Campbell’s Soup Company on Friday said U.S. tariffs on steel imports will lead to sharper losses than expected in the second quarter of the year and beyond.
“At this stage, given what we know about accelerating cost inflation in part due to the anticipated impact of import tariffs and the continuing headwind on transportation and logistics cost, we expect our margins will be down in fiscal 2019,” CFO Anthony DiSilvestro said in an earnings call Friday, according to CNBC.
The company said it was expecting a 1-3 percent drop in profits this year, but because of the tariffs, it now expects as much as a 6 percent decline.
Campbell’s posted a $393 million loss in the first quarter. Tariffs of 25 percent were imposed on steel from some companies on March 23, just a week before the end of the quarter.
DiSilvestro didn’t blame the Q1 loss on the tariffs, but Commerce Secretary Wilbur Ross said he doubts the tariffs had much of an effect or will have much of an effect.
“It is physically impossible that a few days of a tariff resulted in a $393 million loss. They are using [the tariffs] as a cover-up for other problems,” Ross said.
Ross famously held up a can of Campbell’s soup in March to explain that there’s only 2.6 cents worth of steel in a can of soup and that the tariffs would increase that to about 3.2 cents.
