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Campbell Soup (CPB) Q4 Earnings Meet Estimates, Sales Up Y/Y
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Campbell Soup Company (CPB - Free Report) reported fourth-quarter fiscal 2023 results, wherein the top line increased year over year and came ahead of the Zacks Consensus Estimate. However, the bottom line declined while matching the consensus mark.
Quarterly Highlights
Adjusted earnings tumbled 11% year over year to 50 cents per share due to lower adjusted EBIT and slightly elevated interest expenses. The metric came in line with the Zacks Consensus Estimate.
Net sales of $2,068 million increased 4% year over year and surpassed the Zacks Consensus Estimate of $2,057 million. Organic net sales grew 5% year over year. The upside can be attributed to favorable inflation-induced net price realization, somewhat offset by the soft volume/mix.
The company’s adjusted gross profit rose to $632 million from $622 million reported in the year-ago quarter. The adjusted gross profit margin contracted 70 basis points (bps) to 30.6% due to the adverse volume/mix, ongoing cost inflation and increased other supply-chain costs. These were somewhat offset by favorable net price realization and supply-chain productivity improvements.
Adjusted marketing and selling expenses rose 9% to $194 million due to an increase in advertising and consumer promotion expenses and elevated selling expenses. Adjusted EBIT declined 10% to $242 million.
Campbell Soup Company Price, Consensus and EPS Surprise
Meals & Beverages: Net sales remained flat year over year at $936 million. We expected a segment sales decline of 0.5% to $930.3 million. Organic sales grew 1% as strength in foodservice and Prego pasta sauces was countered by softness in beverages, U.S. soup and Canada. The favorable net price realization was somewhat offset by the adverse volume/mix. Sales of U.S. soup fell by 2%. Operating earnings in the unit declined 18%, primarily due to the reduced gross profit.
Snacks: Net sales in the division rose 8% (up 9% organically) to $1,132 million compared with our estimate of 7% net sales growth to $1,125 million. The upside can be attributed to sales of power brands, which rose 13%.
Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Lance sandwich crackers and salty snacks like Kettle Brand and Cape Cod potato chips. Favorable net price realization contributed to the upside, which was partially offset by volume/mix declines. Segmental operating earnings jumped 12%, driven by the increased gross profit.
Other Financial Details
As of the end of fiscal 2023, Campbell Soup had cash and cash equivalents of about $189 million and $1.85 billion available under its revolving credit facility. CPB generated $1.1 billion in cash flow from operations in fiscal 2023. Capital expenditures amounted to $370 million in the said period.
Management paid $447 million in cash dividends and bought back nearly $142 million worth of shares during fiscal 2023. At the end of the fourth quarter, it had nearly $301 million remaining under its current $500-million share repurchase plan and almost $104 million remaining under its $250 million anti-dilutive share repurchase plan.
Through the fourth quarter of fiscal 2023, the company generated $890 million in savings under its multi-year cost-saving program, including Snyder’s-Lance synergies. Management remains on track to deliver savings worth $1 billion by fiscal 2025-end.
Fiscal 2024 Guidance
Management expects sustained momentum in fiscal 2024 due to its strategic plan. The pending buyout of Sovos Brands is presently anticipated to conclude by the end of December 2023 and is not included in the current fiscal 2024 view.
For fiscal 2024, the company expects net sales growth in the range of a 0.5% decline to an increase of 1.5%. Organic sales growth is likely to range between flat and an increase of 2%.
Adjusted EBIT is forecasted to be up 3-5%. Adjusted EPS is envisioned to be up 3-5% to come in the range of $3.09-$3.15.
Shares of this Zacks Rank #3 (Hold) company have dropped 19.1% in the past six months compared with the industry's decline of 0.5%.
Solid Consumer Staple Bets
Inter Parfums (IPAR - Free Report) , which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank #1 (Strong Buy). IPAR has an expected EPS growth rate of 15% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales indicates 19.7% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Flowers Foods (FLO - Free Report) , a packaged bakery food products company, currently carries a Zacks Rank #2 (Buy). FLO has a trailing four-quarter earnings surprise of 7.6% on average.
The Zacks Consensus Estimate for Flowers Foods’ current fiscal year sales suggests growth of 6.7% from the corresponding year-ago reported figure.
Helen of Troy (HELE - Free Report) , a provider of several consumer products, currently has a Zacks Rank #2. HELE’s expected EPS growth rate for three to five years is 8%.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales suggests a decline of 2.9% from the year-ago reported numbers. HELE has a trailing four-quarter earnings surprise of 8.1%, on average.
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Campbell Soup (CPB) Q4 Earnings Meet Estimates, Sales Up Y/Y
Campbell Soup Company (CPB - Free Report) reported fourth-quarter fiscal 2023 results, wherein the top line increased year over year and came ahead of the Zacks Consensus Estimate. However, the bottom line declined while matching the consensus mark.
Quarterly Highlights
Adjusted earnings tumbled 11% year over year to 50 cents per share due to lower adjusted EBIT and slightly elevated interest expenses. The metric came in line with the Zacks Consensus Estimate.
Net sales of $2,068 million increased 4% year over year and surpassed the Zacks Consensus Estimate of $2,057 million. Organic net sales grew 5% year over year. The upside can be attributed to favorable inflation-induced net price realization, somewhat offset by the soft volume/mix.
The company’s adjusted gross profit rose to $632 million from $622 million reported in the year-ago quarter. The adjusted gross profit margin contracted 70 basis points (bps) to 30.6% due to the adverse volume/mix, ongoing cost inflation and increased other supply-chain costs. These were somewhat offset by favorable net price realization and supply-chain productivity improvements.
Adjusted marketing and selling expenses rose 9% to $194 million due to an increase in advertising and consumer promotion expenses and elevated selling expenses. Adjusted EBIT declined 10% to $242 million.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote
Segmental Analysis
Meals & Beverages: Net sales remained flat year over year at $936 million. We expected a segment sales decline of 0.5% to $930.3 million. Organic sales grew 1% as strength in foodservice and Prego pasta sauces was countered by softness in beverages, U.S. soup and Canada. The favorable net price realization was somewhat offset by the adverse volume/mix. Sales of U.S. soup fell by 2%. Operating earnings in the unit declined 18%, primarily due to the reduced gross profit.
Snacks: Net sales in the division rose 8% (up 9% organically) to $1,132 million compared with our estimate of 7% net sales growth to $1,125 million. The upside can be attributed to sales of power brands, which rose 13%.
Sales growth was fueled by a rise in cookies and crackers, specifically Goldfish crackers, Lance sandwich crackers and salty snacks like Kettle Brand and Cape Cod potato chips. Favorable net price realization contributed to the upside, which was partially offset by volume/mix declines. Segmental operating earnings jumped 12%, driven by the increased gross profit.
Other Financial Details
As of the end of fiscal 2023, Campbell Soup had cash and cash equivalents of about $189 million and $1.85 billion available under its revolving credit facility. CPB generated $1.1 billion in cash flow from operations in fiscal 2023. Capital expenditures amounted to $370 million in the said period.
Management paid $447 million in cash dividends and bought back nearly $142 million worth of shares during fiscal 2023. At the end of the fourth quarter, it had nearly $301 million remaining under its current $500-million share repurchase plan and almost $104 million remaining under its $250 million anti-dilutive share repurchase plan.
Through the fourth quarter of fiscal 2023, the company generated $890 million in savings under its multi-year cost-saving program, including Snyder’s-Lance synergies. Management remains on track to deliver savings worth $1 billion by fiscal 2025-end.
Fiscal 2024 Guidance
Management expects sustained momentum in fiscal 2024 due to its strategic plan. The pending buyout of Sovos Brands is presently anticipated to conclude by the end of December 2023 and is not included in the current fiscal 2024 view.
For fiscal 2024, the company expects net sales growth in the range of a 0.5% decline to an increase of 1.5%. Organic sales growth is likely to range between flat and an increase of 2%.
Adjusted EBIT is forecasted to be up 3-5%. Adjusted EPS is envisioned to be up 3-5% to come in the range of $3.09-$3.15.
Shares of this Zacks Rank #3 (Hold) company have dropped 19.1% in the past six months compared with the industry's decline of 0.5%.
Solid Consumer Staple Bets
Inter Parfums (IPAR - Free Report) , which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank #1 (Strong Buy). IPAR has an expected EPS growth rate of 15% for three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales indicates 19.7% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Flowers Foods (FLO - Free Report) , a packaged bakery food products company, currently carries a Zacks Rank #2 (Buy). FLO has a trailing four-quarter earnings surprise of 7.6% on average.
The Zacks Consensus Estimate for Flowers Foods’ current fiscal year sales suggests growth of 6.7% from the corresponding year-ago reported figure.
Helen of Troy (HELE - Free Report) , a provider of several consumer products, currently has a Zacks Rank #2. HELE’s expected EPS growth rate for three to five years is 8%.
The Zacks Consensus Estimate for Helen of Troy’s current fiscal-year sales suggests a decline of 2.9% from the year-ago reported numbers. HELE has a trailing four-quarter earnings surprise of 8.1%, on average.