful value for shareholders.While we have made steady progress, there is much more work to be done to fully unlock the potential of our business.”
The company’s adjusted earnings before impairments slipped 23 percent to 77 cents per share, but still beat investors’ estimate of 70 cents per share. That decrease was partially led by a higher adjusted and impact from the acquisitions of Snyder’s-Lance and Pacific Foods, the release said.
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