Campbell Soup Reports 2% Decrease in Q1 Sales, Yet Optimistic for Future Growth
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Campbell Soup Reports 2% Decrease in Q1 Sales, Yet Optimistic for Future Growth

Campbell Soup Company reported a slight decrease in Q1 fiscal 2024 net sales and earnings, but surpassed expectations with its adjusted EPS.
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Key Highlights

  • Net Sales: Campbell Soup Company (NYSE:CPB) reported a 2% decrease in net sales to $2.5 billion, with a 1% drop on an organic basis.
  • Earnings Before Interest and Taxes (EBIT): EBIT was recorded at $358 million, down 18% from the previous year, with adjusted EBIT at $407 million, marking a 9% decrease.
  • Earnings Per Share (EPS): The company’s EPS stood at $0.78, a 21% decrease, while the adjusted EPS was $0.91, down 11%.

The Campbell Soup Company, a renowned name in the food industry, disclosed its first-quarter results for the fiscal year 2024, ending October 29, 2023. The company observed a slight downturn in its net sales, which amounted to $2.5 billion, representing a 2% decrease from the previous year. This reduction was also reflected in the organic sales, which dipped by 1%.

Despite this downturn, the company’s two-year compound annual growth rate (CAGR) painted a more favorable picture, with net sales climbing approximately 6% and organic net sales increasing by roughly 7%. This growth can be attributed to effective net price realization and the brand’s strength​​.

Looking at the company’s profitability metrics, the Earnings Before Interest and Taxes (EBIT) were reported at $358 million, a decrease of 18% from the previous year’s $436 million. The adjusted EBIT followed a similar trend, showing a 9% reduction from $449 million to $407 million. The company’s Earnings Per Share (EPS) also reflected a downward trend, with a reported EPS of $0.78, down by 21% from the previous year’s $0.99, and an adjusted EPS of $0.91, indicating an 11% decrease from $1.02​​.

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Campbell Reaffirms Guidance for the Full Fiscal Year

Campbell’s President and CEO, Mark Clouse, commented on the first-quarter results, stating that they aligned with the company’s expectations. He highlighted the challenge of navigating the current consumer landscape, especially considering the high growth rates (15%) experienced in the previous year. Clouse expressed optimism about the start of the holiday season, expecting momentum to build in the remaining fiscal year. The company plans to rely on disciplined execution, increased innovation, and the sustained relevance of its brands in the current market environment. Clouse also reaffirmed the company’s guidance for the full fiscal year and expressed excitement about the upcoming acquisition of Sovos Brands, expected to close in the calendar year 2024​​.

Adjusted EPS Beats Expectations

When compared with the expected figures for the quarter – an EPS of $0.88 and revenue of $2.52 billion – Campbell’s performance slightly lagged in terms of revenue but surpassed expectations in its adjusted EPS. This indicates a resilient operational strategy, especially in managing costs and maintaining profitability amidst a challenging sales environment.

The company’s ability to maintain a steady growth rate over a two-year period, despite the current year’s decrease, shows its long-term brand strength and market positioning. The anticipated acquisition of Sovos Brands also hints at strategic expansion, potentially bolstering Campbell’s market presence and product portfolio in the coming years.