Campbell Soup executives warned Friday that they expect rising production costs from Trump administration tariffs on steel and aluminum.
Shares plummeted on weak quarterly results. The canned-goods producer posted a loss of $393 million for its third quarter and said it expected profit to decline 5% to 6% for the full year.
Campbell CEO Denise Morrison has left the company effective immediately, and Campbell is set to conduct a strategic review of its business.
Chief Financial Officer Anthony DiSilvestro said President Donald Trump’s tariffs on trade with China will weigh on future results. Earlier this year, the administration imposed a 25% levy on steel imports and a 10% tariff on aluminum.
“The issue is primarily one of cost inflation, and we’re seeing and expecting an acceleration on the rate of inflation across a number of ingredient and packaging items,” DiSilvestro said on a call with analysts. “For example, we expect double-digit increases on steel and aluminum. A lot of that is driven or all of it’s driven by the impact of anticipated tariffs.”
Campbell Soup shares fell more than 12% on the weak results and settled at $34.37 at the close of markets on Friday.
Commerce Secretary Wilbur Ross defended the tariffs in a FOX Business interview with Stuart Varney in March, arguing that the levies would have a minimal impact on companies such as Campbell.
“I just bought a can of Campbell Soup today at the 7-Eleven,” Ross said, while holding up the can on camera. “It was $1.99 for the can. There’s about 3 cents worth of tin plate steel in this can. So if it goes up 25%, that’s a tiny fraction of one penny. That’s not a noticeable thing.”
Several U.S. industries pushed back on Ross’s assertion at the time. The Can Manufacturers Institute, a trade association, said a 1 cent tariff would amount to a $1.1 billion tax on consumers, The Associated Press reported.