CAMDEN, N.J. - Campbell Soup Company (NYSE:CPB) outlined its strategy to overhaul its supply chain, with a $230 million investment aimed at enhancing manufacturing capabilities and efficiency. This move includes the closure of its Tualatin, Oregon facility by July 2026 and a reduction in operations at its Jeffersonville, Indiana site, affecting a total of 415 employees.
The Tualatin plant, part of the Pacific Foods acquisition in 2017, will phase out operations starting with an initial impact on 120 of its 330 employees in August 2024. Soup and broth production will be transferred to other thermal and aseptic plants within Campbell's network, while plant-based beverage production will shift to co-manufacturing partners.
In Jeffersonville, Indiana, the company will specialize its plant in Late July tortilla chips production starting July 2024, moving kettle potato chip production to other facilities. This change will impact about 85 of the 230 employees.
To offset these changes, Campbell plans to create approximately 210 new roles across the organization by fiscal 2026, with $80 million already invested in the initiative.
New roles include 100 positions in Maxton, North Carolina for aseptic soup production, 72 in Hanover, Pennsylvania for additional potato chip kettles, and 40 in Franklin, Wisconsin to expand tortilla chip capacity. Moreover, an increase in Goldfish crackers production at the Richmond, Utah plant is expected to add around 80 new jobs.
Chief Supply Chain Officer Dan Poland emphasized the importance of investing to strengthen the supply chain for future growth while acknowledging the difficult impact on employees at the affected sites. The company has pledged to provide separation benefits and job placement support to those impacted.
Campbell, with a portfolio of well-known brands such as Campbell’s, Goldfish, and Pepperidge Farm, generated $9.4 billion in net sales for fiscal 2023. These supply chain investments are part of the company's broader strategy to fuel business growth and improve capital returns. The information is based on a press release statement from Campbell Soup Company.
InvestingPro Insights
The recent strategic initiatives by Campbell Soup Company (NYSE:CPB) to streamline its supply chain and operations are reflected in the company's financial metrics and analyst insights. With a market capitalization of $13.52 billion and a P/E ratio adjusted for the last twelve months as of Q2 2024 at 15.24, Campbell's valuation presents a picture of stability in the eyes of investors.
InvestingPro Tips suggest a cautious outlook from analysts, with three having revised their earnings expectations downwards for the upcoming period. Yet, the company's history of maintaining dividend payments for 54 consecutive years signals a commitment to shareholder returns, a factor that income-focused investors might find reassuring. Analysts also predict profitability for Campbell this year, aligning with the company's profitable performance over the last twelve months.
Key financial metrics such as a gross profit of $2.914 billion and a gross profit margin of 31.43% for the last twelve months as of Q2 2024 underline the company's ability to maintain a strong profitability ratio despite market challenges. Moreover, Campbell's commitment to shareholder value is further exemplified by a dividend yield of 3.26% as of mid-April 2024, which is attractive in the current market environment.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/CPB. These tips can provide further insights into Campbell's financial health and growth prospects. To access these exclusive insights and more, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking the full potential of InvestingPro's financial analysis tools.
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