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Will Snacks Unit Aid Campbell Soup's (CPB) Q4 Performance?
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Campbell Soup Company (CPB - Free Report) is ready to report fourth-quarter fiscal 2023 earnings on Aug 31. It’s worth taking a closer look at the company’s Snacks segment, which constituted 50.3% of its total sales in the third quarter. We believe that the Snacks division’s prospects are likely to have played a key role in determining the company’s performance.
Snacks Unit in Detail
Campbell Soup has been benefiting from its Snacks business, which has been growing increasingly in the past two years. The third quarter of fiscal 2023 marked the company’s third straight quarter of a double-digit net sales increase in this segment. During the quarter, the Snacks unit’s sales grew 12% (also organically) to $1,121 million due to a 15% rise in net price realization.
The upside can be attributed to sales of the company’s eight power brands, which rose 16% on better pricing. Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Lance sandwich crackers and salty snacks like Kettle Brand potato chips, among others. In-market dollar consumption increased 15% for the Snacks business, again due to power brands.
Segmental operating earnings increased by 41% in the third quarter, driven by an increased gross profit. Management remains encouraged about the profit and margin roadmap of the segment. It expects continued strength in the Snacks unit and remains on track to achieve the long-term operating margin goal for this segment. These aspects give out positive signals for the quarter under review as well.
We expect sales in the Snacks business to come in at $1,125.6 million in the fourth quarter, suggesting year-over-year growth of 7%. We expect fiscal 2023 sales growth of 12.4% to $4,443 million in the Snacks unit.
Campbell Soup Company Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for revenues is pegged at $2.06 billion, suggesting a rise of 3.5% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 50 cents per share, indicating a decline of 10.7% from the year-ago quarter’s reported figure. CPB has a trailing four-quarter earnings surprise of 8.6% on average.
Campbell Soup has an Earnings ESP of -0.60% and a Zacks Rank #3 (Hold). The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is not the case here. 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 correct combination to beat on earnings this time.
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +8.52% and a Zacks Rank #2. The company is likely to register a bottom-line increase when it reports second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 15 cents suggests a sharp increase from 4 cents reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.19 billion, suggesting a marginal decline of 0.9% from the figure reported in the prior-year quarter. American Eagle Outfitters has a trailing four-quarter earnings surprise of 9.2%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +0.99% and a Zacks Rank of 3. COST is likely to witness bottom-line growth from the year-ago fiscal quarter’s reported figure when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings is pegged at $4.72 per share in the past 30 days, suggesting a 12.4% rise from the year-ago fiscal quarter’s reported number.
Costco’s top line is expected to rise from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $78.9 billion, implying a 9.4% rise from the figure reported in the prior-year fiscal quarter. COST delivered an earnings beat of 1.8%, on average, in the trailing four quarters.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +1.48% and carries a Zacks Rank #3. The company is likely to register a bottom-line decline when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a drop of 17.1% from the year-ago quarter’s levels.
Casey's General Stores’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.85 billion, indicating a fall of 13.5% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.
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Will Snacks Unit Aid Campbell Soup's (CPB) Q4 Performance?
Campbell Soup Company (CPB - Free Report) is ready to report fourth-quarter fiscal 2023 earnings on Aug 31. It’s worth taking a closer look at the company’s Snacks segment, which constituted 50.3% of its total sales in the third quarter. We believe that the Snacks division’s prospects are likely to have played a key role in determining the company’s performance.
Snacks Unit in Detail
Campbell Soup has been benefiting from its Snacks business, which has been growing increasingly in the past two years. The third quarter of fiscal 2023 marked the company’s third straight quarter of a double-digit net sales increase in this segment. During the quarter, the Snacks unit’s sales grew 12% (also organically) to $1,121 million due to a 15% rise in net price realization.
The upside can be attributed to sales of the company’s eight power brands, which rose 16% on better pricing. Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Lance sandwich crackers and salty snacks like Kettle Brand potato chips, among others. In-market dollar consumption increased 15% for the Snacks business, again due to power brands.
Segmental operating earnings increased by 41% in the third quarter, driven by an increased gross profit. Management remains encouraged about the profit and margin roadmap of the segment. It expects continued strength in the Snacks unit and remains on track to achieve the long-term operating margin goal for this segment. These aspects give out positive signals for the quarter under review as well.
We expect sales in the Snacks business to come in at $1,125.6 million in the fourth quarter, suggesting year-over-year growth of 7%. We expect fiscal 2023 sales growth of 12.4% to $4,443 million in the Snacks unit.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for revenues is pegged at $2.06 billion, suggesting a rise of 3.5% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 50 cents per share, indicating a decline of 10.7% from the year-ago quarter’s reported figure. CPB has a trailing four-quarter earnings surprise of 8.6% on average.
Campbell Soup has an Earnings ESP of -0.60% and a Zacks Rank #3 (Hold). The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is not the case here. 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 correct combination to beat on earnings this time.
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +8.52% and a Zacks Rank #2. The company is likely to register a bottom-line increase when it reports second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 15 cents suggests a sharp increase from 4 cents reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.19 billion, suggesting a marginal decline of 0.9% from the figure reported in the prior-year quarter. American Eagle Outfitters has a trailing four-quarter earnings surprise of 9.2%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +0.99% and a Zacks Rank of 3. COST is likely to witness bottom-line growth from the year-ago fiscal quarter’s reported figure when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings is pegged at $4.72 per share in the past 30 days, suggesting a 12.4% rise from the year-ago fiscal quarter’s reported number.
Costco’s top line is expected to rise from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $78.9 billion, implying a 9.4% rise from the figure reported in the prior-year fiscal quarter. COST delivered an earnings beat of 1.8%, on average, in the trailing four quarters.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +1.48% and carries a Zacks Rank #3. The company is likely to register a bottom-line decline when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a drop of 17.1% from the year-ago quarter’s levels.
Casey's General Stores’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.85 billion, indicating a fall of 13.5% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.