What happened

Shares of Campbell Soup Company (NYSE:CPB) fell on Thursday following a disappointing fiscal fourth-quarter report. Campbell Soup missed analyst expectations for both revenue and earnings, producing a revenue decline driven by shifting demographics, changing consumer preferences, new shopping behaviors, and a difficult retail environment. As of 11:52 a.m. EDT, the stock was down 6.6%.

So what

Campbell Soup reported fourth-quarter revenue of $1.66 billion, down 1.4% year over year and $30 million below the average analyst estimate. Organic sales were flat adjusted for currency in both the global biscuits and snacks segment and the Campbell fresh segment, while sales slumped 3% year over year in the Americas simple meals and beverages segment.

The Campbell's logo on a screen, with all of the company's products laid out on a countertop.

Image source: Campbell Soup.

Non-GAAP EPS came in at $0.52, up from $0.46 in the prior-year period but $0.03 lower than analysts expected. Adjusted gross margin rose 80 basis points year over year, driven by productivity improvements and cost-saving initiatives. The global biscuits and snacks segment grew operating income by 35%, more than offsetting weak growth in the Americas simple meals and beverages segment and a steep decline in the Campbell fresh segment.

Campbell Soup CEO Denise Morrison discussed the company's progress cutting costs, as well as its acquisition of Pacific Foods:

In fiscal 2017, we have made progress in several key areas, including increasing our successful multi-year cost savings initiative to $450 million by the end of fiscal 2020. The pending acquisition of Pacific Foods will add a purpose-driven, real food brand with a solid track record of growth to our portfolio. Additionally, our new Campbell Fresh leadership team has taken steps to enhance our quality processes and address capacity constraints toward our objective of returning the division to growth.

Now what

Campbell Soup expects fiscal 2018 sales to slump 2% at worst and be flat at best. Earnings before interest and taxes are expected to change by -1% to 1%, and adjusted EPS is expected between $3.04 and $3.11, up 0% to 2% year over year.

Going forward, Campbell Soup is hoping that its acquisition of Pacific Foods will strengthen its presence in the market for healthy and organic foods. The company's own brands are struggling to grow, and that stagnation led investors to push down the stock.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.