Campbell Soup (NYSE: CPB) lifted food and consumer staples exchange traded funds after the company announced a plan to raise soup sales this year by moving away from discounts and lower sodium.
Incoming CEO Denise Morrison is betting new strategies and soups can boost investor appetite for the shares, which is held in Rydex S&P Equal Weight Consumer Staples (NYSEArca: RHS) and Global X Food ETF (NYSEArca: EATX).
Although the consumer staples sector has fared well over the past year, Campbell’s soup sales are down 5% over the course of the fiscal year, set to end in July. [Investors Shift into Defensive ETFs.]
The company this week said it will invest more in its baking and snacking segment, which includes Pepperidge Farm.
Although Campbell now has “more realistic financial goals” and a “focused portfolio with well-recognized brands,” Deutsche Bank analysts in a note said they remain cautious on the stock “as valuation is reasonable and a turnaround will likely require years.”
“The leadership team has conducted a comprehensive review of the business, looked at everything with fresh eyes and charted a new direction for the company, which we believe will lead to sustainable growth,” Campbell spokesman Anthony Sanzio said. [Consumer Staples ETFs Weather the Sell-Off.]
Morrison will become CEO of the company on Aug. 1 and wants to refocus the brand. The sales slump seen of late has to do with a reduction in advertising and a bevy of new soup lines, reports Paul Ziobro for The Wall Street Journal.
Tisha Guerrero contributed to this article.
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