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Stock Strategist

Campbell's Growth Set to Simmer

But while we foresee some sales improvement, increasing already-high margins is not likely.

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Consumer products companies have been plagued by intense competitive pressures exacerbated by consumers’ penchant for shopping the perimeter of the store at the expense of center-store categories. Competition has come from not only branded operators but small, niche peers that have proved more agile in responding to the rapid pace of industry change.  Campbell Soup (CPB) has not been immune to these challenges over the past several quarters.

Campbell’s sales and profit performance from the third quarter of fiscal 2016 through the fourth quarter of fiscal 2017 didn’t give investors much to cheer about, with organic sales down at a low-single-digit clip each of the past six quarters and adjusted operating margins averaging in the mid- to high teens.

Erin Lash has a position in the following securities mentioned above: AMZN. Find out about Morningstar’s editorial policies.