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Campbell Soup Company Confirms Mark Clouse as CEO

12/27/2018

Mark Clouse a twenty-year veteran of Pinnacle Foods and Kraft Foods was appointed as the CEO of Campbell Soup Company on December 20th following a six-month search for a replacement for Denise Morrison. Clouse is due to commence duties on January 22nd. The appointment was contingent on an agreement between activist investment group, Third Point LLC and the family-dominated Board of Campbell Soup.

As noted previously, Mark Clouse is a “company man” with experience in generating sales growth for old packaged-food brands including Bird’s Eye and Duncan Hines. Campbell clearly needs a turnaround specialist with a strong entrepreneurial track record. This however would not be consistent with the staid Board of socialite amateurs stuck in a 1960’s time warp.

It is considered significant that Conagra Brands attributed lower earnings and profit to their Pinnacle Foods acquisition that closed one month before the release of results for their 2nd quarter. Although Conagra revenue rose 9.7 percent to $2.38 billion, it missed consensus estimates of $2.41 billion. Conagra did however beat on EPS with $0.67 per share excluding items against a Street estimate of $0.55. Shares dived 17 percent after the release to a 52-week low mainly on a downward adjustment in projected FY2019 earnings from $2.11 to a range of $2.03 to $2.08. In a conference call, Conagra opined that the challenges presented by the Pinnacle Foods acquisition were “largely self-inflicted due to sub-par innovation and executional missteps.”

The success of Mark Clouse at Campbell Soup will depend on whether he in fact has entrepreneurial flair and whether the Board will allow him to exercise innovation which may conflict with company culture. If Clouse continues on the same conservative path or is restricted from innovation, Campbell will continue on a downward spiral and will either be an acquisition or will be dismembered. A sad outcome for a well-established food company that tried to move too quickly into ‘fresh and natural’ incurring immense debt and then in a funk reverting to a stand-fast position based on traditional but dated products.