Fitch Ratings lowers outlook on Campbell Soup to negative, citing weakening operating metrics, increased leverage
November 2, 2011
– Citing its weakening operating metrics and increased leverage, Fitch Ratings lowered its outlook on Campbell Soup Co. to negative, Dow Jones Newswires reported Nov. 1.
However, Fitch still gives Campbell's an A rating. The negative outlook reflects a slight increase in Campbell's leverage this fiscal year and expectations of wider leverage in fiscal 2012.
Fitch said that Campbell's declining U.S. soup sales, market share and operating earnings also affected the company's outlook. Also, the company's attempt to revitalize its soup category through promotions didn't deliver expected volume gains, and its U.S. beverage unit posted weaker profitability, Fitch added.
Fitch said that Campbell's plan for its North American soup business may be slow to gain traction in an operating environment characterized by cautious consumer spending and climbing input costs.
The primary source of this article is Dow Jones Newswires, New York, New York, on Nov. 1, 2011.