This is not a common phrase. It's a sarcastic metaphor meant to insult someone. Alphabet soup is, like it says, a soup consisting of letters of the alphabet. Shitting is, quite literally in this case, pooping. A smarter statement is, again like it says, something smarter than what you previously said. This statement clearly comes from a conversation involving 2 people. Person A must have said something that person B thought was stupid. As a result, person B is insulting person A in a....creative manner, to say the least. Hope that helps!