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Campbell Soup (CPB) to Post Q1 Earnings: What's in the Offing?

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Campbell Soup Company (CPB - Free Report) is scheduled to release first-quarter fiscal 2021 numbers on Dec 9. The company’s top and bottom lines will likely display year-over-year growth. The Zacks Consensus Estimate for revenues is pegged at $2,317 million, indicating a rise of 6.1% from the prior-year quarter.

While the Zacks Consensus Estimate for earnings has remained unchanged over the past 30 days at 91 cents per share, it suggests growth of 16.7% from the figure reported in the prior-year period. Notably, Campbell Soup delivered a surprise of 5% in the last reported quarter. Also, this convenience foods player has a trailing four-quarter earnings surprise of 9.5%, on average.

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

Key Factors to Note

Campbell Soup has been gaining on higher demand stemming from the increased at-home consumption amid the coronavirus pandemic. This helped the company witness an increase in total company household penetration in the fourth quarter of fiscal 2020, wherein sales climbed across both Meals & Beverages as well as Snacks segments. Remarkably, the company’s solid marketing investments behind both these segments bode well, though it might have escalated the cost burden to an extent.

Apart from this, the company has been struggling with cost inflation. During the fiscal fourth quarter, its gross margin was partly impacted by cost inflation and other supply-chain expenses (including costs associated with COVID-19). Nevertheless, Campbell Soup has been focused on its cost savings plan, which generated a total program-to-date savings of $725 million as of the end of the fourth quarter.

On its last earnings call, management said that it anticipates favorable demand and supply-chain conditions in first-quarter fiscal 2021. Accordingly, it expects net sales in the first quarter to increase in the band of 5-7%. Adjusted EBIT is estimated to rise 6-9%. Further, the company projects adjusted EPS in the range of 88-92 cents per share, which indicates growth of 13-18% from the 78 cents reported in the year-ago quarter.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Campbell Soup this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Campbell Soup currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Chewy, Inc. (CHWY - Free Report) has an Earnings ESP of +4.85% and currently, carries a Zacks Rank of 2.

McCormick & Company (MKC - Free Report) has an Earnings ESP of +1.11% and holds a Zacks Rank #3, at present.

Constellation Brands (STZ - Free Report) has an Earnings ESP of +2.64% and carries a Zacks Rank #3, currently.

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