Campbell Soup Co , the world's largest soup maker, cut its full-year sales forecast as the competition in the cheap-and-easy meals category shows no sign of cooling.
Shares of Campbell, which also makes Prego pasta sauces and V8 vegetable juices, fell as much as 7 percent in early trading.
Campbell has introduced new soup flavors and increased the frequency of offers to retailers and consumers to try and fend off competition from not only private-label brands and smaller rivals, but also from companies offering any easy-to-make meal.
"So, consumers have the option - rather than buying soup they might go out and get frozen pizza or mac and cheese," Morningstar analyst Erin Lash said.
Campbell's U.S. soup were flat in the third quarter ended April 27 compared with the same quarter last year when sales rose 14 percent.
Condensed soup sales fell 3 percent and ready-to-serve soups sales fell 1 percent in the latest quarter.
Total sales rose 0.4 percent to $1.97 billion, but fell short of the average analyst estimate of $2.0 billion, according to Thomson Reuters I/B/E/S.
The company blamed the weak soup sales and a fall in sales of its Pepperidge Farm bakery products in the quarter for the cut in its sales forecast for the fiscal year ending July.
Campbell expects sales from continuing operations to increase about 3 percent compared with its previous forecast of a 4-5 percent rise.
The company also warned that full-year adjusted earnings would be at the low end of its forecast of $2.53-$2.58 per share.
Analysts on average expect a profit of $2.53 per share, .
Net income attributable to Campbell rose 1.7 percent to $184 million, or 58 cents per share, in the third quarter.
Excluding items, the company earned 62 cents per share, beating the average analysts' estimate of 59 cents per share.
Campbell's shares were down 2.4 percent at $44.02 in late morning trading. They fell to a low of $41.94 earlier on the New York Stock Exchange.
Before Monday's losses, the stock had risen about 4 percent so far this year.
(Additional reporting by Maria Ajit Thomas in Bangalore; Editing by Savio D'Souza)