We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Campbell Soup Company (CPB - Free Report) reported stellar second-quarter fiscal 2023 results, with the top and the bottom line surpassing the Zacks Consensus Estimate and increasing year over year. The company’s top line gained from favorable net price realization and brand strength.
Management is increasing its fiscal 2023 net sales outlook and pulling up the midpoint of adjusted earnings before interest and taxes (EBIT) and adjusted earnings per share (EPS) outlook. The company’s higher revenue expectations reflect strength in brands, favorable price elasticities and continued supply chain execution.
Campbell Soup Company Price, Consensus and EPS Surprise
Adjusted earnings increased 16% year over year to 80 cents per share, mainly driven by higher adjusted EBIT. These were somewhat offset by increased adjusted effective tax rates. The metric surpassed the Zacks Consensus Estimate of 73 cents and our estimate of 71 cents per share.
Net sales of $2,485 million increased 12% year over year and surpassed the Zacks Consensus Estimate of $2,438.5 million and our estimate of $2,387.9 million. Organic net sales grew 13% year over year. The upside can be attributed to favorable inflation-induced net price realization somewhat offset by soft volume/mix.
The company’s adjusted gross profit rose to $763 million from $671 million reported in the year-ago quarter. Adjusted gross profit margin expanded 30 basis points (bps) to 30.7% on favorable net price realization and supply chain productivity improvements. These were somewhat offset by ongoing cost inflation and increased other supply chain costs along with unfavorable volume/mix.
Adjusted EBIT grew 14% to reach $362 million mainly fueled by increased adjusted gross profit. These were somewhat offset by increased marketing and selling expenses, adjusted other cost and adjusted administrative expenses.
Segmental Analysis
Meals & Beverages: Net sales increased 10% year over year to $1,408 million. Organic sales rose 11%, mainly due to a rise in U.S. retail products that include U.S. soup, Pace Mexican sauces and Prego pasta sauces and benefits from foodservice. Favorable net price realization was somewhat offset by modest volume/mix decline. Sales of U.S. soup increased 7% led by a sales rise in ready-to-serve soups and condensed soups. Operating earnings in the unit jumped 17%.
Snacks: Net sales in the division rose 15% (also organically) to $1,077 million. The upside can be attributed to sales of power brands which rose 20%. Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Pepperidge Farm cookies and in salty snacks, Snyder's of Hanover pretzels among others. Favorable net price realization and volume/mix increases contributed to the upside. Segmental operating earnings increased 24%.
Other Financial Details
As of Jan 29, 2023, Campbell's total cash and cash equivalents stood at $158 million, long-term debt was $3,992 million, and total equity amounted to $3,601 million. CPB generated $732 million as cash flow from operations for six months ended Jan 29, 2023. Capital expenditure amounted to $155 million in the said period.
Management paid $226 million of cash dividends and bought back nearly $66 million during the first half of fiscal 2023. At the end of the second quarter, it had nearly $375 million remaining under its current $500-million share repurchase plan and almost $106 million remaining under its $250 million anti-dilutive share repurchase plan.
In the quarter, the company generated $10 million in savings under its multi-year cost-saving program, including Snyder’s-Lance synergies, bringing total program-to-date cost savings to $870 million. Management remains on track to deliver savings worth $1 billion by fiscal 2025-end.
Image Source: Zacks Investment Research
Fiscal 2023 Guidance
For fiscal 2023, the company now expects 8.5-10% net sales and organic sales growth. Earlier, management had expected 7-9% net sales and organic sales growth for fiscal 2023. Adjusted EBIT is now forecast to be up 4.5-6.5% compared with the previous view of 2.5-6.5% growth. Adjusted EPS is now envisioned to be up 3.5-5% to come in at $2.95-$3.00. Earlier, adjusted EPS was projected to be up 2-5%
Shares of the Zacks Rank #3 (Hold) company have gained 8.8% in the past six months compared with the industry's growth of 0.1%.
Post Holdings, which is a consumer-packaged goods company, sports a Zacks Rank #1 (Strong Buy) at present. Post Holdings has a trailing four-quarter earnings surprise of 34.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for POST’s current financial year’s sales and earnings suggest growth of 1.6% and 111.3%, respectively, from the year-ago reported numbers.
Lamb Weston, which is a frozen potato product company, currently carries a Zacks Rank #2 (Buy). LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests an increase of 19.3% and 89.9%, respectively, from the year-ago reported number.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2. MDLZ has a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial year sales and earnings suggests growth of 9% and 7.5%, respectively, from the corresponding year-ago reported figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Campbell (CPB) Beats on Q2 Earnings & Sales, Raises FY23 View
Campbell Soup Company (CPB - Free Report) reported stellar second-quarter fiscal 2023 results, with the top and the bottom line surpassing the Zacks Consensus Estimate and increasing year over year. The company’s top line gained from favorable net price realization and brand strength.
Management is increasing its fiscal 2023 net sales outlook and pulling up the midpoint of adjusted earnings before interest and taxes (EBIT) and adjusted earnings per share (EPS) outlook. The company’s higher revenue expectations reflect strength in brands, favorable price elasticities and continued supply chain execution.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote
Quarterly Highlights
Adjusted earnings increased 16% year over year to 80 cents per share, mainly driven by higher adjusted EBIT. These were somewhat offset by increased adjusted effective tax rates. The metric surpassed the Zacks Consensus Estimate of 73 cents and our estimate of 71 cents per share.
Net sales of $2,485 million increased 12% year over year and surpassed the Zacks Consensus Estimate of $2,438.5 million and our estimate of $2,387.9 million. Organic net sales grew 13% year over year. The upside can be attributed to favorable inflation-induced net price realization somewhat offset by soft volume/mix.
The company’s adjusted gross profit rose to $763 million from $671 million reported in the year-ago quarter. Adjusted gross profit margin expanded 30 basis points (bps) to 30.7% on favorable net price realization and supply chain productivity improvements. These were somewhat offset by ongoing cost inflation and increased other supply chain costs along with unfavorable volume/mix.
Adjusted EBIT grew 14% to reach $362 million mainly fueled by increased adjusted gross profit. These were somewhat offset by increased marketing and selling expenses, adjusted other cost and adjusted administrative expenses.
Segmental Analysis
Meals & Beverages: Net sales increased 10% year over year to $1,408 million. Organic sales rose 11%, mainly due to a rise in U.S. retail products that include U.S. soup, Pace Mexican sauces and Prego pasta sauces and benefits from foodservice. Favorable net price realization was somewhat offset by modest volume/mix decline. Sales of U.S. soup increased 7% led by a sales rise in ready-to-serve soups and condensed soups. Operating earnings in the unit jumped 17%.
Snacks: Net sales in the division rose 15% (also organically) to $1,077 million. The upside can be attributed to sales of power brands which rose 20%. Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Pepperidge Farm cookies and in salty snacks, Snyder's of Hanover pretzels among others. Favorable net price realization and volume/mix increases contributed to the upside. Segmental operating earnings increased 24%.
Other Financial Details
As of Jan 29, 2023, Campbell's total cash and cash equivalents stood at $158 million, long-term debt was $3,992 million, and total equity amounted to $3,601 million. CPB generated $732 million as cash flow from operations for six months ended Jan 29, 2023. Capital expenditure amounted to $155 million in the said period.
Management paid $226 million of cash dividends and bought back nearly $66 million during the first half of fiscal 2023. At the end of the second quarter, it had nearly $375 million remaining under its current $500-million share repurchase plan and almost $106 million remaining under its $250 million anti-dilutive share repurchase plan.
In the quarter, the company generated $10 million in savings under its multi-year cost-saving program, including Snyder’s-Lance synergies, bringing total program-to-date cost savings to $870 million. Management remains on track to deliver savings worth $1 billion by fiscal 2025-end.
Image Source: Zacks Investment Research
Fiscal 2023 Guidance
For fiscal 2023, the company now expects 8.5-10% net sales and organic sales growth. Earlier, management had expected 7-9% net sales and organic sales growth for fiscal 2023. Adjusted EBIT is now forecast to be up 4.5-6.5% compared with the previous view of 2.5-6.5% growth. Adjusted EPS is now envisioned to be up 3.5-5% to come in at $2.95-$3.00. Earlier, adjusted EPS was projected to be up 2-5%
Shares of the Zacks Rank #3 (Hold) company have gained 8.8% in the past six months compared with the industry's growth of 0.1%.
Some Top-Ranked Food Bets
Some top-ranked stocks are Post Holding (POST - Free Report) , Lamb Weston (LW - Free Report) and Mondelez International, Inc. (MDLZ - Free Report) .
Post Holdings, which is a consumer-packaged goods company, sports a Zacks Rank #1 (Strong Buy) at present. Post Holdings has a trailing four-quarter earnings surprise of 34.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for POST’s current financial year’s sales and earnings suggest growth of 1.6% and 111.3%, respectively, from the year-ago reported numbers.
Lamb Weston, which is a frozen potato product company, currently carries a Zacks Rank #2 (Buy). LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests an increase of 19.3% and 89.9%, respectively, from the year-ago reported number.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2. MDLZ has a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial year sales and earnings suggests growth of 9% and 7.5%, respectively, from the corresponding year-ago reported figures.