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Factors to Note as Campbell Soup (CPB) Readies for Q2 Earnings

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Campbell Soup Company (CPB - Free Report) is likely to register a top-and-bottom-line increase from the respective year-ago fiscal quarter’s reading when it reports second-quarter fiscal 2023 earnings on Mar 8. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,438 million, suggesting a rise of 10.4% from the prior-year fiscal quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has dipped by a penny in the past seven days to 73 cents per share. However, the figure indicates growth of 5.8% from the figure reported in the prior-year fiscal quarter. This food and beverage product company has a trailing four-quarter earnings surprise of 8.7%, on average. CPB delivered an earnings surprise of 18.6% in the last reported quarter.

We expect second-quarter net revenues to be up 8.1% year over year to $2,387.9 million and the bottom line to grow 2.5% to 71 cents a share.

Campbell Soup Company Price, Consensus and EPS Surprise

Campbell Soup Company Price, Consensus and EPS Surprise

Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote

Factors to Consider

Campbell Soup has been benefiting from its growing Snacks business. This business has been tapping incremental sales, backed by strength in power snacks brands and higher innovation. The segment formed 43.5% of the company’s top line in the first quarter of fiscal 2023, with sales of power brands up 21%. Inflation-driven pricing and sales allowances were drivers. The continuation of these upsides bodes well for the quarter under review.

Campbell Soup has been struggling with cost inflation for a while.  On its last earnings call, management highlighted that it expects to keep witnessing cost inflation throughout fiscal 2023. That said, the company has been undertaking pricing actions, among other efforts, to mitigate the impact of inflation.

Campbell Soup has also been progressing well with its cost-savings plan. Management is on track to deliver savings worth $1 billion by the fiscal 2025-end. These factors, along with Campbell Soup’s prudent investment and strategic efforts toward product innovation and brand building, bode well for the quarter under review.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Campbell Soup this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Campbell Soup has a Zacks Rank #3 and an Earnings ESP of -0.51%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three companies worth considering as our model shows that these have the right combination of elements to beat earnings this time.

Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +8.25% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.67 suggests a decrease of 2.3% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey's top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $3.37 billion, indicating an increase of 10.6% from the figure reported in the year-ago quarter. CASY has a trailing four-quarter earnings surprise of 7.2%, on average.

Foot Locker (FL - Free Report) currently has an Earnings ESP of +3.03% and a Zacks Rank of 3. The company is likely to register top and bottom-line declines when it reports fourth-quarter fiscal 2022 results. The consensus mark for FL’s quarterly revenues is pegged at $2.2 billion, which suggests a decline of 8.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Foot Locker’s earnings has been unchanged at 51 cents per share in the past 30 days. The consensus estimate indicates a 69.5% decline from the year-ago quarter’s reported figure.

Five Below (FIVE - Free Report) currently has an Earnings ESP of +0.52% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of $3.06 suggests an increase of 22.9% from the year-ago quarter.

Five Below’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.11 billion, which suggests a rise of 10.9% from the figure reported in the prior-year quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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