Shares of Campbell Soup Company (NYSE:CPB) slid on Friday, falling as much as 8.9%. The stock was down 7.1% as of 3:55 p.m. EST.
Campbell's stock was pulled down as Kraft Heinz (NASDAQ:KHC) announced a large writedown on the value of some of its well-known brands, and reported higher-than-expected costs for its fourth quarter. Kraft Heinz's 27% decline as of this writing weighed on the food sector, prompting worries about the industry's prospects.
Not only did Kraft Heinz report earnings per share below what analysts were expecting, but it also announced a $15.4 billion writedown on its Kraft and Oscar Mayer brands. In addition, the company slashed its per-share dividend from $0.625 to $0.40 and issued unimpressive guidance for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization).
Campbell, along with other food stocks like Kellogg and Conagra Brands, also fell several percentage points Friday.
Also potentially impacting Campbell's stock, the company said on Thursday that it signed an agreement to sell a refrigerated soup plant that makes Bolthouse Farms and Garden Fresh Gourmet brands to a private investment company. The sale is part of Campbell's ongoing efforts to review its portfolio of products and divest some assets to increase its focus and reduce debt.
Given the troubles at Kraft Heinz, and Campbell's need to refocus its business, investors may be worried that competitive pressures are leading to higher costs and slower growth for Campbell and other peers.