CAMDEN, N.J. (CN) — The CEO of Campbell Soup announced her retirement Friday as the company announced that it will undertake a strategic review to address poor sales in a climate that is increasingly hostile to processed foods and imported steel.
Kevin McLoughlin, a board member of the company for two years, is taking over immediately for Denise Morrison, who was CEO since 2011.
The shakeup at the 150-year-old company based in Camden, New Jersey, coincided Friday with an announcement by Chief Financial Officer Anthony DiSilvestro that Campbell must lower its fiscal 2018 earnings guidance because of unexpectedly low gross margins.
Campbell’s completed its acquisition of the snack brand Snyder’s Lance this quarter but DiSilvestro blamed “both execution-related and external challenges” for the company’s lackluster performance, even as organic sales were stable in what the CFO referred to as a “difficult environment.”
In addition to growing market demand for healthier food options, Campbell’s has been grappling with tariffs on imported steel and aluminum that the Trump administration imposed in March.
“We expect double-digit increases on steel and aluminum,” DiSilvestro said, as quoted by the Associated Press.
The prediction is a jarring contradiction to an attempt by the Trump administration to normalize its steel and aluminum tariffs. Earlier this year, Commerce Secretary Wilbur Ross famously held up a can of Campbell’s soup in a CNBC interview to make the point.
DiSilvestro meanwhile also told investors that the company anticipates a surge in wheat and vegetable prices, driven up by inflation.
Though Campbell’s shares plunged more than 10 percent in early trading Friday, so did those of other leading beverage companies PepsiCo Inc., Coca-Cola Co. and Molson Coors Brewing, which like Campbell’s are reliant on metal.
Even a tariff of one penny would lead to a $1.1 billion tax on consumers and businesses in a country with 119 billion U.S.-made cans, according to a statement from the Can Manufacturers Institute, which represents 22,000 manufacturers workers across the country.
Campbell’s noted that its incoming CEO McLoughlin is the former chief executive at appliance maker Electrolux.
Posting a net loss this quarter of $393 million, Campbell’s said it expects 2018 earnings to decline between 5 percent and 6 percent. Initially it had projected a decline ranging between 1 percent and 3 percent.
The company plans to discuss the outcome of their financial plans in late August.