Campbell Soup Boosts FY23 Outlook As Q2 Results Top Estimates
Campbell Soup Co. (CPB) reported on Wednesday a profit for the second quarter that grew nine percent from last year, driven by 12 percent net sales growth amid favorable net price realization. Adjusted earnings per share and quarterly net sales topped analysts’ estimates. The company also raised its financial guidance for the full-year 2023, reflecting the continued strength of the company’s performance.
In pre-market trading on the NYSE, Campbell Soup shares are up $1.55 or 2.97 percent to $53.68.
“While the top line benefited from favorable net price realization, we also continued to see strong brand health. This demonstrates our powerful connection with consumers, especially as they turn to our products for the value they need to navigate the current economic environment,” said Mark Clouse, Campbell’s President and CEO.
For the second quarter, the company reported net earnings attributable to the company of $232 million or $0.77 per share, higher than $212 million or $0.70 per share in the prior-year quarter.
Excluding special items, adjusted earnings for the quarter was $0.80 per share, compared to $0.69 per share in the year-ago quarter.
On average, 15 analysts polled by Thomson Reuters expect the company to report earnings of $0.74 per share for the quarter. Analysts’ estimates typically exclude special items.
Net sales for the quarter increased 12 percent to $2.49 billion from $2.21 billion in the same quarter last year, driven by favorable net price realization and continued brand strength. Organic net sales increased 13 percent. Analysts expected net sales of $2.44 billion for the quarter.
Meals & Beverages net sales increased 10 percent to $1.41 billion from last year, driven by increases in U.S. retail products, including U.S. soup, Prego pasta sauces and Pace Mexican sauces, as well as gains in foodservice.
Snacks net sales also grew 15 percent to $1.08 billion from last year, driven by increases in cookies and crackers, primarily Goldfish crackers and Pepperidge Farm cookies, and in salty snacks, primarily Snyder’s of Hanover pretzels, Snack Factory pretzel crisps, and Kettle Brand potato chips.
Looking ahead to fiscal 2023, the company now projects adjusted earnings in a range of $2.95 to $3.00 per share on net sales growth of 8.5 to 10.0 percent from last year’s net sales of $8.56 billion, implying sales between $9.29 billion and $9.42 billion, with organic net sales growth of 8.5 to 10.0 percent.
Previously, the company expected adjusted earnings in the range of $2.90 to $3.00 per share on net sales growth of 7.0 to 9.0 percent, with organic net sales growth of 7.0 to 9.0 percent.
The Street is looking for earnings of $3.00 per share on net sales of $9.27 billion for the year.
Campbell said it remains on track to deliver savings of $1 billion under its multi-year cost savings program by the end of fiscal 2025. It achieved $10 million of total savings, inclusive of Snyder’s-Lance integration synergies, in the second quarter, bringing total program-to-date cost savings to $870 million.
As part of the savings program, the company also decided in mid-January to consolidate its Snacks offices in Charlotte, North Carolina, and Norwalk, Connecticut into its headquarters in Camden. It expects to realize cost savings from consolidating the buildings beginning in fiscal year 2024 and reach $10 million in annual cost savings by fiscal year 2026.
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